I shouldn’t have waited…

As many readers might recall, Brian and I split our retirement savings between our RRSPs and our Tax Free Savings Account.  In my TFSA, I hold exclusively dividend paying stocks which I hope will one day be the basis of my early retirement income.  Right now, I have BMO, SLF, RSI and REI.UN in my portfolio.

For a while, I had been holding strong at 81 shares of BMO, which got me a quarterly dividend of $59.94.  Back when BMO’s shares were trading in the $50s, that was perfect for a slow DRIP.  But, their share price has been steadily increasing and regularly hitting new 52-week highs.  I needed to buy more shares in order to DRIP again, but for the last few months, I didn’t quite have the cash on hand because I was buying up other stocks that were cheaper.

bmo

Unexpectedly, I had the opportunity recently to finally get my BMO shares into a position to DRIP again.  Huzzah!

But like any good personal financial blogger plagued with the foibles of human emotion, I wanted to get the best price possible.  Even though the money was in my Questrade account and I could pull the trigger at any time, I wanted to get deal, damn it.  So every day, I would watch the prices.

$68 a share?  Surely it would go down tomorrow, it’s just Monday excitement.

$69?  It HAS to go down.  That’s a 52 week high.  It can’t stay at the price.  Right? … Right?

Well, by the time I finally got over myself and hit the “BUY” button, the price had climbed to $71.95.

So in the end, I still ended up buying a healthy number of BMO shares, but I could have saved a couple bucks if I hadn’t hedged and waited.

Point is – when things have an element of uncertainty, waiting won’t necessarily make it better.  When I decided to make a career change, I didn’t wait for the “perfect time”, I just figured out the fundamentals (tuition, program, etc) and then did it.  When I left my ex, I didn’t wait until I had a place and gobs of cash, I just did it because he was a jack ass.  So when I had enough money to buy BMO, I should have just done it.  There was no guarantee that the price would go down and looking at a lot of the recent movement, it was likely that it could go up.  Lesson learned!

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14 Comments

  1. Liquid says:

    Good lesson to learn :) It’s also the reason why I don’t like to short stocks. Based on how evaluations work the natural tendency for profitable stocks is to always go up over time. At least you got the number of shares you wanted. You can now benefit from the discount DRIPs :D Usually I wait like you did if the technicals for a stock are poor. But if the 10 day sma is trending above the 20 day sma then I would most likely buy right away :)

  2. When I recently sold my company stock, well, 10 shares of it, I was sure that it would keep going up but I wanted to pay down some debt so I withdrew anyway. Sure enough analysts didn’t like our quarterly report and the stock dropped 5-7% in one day. Was I smart to sell? I don’t think so, I just got lucky. Stocks are so unpredictable. We didn’t have bad earnings, analysts just always seem to find something they don’t like about them haha.

  3. Jordann says:

    This is a good reminder! I’m a big “wait and see” kinda girl, but all of my best accomplishments have come out of me NOT waiting.

  4. Great lesson! I’m like you, wanting to get the best deal, but sometimes if you are a long term investor, it’s best to bite the bullet, especially so you can get the dividends on time.

  5. Steve says:

    As much as I know and understand that market timing is a fool’s games (for almost everyone but a rare few), I get tripped up and start watching and trying to time rather than sticking with my investment philosophy and strategy.

    Hehe human folly!

  6. I know the feeling earlier this year I was looking at 3d printing stocks after they missed earning it was $31 a share. I wanted to buy at 28, instead it zoomed to $42 which I purchased at. Today it’s $58 bucks but I should’ve bought at 31.

  7. Oh the timing of the market!!!
    I’m curious as to why you choose to hold dividend stocks in your TFSA when the taxes are more likely to be higher for capital gains? Do you only plan to buy and hold for capital gains?

  8. CF says:

    I only have a small portfolio right now, so I keep that handful inside my TFSA. Once I have a bit more cash, I would diversify and open an unregistered account to maximize tax benefits. But right now, I only have a few Canadian stocks, so there are no taxes.

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