July 17, 2023

On Monday the S&P 500 was up 0.4% while Toronto was down 0.2%

Constellation Software was up 2.0% after announcing a big acquisition. What a winning company it has been.

The Melcor REIT was up 6%. That’s on small volume so may not mean anything. But I now see that they announced Friday (presumably after the close) that the distribution for July would be (remain at) 4 cents. They are somewhat tight for cash due to higher interest rates and the ongoing vacancies in their office buildings. Unfortunately, this may signal that they plan to cut the distribution for August after they come out with results. I believe they normally declare the distribution three months at a time. The units have a big discount to book value but we could certainly see a price drop if they have to cut the distribution. 

I scraped up some cash and added to my perpetual preferred share position today. In one account I added some Great West Life. GWO. PR.Y yielding 6.8%. Then in another account I was tempted to buy more of the GWO but thought it better to diversify so I placed an order for some CU.PR.E yielding 6.7% but it has not gone through yet as it was late in the day and I bid less than the offer price.

Possibly I am over-doing it on these perpetuals. But they look attractive and safe to me. I have historically been light on fixed income and these higher interest rates (and specifically the higher yields) seem like a good opportunity to increase my fixed income allocation. I like the idea of a substantial amount of dividends flowing my way regularly.

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