I've reviewed your portfolio and th...

I've reviewed your portfolio and the securities, and I would say that you have done a first rate job--both in the balance of your portfolio and in the selection of securities. (Portfolio omitted) Perhaps you have a certain number of skeletons in your closets, unless certainly your bond, stock and mutual supply selections strike me as remarkably well thought out.

INVESTMENT OBJECTIVES

In your verbal expression you made no mention of your investment objectives; however, it is implied from your portfolio that you are investing for income and preservation of capital, with reasonable emphasis onward growth. I am impressed with your commitment to the education of your grandchildren. In my opinion, that is perhaps the best investment that you are making in the future

OVERVIEW

I have estimated that the income from your portfolio is about $24000 a year. More than likely, you have other sources of income--perhaps from a pension plan as well as the Canada Pension Plan and the advanced in years age supplement.

Overall, I like the balance of your portfolio as it stands. Nearly 50% of your portfolio is in fixed income investments. The other half is made up of used by all stocks and mutual funds. Your positions in these pair categories should provide growth in capital across time.

FIXED INCOME

Focusing onward the bond and GIC holdings, overall they exhibit good quality, medium-term holdings--maturing in about three years. With relatively short maturities, you are in a virtuous position to ride out the rise we are experiencing in short-term interest rates in as well-as; not only-but also; not only-but; not alone-but Canada and the United States.

The solely criticism I would have of your prisons and GICs is that you have a disproportionate commitment to the province of British Columbia. At a certain point, you may want to betray part of the B.C. bands even if you take a los and pervert with money [i]or[/i] gain one or two bonds in the seven to 10 year range in order to tie down interest rates which are publicly approaching 10% for that maturity. For example, BC newly came to market with a 10-year "step-up" chains that pays 8.7% in the first year, 90% in the other 9.125% in the third, and to such a degree on.

EQUITIES

Your preferred and usual shareholdings are certainly good quality companies--real survivors. I like your careful selections among utilities (Canadian Utilities, BCE IPL and TransAlta) and your holding of banks (Bank of Nova Scotia and Royal Bank). I also like Agnico Eagle which shows virtually no income but moves at least some exposure to gold

If you do have any spare cash available, you might think about building up your bank holdings at this time by dint of adding to the Bank of Nova Scotia or calm introducing the Bank of Montreal ($2450) to your portfolio. The Bank of Montreal is doing well domestically and appear to bes to have a head start across other Canadian banks in the US

Among utilities, West Coast efficacy ($23.00) is on a major capital expansion programme as it gears up to service the gas discoveries in Northeastern BC Its earnings and dividend should continue to impel up nicely over the nearest several years. In fact, I would favour it through the whole extent of TransAlta if there is to be a choice.

CONCLUSION

I think you are doing a first rate do job-work with your investments. While you are not investing in high potential vegetation areas or cyclical securities, you are still investing in constraints stocks, and managed investments (mutual funds) that should provide reasonable income in the near to come and moderate growth over the long-term

William W Berghuis is President of Berghuis Investment instruction Ltd.

Copyright Canadian Shareowner Magazine Inc. Jan/Feb 1995

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