Matt Byers, 39
Occupation
Office manager
His portfolio
Includes shares in BCE Inc., Connacher Oil and Gas Ltd., Inter Pipeline Fund, Lundin Mining Corp., Leisureworld Senior Care Corp., Power Corp. of Canada, TransGlobe Apartment REIT and Thomson Reuters Corp.
The investor
Matt Byers spends "a great deal of his spare time" scouring the financial markets for out-of-favour income securities. He would like to accumulate a large enough income stream from his investments "to be able to retire."
Contrarian investing approach
Mr. Byers prefers prospecting in sectors that are out of the headlines because that's where bargains can be found. Even better if the news is all bad: "I love going shopping when panic strikes," he says.
"Things always happen to create good investing opportunities. For example, when Jim Flaherty changed the tax rules for income trusts, I bought KCP Income Fund [and other income trusts]… and made a tidy profit when KCP was taken private."
The financial crisis of 2008 and 2009 was also another opportunity to go shopping. "The result is I now have yields of 7 to 10 per cent on bonds from blue-chip companies like BCE and CIBC."
Floating-rate preferred shares
He recently added to his position in Bombardier's series 2 preferred shares, whose dividends are tied to the prime rate. In his opinion, the Bank of Canada will resume raising interest rates as soon as July, which means dividends on Bombardier's preferred shares will also be rising.
"I like rising dividends and when you know a dividend is going up, you buy. Floating preferred shares are also a perfect hedge against inflation."
Best move
"It was buying floating-rate preferred shares of large-cap companies [including Brookfield Asset Management Inc. and BPO Properties Ltd.]before most people noticed interest rates have only one way to go [which is up] What could be better than the greater security of a preferred share, with capital gains to date of more than 80 per cent?"
Worst move
He bought shares in Allen Vanguard, gambling they would avoid bankruptcy. But "equity holders got nothing" when the company was taken private. "That experience taught me to gamble at the racetrack instead."
Advice
"Once everyone is interested in something and it gets lots of coverage in the media, it's likely too late. You will be buying just when the momentum dies."
Special to The Globe and Mail
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