VDY & XDIV in margin account or sell it off?
In January to March I loaded up my Margin account with VDY & XDIV ($30K each). I'm servicing the interest with cash (4.45% but since I can claim it it will effectively be 3% or so) and I am just dripping the dividends back into it. This is my first time using margin but have kept my LTV under 30% not including my gains.
I'm now +$10.5K in the green on this thing after these ETFs have continued to rip (fortunate timing I guess). I'm not a dividend investor, I'm a long-term growth investor (CAGE & XEQT anchor my TFSA, RRSP & non-registered accounts at about 70% total, the rest in other funds and stocks) and this is my first time dealing with margin. I got these ETFs as they're more tax efficient due to the CAD dividends and qualify to allow me to claim the interest on the margin loan.
Here's my dilemma, I just re-balanced my non-registered account and sold off a few positions. I'm totaling about $10K in capital losses from those moves which lines up with the $10K or so I'm up on these dividend ETFs.
Should I just cash out and consider this lucky timing? And take that $10K and invest it elsewhere since I can offset the capital gains tax? Or would you just let this thing ride? It's not quite a "house money" situation yet but the +$10K gives me a nice little buffer to absorb a downturn and ride it out without much fear of this house of cards collapsing (plus these are fairly stable holds in a downturn relatively speaking). Historically it looks like these ETFs can go sideways for years on end... I know you don't have a crystal ball, but the timing seems good here to either get out or let it ride. I've seen a lot of speculation online that these are about to run out of gas and the best of this run may be over...