Your Sunday Portfolio's Update
Hi everyone! To be transparent, I will give weekly updates on Sunday of my main portfolio. If I have more time, I will give biweekly updates on my second portfolio, the “Funds For Fun” account. The main account is the Alex Dividend Growth Portfolio (ADGI). For this taxable account, I use the stock trading platform called Public (this is an affiliated link where I get a small kickback if you sign up with my referral code/link!). Public charges no fees to invest, you can choose to have your dividends to be in a reinvestment plan (DRIP) (this is very important and will likely be explained in another blog), the platform is simple and user-friendly, and you can buy fractional shares. I have enjoyed Public’s platform during this past year and will continue to use it in the future. The link above is an affiliated link sign up today and get a free slice of a popular stock between $3-300! This is my compounding machine in which I hope to reach financial independence by using dividend growth stocks to supplement my income.
The second portfolio is to act as a high-return savings account. For this taxable account, I use an M1 finance account (Sign up today and get $10 for free!). I will use this fund to help pay a down payment on a car or house, and any other future expenses. Instead of getting a 1-2% yield/return, I hope to get an 8-12% return.
You can check out this Googlesheets link to see which companies I invest in, which ETFs my finance invests in, my Roth 401 allocation, and my “Funds for Fun” portfolio that I am using to pay for future expenses. You can also check this website called Track Your Dividends (I am not a sponsor, but use and enjoy their product) to freely track the dividends of companies you invest in. You can create multiple portfolios, and see the future value, diversification, and next upcoming payment of your portfolio. This is the main website I use to track my annual income and the future value of my portfolio. Sign up for free and effort start to track your portfolio. This link will send you to my fiancée and I’s holdings, 401k, and Funds For Fun account to see what we invest in and dividend income.
In each update I will go over my current mindset, any buys or sells, reasons for why I bought or sold certain stocks, the future mindset of the stock market, and visual graphics of my DGI holdings.
Financial Disclaimer: I am not a Certified Financial Advisor (CFA), I am a meteorologist. The blog posts about investing are my opinions and for your entertainment purposes. They should not be considered financial advice. Investing in the stock market is risky and you can lose money. If you want to invest in the stock market, or have questions about how or where to invest, please seek a CFA.
Affiliate Link Disclaimer: Some of the links are affiliated links with Public and M1 Finance. As a member of their platform, I earn a small portion if you click the link and sign up with them. I enjoy these companies and would not recommend them to you if I did not believe in their mission and platform. Thank you!
Alex Dividend Growth Portfolio Updates
Current Mindset
As the first portfolio update blog post and as we close out the year, I have made several changes to my portfolio throughout the year 2022. The major changes have been mostly around percentage distribution allocations and buying/selling stocks that either don’t fit my goal or companies that I do not feel are performing well. During 2022, I tried different percentage allocations. However, I wanted my portfolio to be concentrated in companies that I understood, could grow or withstand any financial environment, and fit my goal of being compound machines. When I finished tinkering with the portfolio (for now lol), I ended with a portfolio populated by a very popular dividend exchange-traded fund (ETF) called the Schwab U.S. Dividend Equity ETF (SCHD) and several strong free cash flow and wide moat companies.
I plan to use SCHD as a small core to the large satellites in my portfolio. I am referring to the core and satellite method approach. From the ETF website, they describe SCHD as a “large value ETF that focuses on owning high-quality and good-paying dividend companies. It tracks a market-cap-weighted index of 100 dividend-paying US equities. SCHD is a market-cap-weighted fund whose selection universe only includes firms with a 10-year history of paying dividends. Within that universe, SCHD uses fundamental screens (cash-flow-to-debt ratio, return on equity, dividend yield, and dividend growth rate) to build its portfolio. The objective is to focus on quality companies with sustainable dividends.”
The satellites are well-known companies that you use or visit frequently. By simplifying the portfolio, I can achieve two objectives. The first object is to make it easier for me down the road when I am busy and investing is not a burden. The second objective is to put more money into companies and receive higher dividends. More dividends reinvested means explosive compounding. I understand these companies, and it does not concern me by having more than 5% of my portfolio in one company. This strategy is not for everyone, so I would advise not copying it. I would highly recommend using a blend of ETFs instead, like my fiancée’s portfolio! Also, I might change my mind in the future, but currently, I am confident in this portfolio.
The Buys and Sells
The Buys (Updated on 12/30/2022)
I was not planning on buying any stocks until next year, but I bought about $90 bucks of Apple (around a 0.7 share of Apple) this week.
The Sells
By simplifying the portfolio I had to sell five stocks. The five stocks that I completely sold out of are Target (TGT), A. O. Smith Corporation (AOS), Procter & Gamble Co, Medtronic plc (MDT), and Southern Company (SO).
Why I bought and Sold
Why Did I Buy it? (Updated on 12/30/2022)
I did not buy any stocks in the last week as a few of my stocks have grown expensive and I am preparing/hoping to have the market continue a downward trend. However, I did buy partial shares of Apple this week as it hit its 52-week and was at $126-128 per share; an opportunity that I could not pass up!
Why Did I sell?
To start, I like all five companies that I sold. They are all really solid companies; it was really hard to sell to Target, as my fiancée shops there almost every other week. I have three reasons why I sold out of these companies. The first reason was to be able to concentrate my portfolio with fewer stocks. I wanted to put more money into stocks like Costco, Lowes, and Microsoft. Every few months I evaluate my portfolio and think of my future. I plan to decrease this as time goes on, but as I am young and like investing as a hobby, I will continue to do so. The second reason was that these companies didn’t fit into these three baskets: either it was not a compounding machine, I didn’t fully understand how the company made money and did not feel comfortable holding the stock for decades, or there other stocks (within the same sector) that were better. The third reason was to try and simplify the portfolio and use SCHD as a small core. I love SCHD, and believe it will aid my goal of being financially independent by the time I am 40.
Future Mindset of the Stock Market
As a reminder, I am no fortune teller nor do I have a crystal ball, this section is my current opinion about the future stock market! You may be looking at a large amount of cash in my ADGI account, and may wonder, “Why didn’t you buy into SCHD and balance out your portfolio?” Well, currently I think we are headed towards a bear period for the next month. This a purely a gut forecast, but I would rather wait and see how far the market goes down before I put any more money into the portfolio. As for my Funds For Fun account, I am also pausing any further deposits into my M1 Finance account. My fiancée is also following the same drill.
On the other hand, for my 401k account, I am increasing my contribution % to take advantage of the already current dip. With a 35-year time horizon with this account, I am comfortable with increasing my %.
Asset Allocation and Total Income
As we come to a close of the investing year 2022, I have a high amount of cash ready for the next year. My highest holdings in the ADGI are Waste Management, Lowes, Coca-Cola, Kroger, and Church and Dwight. Some of my favorite companies. For the next investing year, I hope to increase my position in many of these companies. Especially, Costco, Microsoft, Apple, and Union Pacific.
I finished the year making $234 bucks purely from my dividend-paying stocks. I still find it unreal that my portfolio is making this much. In the next year, I hope to be able to increase this amount to $600 bucks!
Below is a pie chart of my portfolio and a bar chart of how much I am making this year in dividends! If you have any suggestions about how to show my portfolio or want to see more of my portfolios on these updates, let me know!
Thank you for taking the time to read, check some of my other blogs by going back to the home page!
