Friday, December 19, 2008
Pengrowth Energy Trust has just annouced that distributions will be reduced by 25% to $0.17 per month, starting in Januray 2009.
The distribution cut is hardly surprising, but I am somewhat surprised that the cut is so mild. After all, the price of a barrel of oil has fallen from over $140 last July to about $40 right now.
Digging a little more explains this fact, though. Pengrowth uses forward price swaps and option contracts on about 50% of their oil production for 2009 (at $86) and 2010 (at $93). The trust also does this for natural gas, although to a lesser extent.
I own a very small position of Pengrowth in my DRiP portfolio (it is one of my newest positions). A nice feature of the reinvestment plan is that both the reinvested dividends and the additional purchases get a 5% discount. So not only do I get to add money without have to pay a commission, I get a discount on purchases. I plan on slowly increasing my position in the company in 2009, a few $100 at a time.
Wednesday, December 10, 2008
Although this may look like an insignificant increase, it's still means that I'm getting a raise of 6% (since I reinvest those dividends). Who can say with confidence that they'll get that much of a raise at work this year, without having to do any more work, or even asking for it?
Wednesday, December 3, 2008
Isn't that nice? I'm getting paid more, without having to do anything. Even better, that increased dividend will continue buying even more shares of the company. That's the magic of dividend reinvestment and dividend growth.
Monday, December 1, 2008
Assets ($135 692, up 0.3% from $135 276)
- Bank Accounts $3 632 (up 10% from $3 291)
- Emergency Funds $3 354 (up 0.4% from $3 340)
- RRSP Accounts $32 889 (up 1.1% from $32 527)
- Non-Registered Investments $9 668 (slightly up from $9 660)
- Home $86 100 (stable)
Liabilities ($65 932, up 2.4% from $64 391)
- Credit Cards $3 992 (up 73% from $2 306)
- Mortgage $55 350 (down 0.2% from $55 469)
- Heat Pump Loan $6 545 (down 0.7% from $6 597)
- Line of Credit $0 (stable)
As planned, my credit card debt has risen due to some important car repairs. These were financed under a no-interest, 12-month payment plan. There was a slight delay for the replacement of our windows, so they haven't been billed on our line of credit yet. Due to that delay, we were able to negociate an arrangement under which they will be paid in two installments -- one in December and the other next May. So the replacement of those windows will have a lower impact on my monthly situation. By the time the second installment is to be paid, the first one will be long gone from our line of credit. We may even be able to pay for the second one without using the line of credit.