He Copied Hedge Fund Filings to Build an $875,000 Tax-Free Portfolio of 50 Stocks
3 min read · RealCase summary
Albert, a 40-year-old who works in financial services, built an $875,000 TFSA by watching 13F regulatory filings from asset managers and hedge funds for stocks that strong managers were buying while the price was falling, then buying in at a cheaper entry point than the professionals had: "If he notices the stronger managers are buying a stock, it goes on his watchlist."
He also used an in-kind contribution technique, transferring stocks and options from his taxable account into his TFSA after-hours to exploit gaps in how fair market value gets assessed. In one example, a stock that closed at $7,000 spiked to $8,500 after-hours; because $7,000 was the last traded price, the Canada Revenue Agency treated that as the fair market value for the transfer, letting him move the position into his tax-free account with a built-in $1,500 gain already locked in. Individual in-kind transfers of this kind ranged from about $8,000 to $30,000.
He typically holds around 50 stocks with no single position larger than 5% of the portfolio. He acknowledges leaving money on the table by trimming some winners -- he estimates a 2013 Meta options call he no longer holds in the TFSA would now be worth "a few million dollars" had he kept it there.
Key takeaways
- ›Researched 13F filings from hedge funds and asset managers to find stocks they were accumulating, especially after price dips
- ›Transferred stocks and options into his TFSA at strategic moments to maximize tax-free growth without exceeding contribution limits
- ›Capped each of his 50 holdings at 5% of the portfolio, trimming winners to stay diversified, reaching $875,000
Original source
Read the original (The Globe and Mail)
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