Monday, February 6, 2012

One Year in a TFSA

Jan 19, 2011: Contribute $5,000 to TFSA account.

Jan 21, 2011: Buy 245 shares of iShares DEX Long Term Bond ETF, XLB, at $20.06.  Rationale: lots of negative headlines, it's the end of the world, yields are going to fall.

May 26, 2011: Sold 245 shares of XLB at $20.70, 5.0% total return.  Rationale:  yields have dropped 26bps (measured by Bank of Canada V39056), they probably won't go up, but probably can't go any lower.  Outcome: very very very wrong.  Yields dropped another 99bps to the end of the year with XLB posting a 15.6% total return.

June 2011: Bought 250 shares of iShares DEX HYBrid Bond ETF, XHB, at average price of $20.37.  Rationale: if yields are not going down anymore, perhaps this will put pressure on credit spreads.  Outcome: wrong again.  XHB was up less than 1% from the beginning of June to the end of the year despite the fall in Government yields and having a duration of over 6 yrs as spreads widened.

Aug 8, 2011: Sold 250 shares of XHB at $20.65, 2.6% total return.

Aug 8, 2011: Bought 950 shares of SilverBirch Energy, SBE, at $5.50.  Rationale: This was a spin-out from UTS after the take over by Total. Possibly sold for non-economic reasons (i.e. just didn't fit into their strategy for buying UTS). Significant ownership and board representation by West Face Capital and The Children's Investment Fund (presumably they know what they're doing?).  This is an oil sands exploration company, seems to go along with the idea of exposing yourself to positive surprises (see The Black Swan).  Outcome: finally right.  Teck Resources makes bid for SilverBirch to develop the 50% of two projects that they do not already own.

Jan 10, 2012: Sold 950 shares of SBE at $9.65, 75.5% return.


  1. I've wondered about this in regards to TFSA's. If investment is in stocks (ie: 100 shares of ABC purchased at $5 = $5000) and then sold 6 months later for $7.50, is that $2500 gain taxed?

  2. No.
    "the investment income, including capital gains, earned in your TFSA is not taxed, even when withdrawn"