Not much excitement in June. The portfolio stayed relatively flat however my forecasted annual income from my investments climbed higher since I added to several positions.
I recently added a new position in Federal Realty (FRT). It's a dividend aristocrat REIT company. Together with Realty Income (O), these two companies will provide me decent dividends in the real estate category.
The purpose of this portfolio is income replacement. I have a desire to one day live off these dividends. The dividends must be completely safe even during economic recessions. The companies I invest in must have products that have strong demand and are not at the whims of "fads" that come in and out. The portfolio chart below highlights companies that I consider Core positions as Green. Yellow positions are Supporting positions and Red are Speculative. My dividend investing philosophy holds strong with the Core names but the Speculative names are purely for capital gain alpha.
Positions can only be labeled as Core by me if the companies have demonstrated that they can withstand the test of time, they offer products or services that the economy uses no matter what, and have a proven track record of dividend safety and dividend increases.
If Industrials ever pull back, I will be looking to add to names like MMM, ITW, and a military defense name like GD. However, industrials are way too hot right now. I do hope to increase my weight in Industrials eventually since my weighting is way too light at this time. Industrial companies will always pull back as their betas are rather high. When the economy slows down that will be my chance to add into high quality companies at an low price. Industrials tend to overshoot downwards when the economy slows down.
In terms of Financials, I do not like investing in banks. They are too risky for my taste and I do not know how to read their financial statements. It's far too complicated and I do not know who they are lending money to. I tend to prefer financial middlemen companies. These include payment transaction companiesl ike Visa and MasterCard. They offer "tollroad" type operation and have no lending risk. I believe the future will be cashless especially for the rest of the world. Many of the developed nations in the world still use cash and Visa + MasterCard is the future, hence my extremely long stance on V and MA.
Technology companies have enjoyed a very strong run. I have unfortunately been left out. I never chase price gain as I am always about the income from dividends. If the technology companies ever pull back I will open my eyes to high quality dividend paying technology companies like MSFT, ACN and ORCL. Although I view Amazon, Facebook, and Google as leaders in their respective industries I just cannot get myself to invest in anything that pays no dividend so I will watch those giants on the sidelines.
-YD
Awesome job YD. Thanks for sharing. I don't think I'll be making any individual stock purchases anytime soon.
ReplyDeleteWell done, keep up the excellent work.
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