Thursday, December 6, 2018

November 2018 Portfolio Summary

The market has been volatile recently. It has been range bound for several weeks primarily on fears of the escalating trade war with China and the slight slow down of the American economy. There rae discussions about the rise in interest rates slowing things down, and talk about how the boost from this year's tax cut will not be so evident next year.

The S&P500 looks like it's testing its lows again. Dollar is relatively strong. And oil is very cheap, appearing to bottom at around $50. Overall things look quite unpredictable right now in terms of where the index will head. There are too many outside variables that happen on the news day to day. For example, the American government arrested the CFO of Huawei today in Vancouver for violating Iranian sanctions. This increased uncertainty due to escalating tensions between China and the US. This type of event happened with Chinese ZTE in the past and it did not help the market calm down.

Since it is impossible for me to predict the market, my objective is very simple. Acquire high quality companies that pay dividends with very safe payout ratios. For every dollar that I earn from my vocation, I save a good percentage and allocate them to income producing stock. I don't time the market but instead deploy capital periodically (i.e. every 2 weeks to every month). The graph I focus most on is the growth of the forward annual dividends my portfolio will generate, not the net worth of my portfolio. I expect the net worth of my portfolio to climb steadily over time as the shares I own will continuously increase their dividend year after year. Net worth is secondary to income growth. If an asset generates more income, the more valuable it will become.

Additionally, any dividend income I get I reallocate back into the stocks that paid them. Since I am young and in the accumulation stage of my life, my goal is to collect as many shares as possible and then let the shares compound on their own. I expect each of the shares I purchase will be able to increase their dividend year after year, further amplifying the income compounding effect.

The SPY S&P500 index has peaked at $293 this year and dropped down to around $263 twice, it looks like it will hit it a third time soon. I deployed around $44,000 at the midpoint of the high and low when the SPY was around $279 this week. The market has recently fallen further and I am collecting additional cash to deploy. I estimate by Christmas to New Years I can have around $7000 to invest. My goal is not timing the market but acquiring more shares to increase my income. Regardless if the market is low or high that $7000 will be put to work. My plan is to continuously deploy several thousands of dollars per month and over time the money will dollar cost average since sometimes I purchase at the lowest valuations and sometimes at the highest.

Name Ticker Sector       Value   Weight        Divies      Yield S&P Fin VL Fin VL Safety
Johnson & Johnson JNJ Health $37,511.67 6.31% $938.90 2.5030% AAA A++ 1
Altria Group Inc MO Staples $32,111.11 5.40% $1,918.87 5.9757% A- B+ 2
Philip Morris International Inc PM Staples $31,725.78 5.33% $1,716.74 5.4112% A B++ 2
Visa Inc V Financial $31,601.18 5.31% $227.04 0.7184% A+ A++ 1
PepsiCo PEP Staples $24,973.19 4.20% $801.61 3.2099% A A++ 1
Home Depot Inc HD Discret $24,614.31 4.14% $584.57 2.3749% A A++ 1
NextEra Energy Inc NEE Utilities $24,275.10 4.08% $596.76 2.4583% A- A 2
Becton Dickinson and Co BDX Health $21,898.23 3.68% $283.57 1.2949% BBB A++ 1
Realty Income Corp O REIT $19,095.22 3.21% $780.17 4.0857% BBB+ A 2
Mastercard Inc MA Financial $18,967.11 3.19% $125.27 0.6605% A A++ 1
McCormick & Company MKC Staples $18,822.06 3.16% $284.01 1.5089% BBB A+ 1
3M Co MMM Industrial $18,578.82 3.12% $506.61 2.7268% AA- A++ 1
Xcel Energy Inc XEL Utilities $16,069.99 2.70% $462.88 2.8804% A- A+ 1
Ross Stores Inc ROST Discret $15,897.48 2.67% $177.93 1.1193% A- A 2
Air Products & Chemicals, Inc APD Materials $15,864.61 2.67% $437.89 2.7602% A A+ 1
Clorox Co CLX Staples $15,660.48 2.63% $369.82 2.3615% A- B++ 2
Procter & Gamble Co PG Staples $15,279.70 2.57% $473.75 3.1005% AA- A++ 1
Illinois Tool Works Inc. ITW Industrial $13,839.40 2.33% $422.32 3.0516% A+ A++ 1
Automatic Data Proc, Inc ADP Tech $13,647.39 2.29% $304.24 2.2293% AA A++ 1
Kimberly-Clark KMB Staples $13,609.78 2.29% $488.77 3.5913% A A++ 1
WEC Energy Group, Inc. WEC Utilities $13,523.48 2.27% $410.51 3.0355% A- A+ 1
AT&T Inc T Telecom $13,248.20 2.23% $880.57 6.6467% BBB+ A++ 1
The Coca-Cola Co KO Staples $13,009.21 2.19% $414.85 3.1889% AA- A++ 1
Dominion Resources, Inc D Utilities $10,844.70 1.82% $488.55 4.5050% BBB B++ 2
Church & Dwight CHD Staples $10,840.20 1.82% $143.29 1.3218% BBB+ A+ 1
Colgate-Palmolive Co CL Staples $10,059.17 1.69% $269.40 2.6781% AA- A+ 1
Microsoft Corporation MSFT Tech $9,961.98 1.67% $170.10 1.7075% AAA A++ 1
Starbucks Corporation SBUX Discret $9,432.28 1.59% $205.11 2.1746% A A++ 1
TJX Companies Inc TJX Discret $9,305.62 1.56% $157.38 1.6912% A+ A++ 1
Stryker Corporation SYK Health $8,902.29 1.50% $109.17 1.2263% A A++ 1
McDonald's Corporation MCD Discret $7,198.78 1.21% $181.98 2.5279% BBB+ A++ 1
Medtronic plc MDT Health $6,972.49 1.17% $146.98 2.1079% A A++ 1
Abbott Laboratories ABT Health $6,876.13 1.16% $109.38 1.5907% BBB A++ 1
General Dynamics Corporation GD Industrial $6,825.17 1.15% $150.12 2.1995% A+ A++ 1
Honeywell International Inc. HON Industrial $6,562.98 1.10% $154.58 2.3553% A A++ 1
General Mills, Inc. GIS Staples $6,286.90 1.06% $311.64 4.9570% BBB+ A+ 1
Kraft Heinz Co KHC Staples $3,427.03 0.58% $174.88 5.1031% BBB- A 2
Resideo Technologies Inc REZI Industrial $101.83 0.02% $0.00 0.0000%
Garrett Motion Inc GTX Industrial $34.34 0.01% $0.00 0.0000%
Misc Type ……….. Partial Totals Weight Yr Dividends  Avg Yield …..832 …..9 …..82
Equity Stocks $577,455.40 97.08% $16,380.21 2.8366%
Investable US Dollars $10,847.42 1.82%
Miscellaneous Assets $6,503.00 1.09%
. .. Equity + Misc Weight …..2 ….. …..222 …22 …..223
Total $594,805.82 100.00%

My portfolio peaked at $612,000 and with recent volatility dropped to $595,000. Due to the increasing size of the portfolio, small single digit percentage swings in the market can make appreciable fluctuations in the portfolio's net worth. However, dividends have remained relatively unchanged comparing dividend output the portfolio is at now to compared to dividends when the portfolio was at its highs. Price fluctuations are totally random and unpredictable but dividend payout is more easily determined. One can read the annual report 10-K or quarterly 10-Q filings of a company to calculate if the cash flows or earnings are sufficient to pay the dividend, or calculate how much debt the company has to see how safe the balance sheet is. The focus of the portfolio is on the dividend payout, the growth of the dividend, and the safety of the dividend.

In terms of end of the year goals, it may be challenging to hit $600,000 by end of year depending on market volatility. I am not too focused on the absolute dollar amount goals. In terms of income growth, I am quite happy with how much dividend income my portfolio now generates after I increased my shares this week. The portfolio produces around $1360 in dividend income every month on average. I want this dividend number to surpass $20,000 per year in dividends sometime in 2019 which is around $1,670 a month in dividends.

The portfolio is heavily concentrated into defensive names as they produce high income consistently. They also usually have a good track record as well, as I like to invest primarily in dividend aristocrats with 25 years plus of consecutive dividend increases. Since I am more weighted in defensive names, the recent declines in the broad indices have not hit my portfolio as hard.

Happy investing


  1. Hey YD,

    Your forward annual dividends chart is exploding. Investing $44k with the market trending down is incredible. Being greedy when others are fearful is just what our friend, Mr. Buffett, advocates!
    You're setting yourself up for a great finish to the year in December to springboard into 2019.

    Take care,

  2. Hi Young Dividend,

    thanks for sharing your monthly dividend income. Again, you’re taking part in Income Heroes, the analysis of the results of the most seasoned financial bloggers around the world. Your results including your position in different rankings are available here:

    Keep on investing and see you next month!



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