Words From The Wilds

I have written articles which some may find quite helpful. Other readers have found some of these useful and I thought I would post a few of the more popular links here in case some of my Opera readers are also interested.

Fix that plugged drain in minutes
Improve your dart game
Lawn mower repair (electrical)
Minor Poulan chain saw repair
Make an inexpensive bird-feeder

You may also want to have a look at some of the other writing I have at Triond.

From an investing point of view, much has happened in the last several months, although I am sticking with a few income trusts to weather the recent storms we have had in the investing community. Sentry Select Diversified Income Trust may be moving to a dividend-paying open-ended fund structure and, although there is concern from unit-holders, this is a change that I will ride out, having received many decent distributions in the last few years. The distribution rate has been reduced in the last few months but still manages C$0.026/unit which would be 11+% annual yield at recent market prices. Canwel Building Materials Income Fund has very recently reduced it's distribution as well, coming in at about 23% yield/year at today's prices. Looking at Rogers Sugar Income Fund, distribution rates are holding for now and yield about 13%/year at present market prices. Difficult times require difficult decisions and I trust that the manager's of these funds and trusts that I have been following have taken a logical and sensible approach to their responsibilities.

At today's market prices, the average yield for the income trusts/funds that I have listed previously in this blog is about 17% before taxes.

Well, now for something a little different. My wife and a friend took the Smart Car out to a nearby forestry area today where there is much wildlife to see and photograph. Their original intent was to do a fair bit of walking but while they were strolling, they were surprised by a small black bear cub about 50 yards away. As they didn't see the mother around, they quickly turned and headed back to the car. When they returned home just a few minutes ago, I questioned why they didn't capture the bear with the camera. That would have made a pretty good photo. I am glad, though, that they opted for a safe retreat rather than spend more time in the area. Other than that, they did take some pretty nice photos of flowers they saw on the walk. It is a beautiful Ontario day with a blue, blue sky and nary a blackfly nor mosquito in sight (a true rarity for lately), with fresh, clear air and lots of sunshine.

Here it is 2008 February 29, and the market has confused many of us for several months. The continuing worries about recession in the U.S. and the effects on the global economy have investors either sitting on the hands, wringing their hands, or out of the market. Personally, my inclination to sit in the sidelines and watch rather than take the temptation and buy up the bargains. Many investors (Canadian especially) have seen their investments dwindle over the last couple of years as various tax changes have hit deep into the value of their holdings. Combine this with the present financial woes of the U.S. and the cost of an expensive, continuing war overseas, and the myriad of other global effects (not the least of which is global warming and the resulting changes to an individual's financial life), and it is difficult to recoup losses taken in the past few years.

Here is the update on the income stocks I have been following showing how much their market value has changed from 2006-June-13 to 2008-Jan-15:

Cominar Real Estate Income Trust (-2%)
Canwel Building Materials Income Fund (+26%)
Rogers Sugar Income Trust (+24%)
Sentry Select Diversified Income Trust (-26%)
Boston Pizza Royalty Income Trust (-25%)
Yellow Pages Income Trust (-22%)
Penn West Energy Trust (-36%)
Badger Income Fund (+17%)

These are still good income producers and some represent great bargains at present market costs. For more information, please refer to http://www.nextbigwhoop.com/income_production.htm

Well, there are some good deals still out there in trust world. Actually, with the low market prices for some of these, the yield is quite good. The market for these investments still appears a little confused, possibly until the next election. Still, the distributions are decent for most and great for some (still). Canwel, for example, still yields about 18% income before taxes, based on recent prices.

Here is an update for price performance (not including income received) since first mention here several months ago for those trusts that I am following (the market prices are as of 2007-03-16 and the changes are since my first mention):

Cominar Real Estate Income Trust (+31%)
Canwel Building Materials Income Fund (+5%)
Rogers Sugar Income Trust (-3%)
Sentry Select Diversified Income Trust (-15%)
Boston Pizza Royalty Income Trust (-16%)
Yellow Pages Income Trust (-12%)
Penn West Energy Trust (-26%)
Badger Income Fund (-9%)

For more detailed information on these, see http://www.nextbigwhoop.com/income_production.htm

Well, it has been quite a fall. Due to lack of information about changes to the Canadian income tax that most trusts will pay after 2011, it truly has been difficult knowing what to think about this investment vehicle.
I still have great faith that the trusts I am following will survive in one form or another, and will continue to benefit the unit-holding investor, if not as well as before, then still much better than other forms of (more) conservative investments. The businesses that underly most of the trusts mentioned here have been successfully and progressively operating for several years. I see no reason why these companies cannot adjust for the changes and reduce distributions to investors to offset the changes. This will create a lower-yield investment that will still be very healthy.
Here is an update to show how the value (not including income) of investments that I am following is tracking since I first mentioned them here several months ago:

Cominar Real Estate Income Trust (+16%)
Canwel Building Materials Income Fund (-1%)
Badger Income Fund (-8%)
Rogers Sugar Income Trust (-8%)
Sentry Select Diversified Income Trust (-9%)
Boston Pizza Royalty Income Trust (-15%)
Yellow Pages Income Trust (-14%)
Penn West Energy Trust (-16%)

Most of these show a 10 to 15% loss (result of Canadian income tax changes). However, all of these trusts have continued to pay good distributions during this period, and show every indication of continuing to do so for the near future. I have stopped following Tahera Diamond and IPSCO in this blog. For a different view, check Next Big Whoop.