Sold Kraft

I just sold the shares of Kraft (NYSE: KFT) that I purchased in January. A couple of reasons for the sale:

• Kraft announced its next dividend payment, and still no sign of an increase.
• Integration of Cadbury still likely to pose problems. The way things are being handled are raising questions, with bad sentiment about a plant in the U.K. that executives promised would stay open and which is being closed.

But the most important one is this: With the current situation in the world markets, I think there may be better opportunities coming. So I'll need some cash available to take advantage of any unreasonably low prices that are likely to present themselves. And I feel that Kraft is my holding that was least likely to grow in the next couple of months.

I should make a small profit with this sale. I'll know tomorrow when the exact exchange rate for the sale is known.

H&R REIT Announces Distribution Increases

The well-known real estate income trust, H&R REIT (Toronto: HR.UN), today announced as part of its 1st-quarter results that it will start increasing back its distributions. From the current $0.06 per month, distributions will slowly increase each quarter until it hits $0.0875 per month in the second quarter of 2012.

This is great news. The distributions were cut in half (from $0.12 per month to $0.06) in January 2009 when financing for The Bow (a big office tower in Calgary) became difficult during the financial crisis. But although that string of increases shows that situation is improving, it does not (yet) brings the distributions back to the pre-crisis level. But it is a nice reward for those who had faith in the future.

I own about 100 units of the trust in my DRiP portfolio. This year's increases will add about $7.50 to my dividend income.

The Importance of Staying Invested

When I looked at the financial news this morning, my first thought was: "Good thing I stayed invested in the markets."

After all, last week's deterioration of the Greece situation had hit the markets hard -- which probably drove many investors to cash out, thinking that a second bear market was coming. These investors will have lost out on this morning's jump/recovery, and are probably kicking themselves.

If I've learned one thing about investing in the last couple of years, it's that the behaviour of the markets is unpredictable. To paraphrase a famous value investor (Benjamin Graham): "Mr Market is somewhat neurotic. His moods can fluctuate anywhere between incredible optimism and overwhelming depression." And he can swing from one end to the other very quickly.

So what can one do to avoid missing out on a big boost like today's? One has to stay invested. Have a plan, and follow it.

Sell in May and Go Away?

There's a popular saying within investor circles: "Sell in May and Go Away." It is meant to reflect the belief that the stock markets doesn't perform well during the summer months, as a lot of traders are away on vacation.

Personally, I do not subscribe to this saying. Statistics have proven that associating a specific period of the year with over- or under-performance is inconclusive at best. Some years it works, other years ait doesn't. A good example is last summer -- someone who went away during the summer 2009 missed out on the 10% run on the S&P 500 over the month of August.

But with the current troubles in Europe regarding Greece (and other countries on shaky financial grounds), one has to wonder. Are we due for a big correction? Will the worldwide financial markets be destablized again? Should we move to a more defensive position?

I obviously don't have answers to these question. All I can do is have a solid plan, and be ready to take advantage of any irrational weakness. Long-term wins thinking the race over short-term emotions.

Telus Increases Dividend

One of my DRiP holdings, Telus Corp (Toronto: T and T.A), has announced yesterday that the company was increasing its quarterly dividend to $0.50 (up 5.3% from the previous $0.475).

This is a surprise, as the company had failed to increase its dividend in November. But a nice surprise it is. This brings the yield on non-voting shares (T.A) to 5.5%, which is quite high. There is still a lot of uncertainty in the telecom sector, as the impact of new entrants in the market is a big unknown.

I'm not the only one to have been pleasantly surprised by the move -- the shares have jumped 4% on the news this morning.