I have 1.2mm HELOC
Have 400k in TFSA/RRSP for both of us. Down about 100k from Feb highs. One of us has a DB pension plan as well.
Recently as market went down, I borrowed 200k from HELOC and bought 100K of Blue Chip dividend stocks (CAD). Average div yieldis about 7.5%. Got in on Mar 23.
Also invested 100k in USD stocks in blue chip defence , tech and financials. Div Yield is a out 4.5%.
My borrowing cost is prime @2.45% - 54% tax = 1.12%
I am up about 15-20%. I plan to pay my mortage and not pay HELOC. Interest on the HELoC can be capitalized and used for reducing tax liabilities.
What are risks of using this strategy? Am I missing anything?
Our annual income is about 325k. All employment.
Still have access to 1mm HELOC. Am I overstretching my self on borrowed money?