debt debs

Personal Debt Wrangler – Had my money head in the sand – but no more!

Preferred Shares – Time to Spend Some Money




I have $21,029.46 in cash in my retirement investment portfolio just sitting there. I don’t earn any interest on it either. At prevailing interest rates it would be small, but maybe $17/month. The bad news is that it’s been sitting there for over a year, I think.

My broker has been waiting for some good opportunities to buy something. Surely there has been something to buy within this time frame? I have bugged him about it but then I get busy and do nothing to follow-up. Sometimes he emails me with some options and then I sit on the email thinking I need to study it more and then I ultimately do nothing. You can start lashing me with a wet noodle now.  I know I deserve it.

Last time I emailed him was May 29 and he gave me some options preferred shares, exchange traded fund yada yada yada yawn.  I did nothing.  Why does this stuff not interest me and why do I do nothing?

It’s seems like unless I have all my hands and feet on the topic, I feign interest.  I’ve been talking about moving to a self-managed portfolio and I mean that, but it also means a lot of work to get educated and start tracking before I make the leap.


This is the first step in the direction.

preferred-shares-trainI know it will take time, but with your encouragement, I’m hoping it will not take as much time as I am fearing.  Baby steps… get some momentum and let the train gather speed as it pulls away from the station.

It’s really no different than debt repayment, but in the opposite direction.  It’s my money!  It’s my money as opposed to someone else’s which is how I see my debt.

Preferred Shares for Sale

OK, let’s start.  So he (without my prompting I might add), emailed me this week and suggested to buy two preferred shares as follows:

  1. Enbridge Preferred shares series D (ENB.D).  It is currently trading at $24.64 and a current dividend yield of 4.06%.  In 2018, Enbridge will decide to either wind up the preferred shares and pay back $25 to the shareholders, or extend the preferred and give 2.37% above what a 5 year Gov’t of Canada Bond is paying at that time.  He says the yield and quality are good and the fact that it trades daily on the TSX means it can be sold easily, when I want to.
  2. Brookfield Asset Management Series B preferred shares, (BAM.FB), is also a rate reset preferred, trading at $25.09, a current dividend yield of 4.19%, a reset date of March 31, 2019, and a reset spread of 263 bps over the five year Government of Canada bond yield.  It is rated Pfd 2Low.

Looking at my portfolio now I see I already have ENBRIDGE common stock and Brookfield Renewable Energy.


I know you can’t see my whole portfolio in the picture above so you can’t see how I’m diversified.

I can’t figure out the markets still going gang busters with everything going on in the world.

But in the interest of not sitting on my hands, yet again, I told him to go ahead.

Any comments on these two stocks?  Are your investments in index funds or do you have more individual dividend paying stocks in your portfolio?  Do you have any recommendations on excel files for tracking your investments?

Part of Friday Jet Fuel #3


Author: debster

I am a fifty-something wife, mother and new grandmother, who admits to having their “head in the sand” about their financial situation until amassing $247,500 worth of consumer debt for a total debt of $393,500. We've paid $121K in 2 years with four more years to go. Join my journey at sharing ideas and motivation to all those coping with poor money management and bad debt decisions.

52 thoughts on “Preferred Shares – Time to Spend Some Money

  1. I don’t know anything about the particular investments you mentioned so I honestly don’t know what you should do with them. But to comment on your situation as a whole, if you don’t find investing interesting then why don’t you just pick a boring investment. By that I mean, find an index fund that has very cheap fees and tracks a very broad market. That way you can almost literally set it and forget it.

    This article changed how I invest a large chunk of my money. I literally just put a big chunk there and I ignore it for the most part, occasionally I login to see how it’s doing but that’s about it:

    Maybe something like that should be your first baby step. Get it rolling so you keep up with inflation at the least.
    Zee @ Work To Not Work recently posted…Give Yourself a Bonus!My Profile

    • Thank you for the link, Zee, and thanks for visiting. I will be considering all these options as when I move my portfolio to self-managed. Maybe I will find that I like doing it, once I get into it. I dunno, but like everything I tackle, the hardest part is getting started. I really appreciate your input, because I need to keep my eyes wide open about how I’m going to go about doing this.

  2. I am just sticking to index ETFs. IVW, IVV, etc. Not too exciting, but diversified.
    No Nonsense Landlord recently posted…The Top Eight House Hunting Mistakes and How to Avoid ThemMy Profile

    • I know ETF but now IVW and IVV acronymns. :eek: See how much I have to learn! Thanks for weighing in, Eric!

  3. I don’t invest in individual stocks, but rather focus on ETFs because that way I don’t have to spend so much time on everything. Those are two interesting options. I’d love to see how it goes for you.
    Daisy @ Add Vodka recently posted…Chronic Scatterbrain – Signs, Symptoms, and RemediesMy Profile

    • Yes, this is what I need to determine, how much time it will take and whether it is worth it. It’s possible that an index fund may be a better option for me, but I won’t know until I try it and I’m trying to not rule anything out yet, so I make the most informed decision.

  4. The market keeps setting record new highs. You have missed a lot of growth in the past year or so by sitting on the sidelines. Put your money in an index fund that mirrors the market, say an S&P 500index fund. At least while you are thinking about what you should be doing. Get that money to work!
    Brad @ How to Save Money recently posted…Becoming a DIY Handyman to Save MoneyMy Profile

    • I know you are right, Brad. Every time I brought it up, my broker would say he wanted some cash available so he could buy some stocks when they were on sale. Who knows? Having some cash for this type of thing is a strategy I have read about in the past, but to have it sitting there for a year, come on!

  5. This is why I invest in index funds! Buying individual stocks stresses me out.

  6. I agree that there would have been something your broker could have bought in that time frame. I am a fan of the dollar-cost average and basically just spending the same amount every month on stocks. When the market is high you get less stock, when it’s low you get more.

    Those are pretty decent dividend yield in those 2 stocks. I have part of my IRA in strong dividend stocks. Also, is great for dividend advice. He has his entire portfolio there and last time I checked, he is positive on every single stock. They are all dividend stocks.
    Kalen @ MoneyMiniBlog recently posted…24 Things That Are More Likely to Happen Than Winning the LotteryMy Profile

    • Hi Kalen – yes I’ve been reading about the dollar-cost averaging. Those returns I have are pretty good but what you can’t see is the timeframe involved. It’s about 2.5 years. Most I had since Jan 2012, but not all. This is what I feel I should be getting more info on from my broker but I don’t really get. I think if I asked I would get it, probably, though. In any case, I can’t complain about how well my portfolio has been doing, but I’ve paid a lot of fees so I think I would be better off going it alone. Thanks for your input and tips. I really appreciate it!

  7. I would just go the boring way and get index funds. It’s more exciting to buy individual stocks, but also more risky. I don’t know enough about any particular company and that’s why I stick with mutual funds. Instant diversification, although rather boring.
    Aldo @ MDN recently posted…10 Common Money MistakesMy Profile

    • It is more risky but potential for more reward as well. I think that is why my broker is going this route. They say with institutional dividend paying stocks you can’t go too far wrong, and that’s what I’ve got. When I manage it myself I may do a blend of individual stocks and funds. TBD ;-)

  8. I don’t know much about investing (yet) but it’s great that you’re looking at what to do with your money now and taking action to increase your wealth. How exciting! Good luck with whatever option you decide.
    Hayley @ Disease Called Debt recently posted…Day to Day Living With A Debt Management PlanMy Profile

  9. Hurray for taking the steps to look for undervalued shares. Most of my portfolio contains individual dividend paying stocks. By choosing unique investments instead of buying boring index funds we can learn much more about how to think and invest for ourselves ;)

    Offering preferred shares is a great way for companies to raise money without going into debt. Enbridge has a whole bunch of different types of preferred shares to help finance its major projects. I’m not particularly familiar with its D class prefs but it appears to be a relatively safe investment with better returns than most corporate bonds. Personally I’d like to see Enbridge not call ENB.D in 2018 and continue paying the dividends. Other Enbridge preferreds are also publicly traded. ENB.A for example has a 5.49% yield. I’m not sure what the difference is between all of them but maybe you can ask your broker about that. Ceteris paribus I would naturally invest in the shares that pay me a higher dividend :)

    I’m not sure about BAM.FB because I haven’t researched that company before. But Pfd 2-Low probably means that Brookfield’s bonds are still investment grade. I don’t think it would hurt to invest in that one either :D Maybe go overweight with ENB.D and a little less of BAM.FB.
    Liquid recently posted…New Purchases – TMC and AIMy Profile

    • Thank you for the great advice! I’m feeling inspired already. I’m planning to track and shadow my current portfolio for a bit before I decide to move it in kind to my own account which is still to be determined where I will hold it – Questrade or one of the big banks.

  10. My first comment on the individual companies is that even though you own them already, by buying the preferred, you are actually getting “better” exposure to the company because preferreds are higher up in the quality food chain than just common stock. That being said, as long as your told holdings in the two companies individually didn’t exceed 5% of your portfolio, I would be fine with owning them. Like most people have commented, though, I would much rather get broad diversification through an ETF or mutual fund. I am not a big fan of individual stock investments.
    Shannon @ Financially Blonde recently posted…I am a Money Saving ProMy Profile

    • Thanks for the tip, Shannon. As part of my portfolio review this is what I will be looking at but I’m pretty sure I’m okay in this regards.

      I just checked my account and he went ahead and made the purchases as follows:
      ENB.PR.D 400 24.620 $ 9,848
      BAM.PF.B 400 25.080 $10,032

  11. I’m still not quite in the investing game myself, but my parents were facing an issue with their advisor not really taking action, too. They kept emailing him month after month with no response, and because they had moved, it’s not like they could meet with him. That’s why I’m mostly a fan of managing your own portfolio (within reason; you should have a good understanding of it!). So while I have no advice, I’m glad you decided to move on something to make your money work for you, and I hope you can find interest in the topic at some point. Like others have said, my plan is to invest in index funds so I don’t have to bother with them frequently.
    E.M. recently posted…My Frugal Makeup RoutineMy Profile

    • I think index funds are definitely better when you are younger, and maybe even when you are older too. The only reason I think my broker may be not doing them is because he’s trying to do better than the market but I could be wrong. I think the Brookfield ones are mutual funds not index funds but I really don’t know and need to find out. I will have a sit down with him in the fall, but first I want to get better educated so I can ask some of these questions. Thanks for sharing your thoughts on this process which can be kind of scary.

  12. I put most of my savings into Lending Club. I let people with bad credit borrow money at 20+% and even after some default on their loans, I still end up at about 9%.
    Edwin @ Cash Syndrome recently posted…17 Ways To Boost Your Home’s Curb AppealMy Profile

    • Thanks for your comment, Edwin. I’m not sure if I would be comfortable using the Lending Club or if we even have a Canadian equivalent. I have such an aversion to Pay Day loans places, because I hate to see people who are have financially difficulties utilizing these services.

  13. I made a tool in Google Drive that can help track investments, but I really would love to make one in Excel that automatically pulls in data and whatnot. Maybe one day ;) I’m surprised you sat on the cash that long. I personally would have stuck it in a total market index fund until I decided on where I want to move it (if at all!).
    DC @ Young Adult Money recently posted…Is it Accurate to say the Stock Market Returns 10% on Average?My Profile

    • I should have done that, DC. It’s kind of weird dealing with a broker. They’ll do what you tell them to, but sometimes you don’t know what to tell them. Especially when they say the want to keep some cash on hand to buy some ‘sales’. You’re sort of waiting for them to give you guidance, but when you get it it’s sort of wishy-washy. My broker is kind of laid back and I don’t like that. It’s no excuse except to say that I feel like a fish out of water sometimes, which is why I want to build up the expertise to look after it myself. I’m going to check out your documents on google drive. Thank you very much!

  14. Well, I am the least sophisticated investor in the history of the world, but I feel fairly solid on understanding human nature, and I think you should fire your broker even if you’re not ready to manage your portfolio yourself. The dude’s been jerking you around. I’d put everything in index funds and let it hang out there while you think about it more. Better than sitting in limbo, right?
    Cecilia@thesingledollar recently posted…The most minor retirement fund milestone everMy Profile

  15. For preferred shares I would go with a basket of them laddered. IShares have some good offerings for Canada and US as I would lean more towards their ETFs over single issues. Preferred shares are great for an income producing portfolio for any retiree. I like your moves so far!
    Asset Grinder recently posted…New Buys , Sells , Brewery and Real Estate UpdatesMy Profile

    • I think that is why he is moving me into PS a bit, instead of more common stock. I’ll keep reading your posts, AG, and one day I’ll be in the same league where we can banter about our ‘recent buys’ till the cows come home! ha ha ;-)

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  17. If you really don’t feel like following up on your investments your best bet is to go with a well-constructed index fund/ETF portfolio. Just put in cash every month or two months and you’ll be all set. At least, that’s what I would do if I wasn’t having too much fun learning about stocks like I am now.

    Just make sure you feel comfortable with what you’re doing!
    No More Waffles recently posted…My ETF Strategy and PortfolioMy Profile

    • I do put money every month (to the tune of $12K per year) into a spousal RRSP which is in some sort of mutual fund in a plan with a company that is chosen by my employer. (employer matches $0.50 for every $1 I contribute up to $6000) The stuff I have in my own portfolio is investments of RRSPs and LIRA from previous employment at other companies + investments when my employer was was working with a different retirement plan provider. It used to be all in mutual funds and whatever, but once I reached a certain level of investments I was considered ‘big’ enough to warrant being managed in this way with individual stock purchases. We have over 500K in the portfolio managed by the stockbroker between my husband and I combined.

  18. Hey Deb,

    I am with others like Zee that if you are not into the investing part, then maybe an index fund is for you. But if you do desire to get into individual stocks there are loads of blogs related to dividend stocks which are very resourceful. I think preferred stocks move along with the bond market interest rate wise, so if interest rates are rising you could get hit on the value (because they are sort of like a hybrid bond/stock, a set value to them and an interest rate, so if the interest rates rise, to get the same yield the capital must be worth less money). That doesn’t affect you if you are not planning on selling, but if you are looking for a place to park it is something worth considering.
    Kipp recently posted…Liebster Nomination x2My Profile

    • Thanks, Kipp. I did not know that about preferred shares. See I’m learning all the time!

  19. I own a combination of Vanguard index funds, a Vanguard ETF, and a few individual stocks. Index funds are the perfect investment for a beginner. It’s hard to argue with their performance and super low fees!
    Addison @ Cashville Skyline recently posted…Room To GrowMy Profile

    • Everyone sings the praises of Vanguard. I need to understand if there is such a thing as over-saturation in a particular fund. I have no idea, but it’s something that crossed my mind because everyone seems to be into it. Thanks for weighing in, Addison.

  20. I manage my own portfolio of index funds and the return has been excellent. That simple strategy works just fine for me.
    Stefanie @ The Broke and Beautiful Life recently posted…5 Reasons EVERYONE Should Take An Acting ClassMy Profile

  21. I will second the praises of Vanguard as we have most of our US investments held in index funds with them, I use Questrade for my Canadian RRSP and its solely ETF’s from Vanguard.
    It’s good that you’ve decided to start taking more control over your own money and understand how you can make it work for you. With time and knowledge, you will be comfortable enough to manage your own portfolio!
    Kassandra recently posted…Montreal: Je Me SouviensMy Profile

  22. For retirement, we only do mutual funds and ETFs and do not consider individual stocks in that account. We do , however, also have a dividend stocks portfolio as a secondary investment strategy (not necessarily for retirement). We exclusively buy dividend paying stocks (preferably dividend growers) in that account. Coincidentally, we do hold Enbridge Inc in our dividend stocks portfolio. :)

    Just a comment…have you considered more exposure to international stocks. We recently spoke to our financial advisor and he feels the best growth potential in the next few years is in international stocks and preferably in the Growth and Income spectrum.

    Best wishes! AFFJ
    A Frugal Family’s Journey recently posted…Stocks Added to Blog Collection (Update) – Mid-Month (July 2014)My Profile

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  24. I’ve gone the self-managed route. Since I don’t have too much time to spend on my investments, I go mainly with ETFs.
    Tre recently posted…Taxes As A FreelancerMy Profile

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  26. Oh gosh, good luck, Debs! Stocks and funds are a good bit overwhelming to me too.

    I have my retirement running on autopilot with a target date fund, which I LOVE since I don’t have to know a whole lot about it and it rebalances itself. I’ve also been trying to buy individual stocks to add to that too. I bought my first one last summer, Hillenbrand and, knock on wood, it’s been doing what I thought it would.
    Mel @ brokeGIRLrich recently posted…202 of the Best Birthday FreebiesMy Profile

    • I’m more motivated now to do some of my monitoring, but I need to set up a process I can sustain. Good luck on your investments, Mel. I think it is a good strategy when you are younger to choose those funds, but it doesn’t hurt to have a bit of stocks on the side as well, as long as you do your homework.

  27. Whenever I can’t find a stock that I want to invest in at the moment, I keep the money in my cash reserves, or just put it in an index fund. If you’re the kind of person that doesn’t want to spend hours dissecting a company (and honestly who does?) I think a low cost index fund would be the way to go. I wish I could be more help on the stocks, but I honestly know nothing about them. Good luck :)
    Ryan @ Impersonal Finance recently posted…do the math: cableMy Profile

    • I probably should have pushed for that, Ryan. I hope to develop more of an desire to do the analysis! We’ll see how that goes! ;-)

  28. Debs,

    I don’t know much about the preferred issues you’re speaking of here, but I do agree with many of the other comments in that you should have put that money to work a long time ago. Money can work harder than you ever could, so why get in the way of that? :)

    Only you can know your risk tolerance, interest in investing, and available time to follow a portfolio. So only you will really know whether it’s better to own individual stocks or an index fund. It sounds like you’re already familiar with individual stocks based on your portfolio, so if that’s serving you well then I say stick with that. But if it keeps you up at night a low-cost index fund or three is probably best.

    Glad to see you’re putting some money to work, though. Keep it up! Averaging in over time will surely catch both the ups and downs. Just gotta stick with it.

    Best wishes!
    Dividend Mantra recently posted…Three Stocks On My Watch List For August 2014My Profile

    • Thanks, Jason. I will be happy when I’m more comfortable in tracking the stocks and it will seem like old hat!

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