Thursday, December 31, 2015

Dividend Report 2015

This year my dividend investing went to the next level. I am writing about it, which forces me to structure my thoughts just that much more. In addition, I'm more actively planning how I put money into my portfolio, with automatic deposits, and recently my car fund. My Active Passive screener keeps evolving, but the basics remain the same: pick out companies with a great track record of paying and growing dividends. I take some risks with higher yielding stocks, and I certainly feel the pain when my two highest yielders (ARLP and TAL) tanked in valuation. ARLP has been paying dividends, but TAL cut theirs and is looking at a merger. Uncertainty is not what we want in our dividend portfolio. On the other hand, the majority of my portfolio paid and increased dividends on the expected time line. There's nothing better than getting paid for past decisions and seeing that pay increase.

My goal this year was to build out my portfolio with a mix of higher yielding and faster growing (but lower yielding) stocks. I now hold some well-known dividend aristocrats, some utilities, and some other industry to diversify. My goal was to end the year with a forward dividend income of $ 4850. This was based on a long term schedule of goals that puts me at $25k by 2028. I'm pleased that I was able to beat this and reach $ 5,638.17 of expected income. Of course this was mostly due to putting a ton of money into the portfolio. I kept an eye on growth though, and even if I put no new money in, I expect this to grow by $250 next year, which would put me just shy of my 2016 goal of $ 5900 of expected income.

Monday, December 28, 2015

Dividend Report December 2015

All my dividends for the year have come in.  December saw a special dividend from CINF, a lowered dividend from TAL. Also, unlike others years, PEP is paying out early January. This may skew the month to month numbers a bit, but it's not material otherwise.
December was huge for investments. I put close to $18k into my portfolio, prepaying three years worth of fresh cash. This was half money I saved up to buy a new car.

December overview:
  • I received $ 380.07. More than I expected, thanks to the extra off-cycle CINF payout.
  • Trailing 12 months $ 4,522.11
  • Forward 12 months $ 5,638.17
In January I expect $ 282.53. 

Thursday, December 24, 2015

Buy: NEE

This week's purchase may be a lesser known company. NEE is a utility with a broad coverage from coal to solar. I think their diversification is what makes them a better option that some other utilities. NEE meets my purchase criteria of a good div growth history, payout ratio, and yield. They scored 18 out of 20 on my Active Passive screener. I purchased 57 shares of NEE, adding $ 175 to my dividend income in the next 12 months.

Friday, December 18, 2015

Buy: JNJ

My car money is being put to work in my dividend portfolio. By 'pre-paying' my dividend investments and paying off my car over three years, I benefit from being in the market the extra time, picking up dividends while paying a low interest.

I'm building out my portfolio by adding to existing positions. After my HCP purchase my focus is now on some smaller positions that I want to grow. I added 62 shares of JNJ to my existing 9, building up that position significantly.  A Dividend Growth Stocks analysis on JNJ was just posted and confirms how strong JNJ is.

Wednesday, December 16, 2015

Buy: HCP

As was the plan, I'm investing the money I didn't immediately have to use to pay off my new car into my dividend portfolio. My first purchase is adding to my HCP position. HCP has been doing very well for me. I picked up 183 shares, which makes HCP my largest position. HCP now brings in over $1,000 of dividend income annually. I don't expect to add to this position any further, and will instead balance out the portfolio by adding to some smaller positions.

Div history for HCP looks great, which consistent growth on top of a great yield already.

Wednesday, December 2, 2015

Car Loan means Dividend investments

I closed on my new car loan. The interest came in at 0.9%. For the roughly $ 40k balance this means under $ 600 in finance charges over three years. This also means that if I put $10k in my dividend portfolio now, I and I make 3-4% on it, I'll make roughly $1000 in dividends over the three years of the loan. The risk is that the price of the shares may fall, but I plan to hold on to the stocks for the long run. I will probably invest before the end of the year. And I may put in $18k total or half the money from the car fund. I will stop the regular automatic cash transfers -- that money will go the the car payments.

What I really like about this set up is that after my car is paid off, I will still have my dividend stocks. For the 36 months, normally I would have put in $ 500 per month, or $18k. If I put in the $18k right now, I instantly benefit from the dividend machine. The remaining money from the car fund and the additional fresh cash will be drawn down for the car payments. I will also have a higher insurance and property tax bill that I will need to cover. As I mentioned before, I have two 0% loans that will be paid off in November 2016, at which point I plan to split those payments into funding a new car fund and adding fresh cash to the Active Passive portfolio. My wife's car will be three years old by then, and I'll assume we can drive it for 10 years. Conservative, as the previous car lasted 13 years for her, and 15 years for me. Saving up the money in a interest savings account (or CD if rates become attractive) will give me piece of mind that I can buy a car if and when needed. Puts me in a much better position if it's possible to say no to financing.

Roughly my dividend investment plan is as follows
  • 2015: invest $18k in dividend portfolio, halt fresh cash transfers
  • 2016: no additional capital input until other loans are done. Reinvest dividends only.
  • 2017, 2018: slowly add in half of prior loan payments as new investments.
  • 2019: all loans done, evaluate financial situation. Split new car payments into funding new car fund, and dividend investments.
Of course all this can change if significant events happen. Extra bonus, or lack of bonus, extra income or extra bills. Life's unpredictable, but it's good to have a short term plan that gets us closer to the long term goal.

Monday, November 30, 2015

November Dividend Report

November came in mostly as expected. I bought extra shares of CAT to build up that position per my plans. TAL disappointed by cutting div by 37.5%, and is now on my watch-to-sell list. My other finances had a major event as I got a loan to finance a new car. This in turn will drive dividend strategy for the next 3 years.
  • I received $ 658.49, which is what I expected last month. Note that RY fluctuates based on USD and CAD exchange rate.
  • This was my highest dividend income in one month ever. The Feb/May/Aug/Nov cycle pays the most, so they will probably keep hitting 'highest month' records.
  • Trailing 12 months $ 4,471.34
  • Forward 12 months $ 4,863.03
In December I expect $ 317.97. I plan to invest my dividend income from November and December, as well as the money I didn't have to put into my new car right away, since I was able to get a low interest loan.

Monday, November 23, 2015

Dividend Stocks or Nice Car ?

My 15 year old car finally died. It's been a long time coming. I've been saving up in a car fund, and now I have to decide what to do.  A frugal investor might buy a used car, several years old, low mileage, and drive it until it's dead. If you can get low interest financing on it, even better. Financially that would be the smartest thing to do.  As I've said before, my goal is more complex that just let my passive income pay for my expenses and to get there faster I give up things. Instead I want to enjoy life, and enjoy things in life. This includes traveling with my family, living in a nice house, and driving a nice car. I fully understand this costs money, and adds extra years before I'm financially independent. Here's what I'm thinking.

Thursday, November 19, 2015

Merger: Dividend Portfolio Impact

One of my holdings, TAL, announced a merger with fellow container company Triton. What does this mean for my dividend portfolio ? After TAL cut their dividend by almost 40%, from .72 to .45 per share, TAL has been on my Watch to Sell list. However, with the newly announced merger, it may be worthwhile to hold on just a little longer.

With any investment, there are always three options: do nothing, shrink (or close) the position, or add to the position. I'm not adding, which leaves doing nothing and closing. I have 150 shares, which earned me about 1500 in dividend payments since I bought them. However, the share price declined sharply, leaving me with a net loss of about $700. TAL pays me $270 per year at the newly lowered dividend. Let's look at my options.

Wednesday, November 11, 2015

Buy: CAT

I averaged down on CAT, picking up 21 shares for $71.60.  This puts my total projected dividend income for the next 12 months at $4,863. CAT is under pressure, but solid long term. If / when economic conditions in China and other regions improve, CAT stands to benefit. They've raised dividends consistently, meaning management knows how to handle the cyclical nature of construction booms and busts.
CAT scored 18 on my stock screener, out of a possible 20. JNJ also scored 18, and together they tied for the top spot of my current holdings. A few other stocks scored higher, but I want to build on my positions before going into other stocks.
This purchase was funded by dividend income from October, and fresh capital from October and November.

Saturday, November 7, 2015

October Dividend Report

This October I did not buy any stocks. I've been going back and forth between JNJ and CAT, or adding a new position in EMR. I think EMR is out for now given their low (1%) increase this past year. I will probably add to CAT next week. CAT is under pressure, but I think it's priced into the stock and long term they are solid.

Tuesday, October 13, 2015

What Goes Down ...

Late August the stock market dropped significantly. The usual reaction ensued. People panicked, sold stock at now lowered prices, and the market dropped for a few more days before stabilizing. After a few small bounced up and down, the past week we've seen a bigger climb back. Two investment strategies should be high-lighted.

First, investment discipline. If you panic and get out of the market during a drop, you'll probably miss out on the bounce back. In fact, if you buy during a down time, you follow the old principle of 'buy low, sell high'. Many emotional investors to the opposite. If you have a set schedule then a drop in the market presents an opportunity to buy up some great stocks at bargain prices. Dividend growth investors love it when quality stocks go on sale. I buy stocks every month, with income from the prior month and fresh capital. Over time this results in dollar cost averaging, and you isolate your portfolio from timing the market. It takes some discipline though, to buy into a falling market.

Monday, October 5, 2015

Two Dividend Picks for October

Our Active Passive screener scores hundreds of stocks automatically based on their dividend history and other characteristics. This month, we found two stocks that had a perfect score. This means we should take some time to learn more about these companies and see if they are a fit for our portfolio and investment goals. The companies are EMR and CFR.  Details below.

Friday, October 2, 2015

September Dividend Report

For dividend investors September was a good month. Lots of great dividend growth stocks for sale, and the dividends keep rolling in, even if stock values went down.

In my Active Passive Money portfolio, I was able to add a new position in CAT. CAT was on my wish list for several months. CAT's stock price, like the rest of the market has been hit. And the business is in a downturn. But I trust that CAT's management can work this out like they have in the past. That's why I look for companies that have consistently paid and grown dividends even in wider market downturns.

Some other stats for September:

  • I received $413.27 in dividends this month. Which is exactly what I expected a month ago. It's one thing I love about dividend investing.  This is my best September ever. 
  • The trailing 12 months paid $4,169.39 in dividends. 
  • Year-to-date income is $3,316.17.
  • Forward dividends are $4,960.10, which beats my goal of $4,850 for this year.
I have invested all my cash in my brokerage account. I will put in $500 fresh cash in October, and I expect $167.38 dividend income. I'm debating whether to grow my JNJ or CAT positions that are very small right now, or if I should look at EMR or some other great bargains.

Wednesday, September 16, 2015

New Position: CAT

I bought 13 shares of Caterpillar this morning, adding $40.04 to my annual dividend income. With a yield over 4%, this was too hard to resist. I've been watching CAT for a while and I'm happy to finally pull the trigger.
I now have two small positions in JNJ and CAT, and if prices remain at current levels, I intend to grow both of these over the next few months.

Stock Report: Caterpillar (CAT)

 Caterpillar is well-known in the dividend growth community. I've had CAT on my buy list for a while. I have two concerns: in recent years they've grown dividends at or near double digits. I'm not sure how they can sustain that in the current environment. The stock's been in decline like the rest of the market and a weaker China can pose growth challenges for CAT. But then again they've been doing this for a long time, and are committed to dividends.
The other mark on their record is that they didn't raise dividends in 2009. They kept paying, and didn't cut. This means that in tougher times that may happen again, and makes them not as reliable for growth as some other companies.
A stronger dollar may depress international earnings, but the stronger US economy can offset some of that. I'm looking to add CAT to my portfolio soon. This will be a new position.

Tuesday, September 8, 2015

Stock Report: Verizon (VZ)

Verizon is an interesting dividend company. They have a great track record of growing dividends. They grow slowly but steadily. They've made it through several bad years without missing or stopping growth. Verizon operates mainly subscription based services. I believe subscriptions are a good model, because people tend to stick with them more than one-off purchases, even when times get tough. For example, people on a budget are more likely to keep their mobile phone plan, and will skip going out to dinner to save money. And they'll still watch FiOS TV or use their internet at home. There is heavy competition though, including from themselves. Many people are using their phones for everything, and no longer feel they need TV packages and are cutting the cord. Cutting their home internet isn't far behind if they live in an area with good cell service and speeds. What remains is a mobile data plan, which is a commodity and under heavy competition. Verizon is investing in other types of businesses, including their Hum service for cars, and Go90 for mobile videos.

Verizon has been growing dividends for a good while and at a very manageable pace. They just raised their payout for their upcoming cycle in November. I think there are other companies with better dividend growth and that are on sale right now. Still, keep Verizon in mind for further research. I believe they'll be going to be a good dividend payer for some time to come.

I have a large position in VZ, about 10% of my portfolio. For that reason I do not plan to add to Verizon. I plan to hold on to Verizon as long as they keep paying and growing dividends.

Disclaimer: I own Verizon stock for my dividend portfolio. After my purchase, the company I work for became a wholly owned subsidiary of Verizon. 

How to Spot Sustainable Dividends

When prices drop, dividend yields go up. For if the dividends paid per share do not change, and the share price goes down, you'll get more for your investment dollars.  Example: if you buy a share that pays $5 per share for $100, your yield is 5/100 or 5 percent. If the price drops to $90, the company still pays $5 per share, and you get 5/90 or 5.6%.  The yield went up, but the dividend paid per share stayed the same.
Prices go down for different reasons. If a company does not demonstrate earnings growth, the value of the company does not increase, and hence the stock price should not naturally go up. But price is the perception of a company's value. So if there are rumors or an executive change, that could lead to uncertainty, some investors might not like that and sell the stock. If there are more sellers than buyers, the price goes down.
When the broader market is in a sell-off, we see many stocks lose value. This is no reflection on how well the business is run, or if it's making money. If we truly based stock price on a company's earnings, we should only trade the few days following their earning announcement, when we have real data to work with. Everything else is speculation.
What we do have is historical performance. We can look at how companies performed throughout the ups and downs in the market, even through recessions. You'll find that the stock market goes through stretches of increases and decreases, or bull and bear markets. If you're a value investor this will make you nervous as you'll need to time exactly where the market is in its cycle.  This is of course impossible to know. As a dividend investor, it is much easier to pick a time to buy - each and every day!  Dividend stocks go up and down just like everything else. But companies with a solid dividend strategy tend to manage well through good economic times and bad.
In our screener we use several historic data points to see how companies did in the past. This includes years dividends were paid out, if there were cuts or raises, if dividend growth was consistent, and the dividend growth rate.  If you select companies that perform well against these criteria, you can pick up shares at a discount in a down market. You'll get a better yield for a high quality stock. And you'll still get the comfort of knowing that even if a bear market is about to set in for several years, that your purchase will keep paying out, and that eventually even the price will recover. This is what we call sustainable dividend stocks.

On my short list for further research today: CFR, EMR, AEP, CTWS, JNJ, LNT, MDP, MGEE, NEE, SON, VVC.  I own JNJ and I'm looking to possibly add to my position this month.

Wednesday, September 2, 2015

RY increase

Last week RY announced an increase in their dividend payout by 2 cents, or 3%, from .077 to 0.79 per share. I'm still getting used to the US vs Canadian stock. The numbers above are in Canadian dollars. For US the numbers looks quite different. The recent payout was 0.616, and the new one should be something like 0.60 based on today's exchange rate of the stronger US dollar. 
Long story short, the increase is great, and helps offset currency fluctuations. 

Monday, August 31, 2015

August Dividend Report

This past month set several records for my portfolio.  It's great to see that investment discipline is paying off. I keep investing dividend income and fresh capital each month. I carefully screen for companies with a track record of dividend growth.
  • I received $ 644.14 in dividend income this month. This is not only the best August ever, but also the best month ever.
  • The trailing 12 months paid $ 4,043.42. Crossing into $ 4k territory is great. I work on my expected income, looking forward. But it's good to look back and see what money actually came in.
  • Year to date income is $ 2,902.90, which is already higher than any previous year total!
I had one oversight when I added RY to my portfolio. Being a Canadian business, I had $10.84 foreign tax withheld. I will have to see about getting this back at some point. If you have any tips on how to handle this, please drop me a comment or email.

Plan for September: keep investing. If markets stay down for a bit, I will pick up some great companies at rock bottom prices. I expect September dividends to be around $413.27.

Monday, August 24, 2015

Buy when stocks are discounted

When the whole market drops, long term dividend growth investors rejoice. Many high quality companies will be on sale at 5-10% discounts, often selling at prices we haven't seen in a year, or beyond. If you've done your research and have money ready to go, this is your chance to beef up your portfolio.
Unfortunately, I've just put my monthly allowance into JNJ recently, so I don't have fresh cash available right now. If things stay low I will invest early September.

It is refreshing to talk about a market drop in terms of buy opportunities. Before I was heavy into dividend stocks, I focused on capital gains, and a day like today would be terrible. I suspect it will take some time to recover. For dividend stocks this is great. In fact, I think that those companies that committed to share buy backs are having a ball today. I'm not clear about regulations, but today'd be a great day to buy back shares in large amounts. This in turn is good for earnings per share and hence dividends per share. It allows companies to meet their dividend obligations. For dividend investors it means the dividend and dividend growth is just that much more save.

Of course there are underlying reasons for the market drop. The China situation should not be under-estimated. But it 'feels' like there is no real data to support why some companies dropped in valuation this much in one day. They certainly didn't lose customers or announce bad sales today. So I think the best approach is to keep investing. Average down where possible. Start new positions for those gems that are never on sale. And then watch things recover.

10 Dividend Stock Purchase Criteria

Every investor has their own goals, personality and investment style. Many dividend investors agree on selecting solid companies that will grow dividends for years to come. Still there are unique risk strategies among dividend growth investors as well. I've highlighted some ways that I feel I'm different. For one, I'm not opposed to selecting a few higher yield stocks as a booster to get a portfolio going. Further, my main goal is not to retire early, but instead to augment my income to support my life style and allow me to enjoy certain things in life before retirement.
As such everyone has their own entry and exit criteria for stocks. I enjoy reading how others go about their decisions. Here are the things I look at right now. This collective screener will evolve -- I'm actively tuning it, adding more criteria to look at, and adjusting the values. These are not buy recommendations, merely a starting point for further research. 
I look at the following:

Monday, August 17, 2015

New Position: JNJ

Friday I bought 9 shares of JNJ. This is a new position, and also a new sector, which is good for further diversity in my portfolio.  JNJ is well-known amongst dividend investors. I was torn between JNJ and CAT, with CAT having a much higher current yield, at 4% vs 3% for JNJ. Looking at the longer term growth I believe JNJ has a more sustainable dividend growth story. CAT also faces some short term macro economic head winds in several locations. I will continue to watch CAT, and will consider it for a new position next month.  Next month I will go through the analysis again and see if I should build up my JNJ position, or jump into CAT.

JNJ adds 27 dollars to my expected annual dividend income. Total expected annual income now stands at 4,915.64.

Frugal vs Quality of Life

Several of the dividend bloggers write about their frugal lifestyle. I think they sometimes take it too far. It makes sense to live within your means. What's the point of investing if you keep spending money on stuff you don't need. You'd be better of putting the extra money into your portfolio. Being frugal means that your portfolio returns can covers your expenses sooner, since your expenses are lower than they would be for a non-frugal person. And for many investors that's the goal -- cover expenses with dividends, and retire. For me this is not the case. I love my job, and I love the income it generates. My dividend income is used to build up my portfolio. When it reaches a decent size, then yes, I will use it to cover non-discretionary expenses like mortgage, insurance and utilities. But only if I no longer want to grow the portfolio, which I think I will want for a long time to come.

Monday, August 10, 2015

Two New Div Stocks to Research

Two new stocks popped up on the dividend Inbox this month. Typically the top div stocks stays pretty constant. That makes sense because there's only a few times a year that companies provide a public report card in the form of dividend payments. What a company does with their div payments has a big impact on their score for the screener. Occasionally, when stocks increase or decrease the payout, it affects their score. Also, if a stock has consistently been paying and raising dividends they could pop into the 5 year or 10 year club, increasing their score.
The only other thing that impact the score is the stock price. Lower price and same dividend per share means higher yield.  We also look at the percentage from their 52-week high, which is a sliding window. 52-week high and p/e ratio are quick indicators if a stock is oversold, or overpriced.

This week, two stock popped up on the top scorers list.

Wednesday, August 5, 2015

How to Stay Disciplined About Investing

It is not always easy to keep up with investing. It's all to easy to let the weeks slide by without new activity. Life tends to throw distractions in your way. And forget about distractions. It's the financial setbacks that are perfect excuses to pass on an investment this month. Or getting emotional about the market.
I had a few set backs recently. First, my car didn't pass inspection, and I had to put several hundred dollars into it. This was unplanned, but always a risk when driving a 14-year old car. I'm active starting to look for a replacement. I have money for that set aside in a car fund. But the repair was unplanned.
Then my computer's hard drive stopped working. Not a huge deal, but here also I spend some money to fix it. I was worried I had to buy a new hard drive, and spend time installing everything. Or even look at a new computer as mine is over six years old. Luckily I was able to fix it myself with some tools I bought on Amazon. Geeky details -- search for Seagate 7200.11 BSY fix. Next in line is my wife's laptop. It's probably about 5 years old. While it generally works, the battery is toast, so it has to stay connected to power, and it keeps getting slower. I've been playing with defrag and other optimizations, but perhaps it's time for a new one.
These things all cost money and are mostly unplanned. So it is tempting to skip my investment this month and put it towards these expenses.

Here's how I shake off these distractions:

Friday, July 31, 2015

First Ever July Dividend

It does not matter to me in which month dividends get paid out. I don't rely on the income to pay any bills, I'm just building up my income generating portfolio. My portfolio has happened to never pay out a dividend in July until this month. XEL paid 105.28. I missed out on a payout from CINF because I purchased three days after the ex-div date. We'll catch them next quarter.

With my recent focus on dividend income and growth, I am now within 100 dollars from my full year div income last year. I will continue to put $500 fresh capital in each month, and will reinvest dividend cash. Altogether I expect to invest around $4,000 more into the portfolio this year, barring unforeseen events.

July Div Income:

  • XEL: 105.28
Year to date total: 2,258.76
Trailing 12 months: 3,669.99
Projected next 12 months: 4,916.94


Tuesday, July 28, 2015

ARLP increases dividend

Dividend investors don't get nervous about the market. Low prices mean buying opportunities. Having said that, if a stock you own is in free fall, you do watch it closely. If there are underlying business issues, then the stock could meet your sell criteria and you need to get out. That's not bad, that's just life. If we only picked winners then we'd all be millionaires, right ?   Knowing when to get out is critical. Your next move would be to redeploy that cash in a next buy opportunity. 

Monday, July 27, 2015

Don't Believe the Analysts!

Many people have an opinion about a stock. From your neighbor, to finance bloggers, to entertainers like Jim Cramer, to professional analysts working for large financial firms. "Official" earning expectations are quoted in earning as "Wall Street consensus" and allows companies to 'beat expectations.' I never understood the big deal about missing or beating expectations. Missing your own goals as a company is bad, but who cares what all the analysts say ? As a dividend investor I look for the best signal about a business -- not if they had more earnings per share than the bean counters expected, but if the company pays and raises their dividend when I expect it (based on their track record).

Thursday, July 23, 2015

How to sleep better when the bears rule

In the 2008 market drop many people lost a lot of money. Especially those that panicked and got out of the market. They bought high and sold low. I was worried, but held on to my stocks. Everything bounced back, and then some.

Today, I could really care less about what the market does. I'm invested in solid companies, that have weathered bear markets before. Throughout these markets these companies have continued to pay their shareholders dividends, and even increase the payouts.

Wednesday, July 22, 2015

July Addition

I added 13 shares of RY today at $58.50. This adds $31.49 to my annual dividend income. RY won out over other contenders because it satisfies my entry criteria. It also allows me to average down on my June purchase. I should be just in time for the August dividend payout, as the ex-div date is tomorrow.

Monday, July 20, 2015

14 Dividend Paying Stocks with a Solid Track Record

Unlike stocks only purchased for capital gains, dividend stocks have many extra data points to examine before purchasing. What is the yield ? Has this company been paying out consistently, even through recessions ? Have they been raising dividend per share ?  What is the payout ratio ?  When did they last cut the dividend or miss a payment ?  The Active Passive Screener looks at all these data points, and assigns a score to each stock on the list. We take the top scorers for further investigation. The group of top scorers can vary from month to month or week to week depending on the stock price fluctuation and how that affects the yield. And the company's actions around dividend will heavily influence the score -- cut dividend and scores drop.

Today's top scorers are listed below. These are not buy recommendations. This are merely stocks to investigate further and see if they meet entry criteria.

Living and Saving

I had an uncle who lived a good and frugal live. Didn't do crazy stuff, saved up for a nice early retirement. Even did some consulting at the start of his retirement. Ready to really settle down, enjoy the golden years, play with the grand kids. Three months later he died from pancreatic cancer.

What I take from this is to never forget to enjoy life. I'm frugal by nature, and very disciplined when it comes to investing. But at the same time, I make sure my family and I do the things we enjoy, even if they are costly. Sometimes these things make my financial heart cringe. But the emotional return on investment are memories that my kids will carry for the rest of their lives. So we do the 500+ dollar per day ski trips. We do the swim with the dolphin adventures. We don't go crazy -- there are limits. We will take the cheaper flight at the odd time with the lay-over. We'll take the hotel or room that's a bit farther from things or not as big. So we balance the finances out with the experiences.

Friday, July 17, 2015

Watch List July

On July 20, I expect about $105 from XEL, and that will wrap up my July dividend income. With my $500 fresh capital, the first $65 from CINF this week, and some payouts late June, I expect to have about 840 dollars to invest. I don't try to time the market, and I plan to invest this next week.
I am probably going to add to an existing position, as some dropped significantly and I will use it to average down.
I will avoid three of my stocks that are on the warning list -- ARLP because of its price dive, CVX and TAL because they paid the same dividend five times in a row and thus didn't raise yet. I have a few others that are meeting entry criteria, so I will look at those. I will still review new positions as well, where I have my eye on CAT.

Tuesday, July 14, 2015

When to sell dividend stocks

ARLP's stock price has been in decline for several months now. I have a decent position and even 'averaged down' a while back. I anxiously awaited the company's latest dividend announcement. If there were any troubles with the business, I figured they would not pay or cut their dividends. But they paid right on schedule. So I am holding on to the stock for now.  I will not add to the position until it meets my entry criteria.

Monday, July 6, 2015

Dividend Goals

One of the many benefits of a dividend growth portfolio is that it is relatively predictable. Looking at the dividend schedule, and other money I expect to invest, I came up with dividend income goals for the next 15 years.  The danger of a goal is to become blindsided and just chase yields. But with the screener and discipline in place, I only invest in good quality businesses.

Let's look at the goals and how I plan to get there.

Monday, June 29, 2015

Building Up a Dividend Portfolio

One of the reasons I called this blog Active Passive Money, is to contrast with others that just talk about passive income. I believe that to build this passive income portfolio, you will need to actively work for it. And when you're just starting out, you have little capital to deploy. You can put it in a conservative growth stock, solid and safe. Or you can put your money into a higher yielder. Still a solid business but with a bit more risk. Perhaps they have a higher payout ratio, or shorter growth track record. Or perhaps their earnings aren't growing as fast as their dividends. The question is, how long before they run out of gas ?  So here's what I did.

Monday, June 22, 2015

Two new additions

I mentioned last week that I was hunting around for new additions to my portfolio after I got a windfall. I bought the following:

  • 135 shares of CINF 
  • 111 shares of RY
Note that I don't buy shares in round numbers. I simply allocate a certain amount of money, and then buy as many shares as fit in that amount.

These two add about $528 to my annual dividend income, and made me reach my goal for the year six months ahead of schedule!  Of course, it's all because of a one-time deal, but still.

Friday, June 19, 2015

New investment round

The company I work for is being acquired, and as a result our stock price went up. I try not to put too many eggs in one basket, so I don't keep too much stock of the company that I work for. I figure that if things go bad with the company, I might be out of a job and have worthless stock. Better to keep investments elsewhere.
Still, I held on to some shares just to feel like a shareholder at work, which actually helps sometimes when you need another perspective on budgets. With the stock jump, I decided to sell everything, and as a result I'm sitting on a sizable amount of cash that I'm planning to deploy in the next few days. The money just cleared in my brokerage account.
Here are the stocks that I'm currently watching.

Thursday, June 18, 2015

What to do with rate news and Greece

It seems like every month there is another macro-economic event that you have to worry about. Earlier in the year oil prices suddenly dropped dramatically, which impacted oil related stocks like CVX, COP, XOM.
Also in the news is another round of concerns about the Greek debt. In the past this always seems to stir up a lot of fear and uncertainty, and usually countries jump in at the last minute to save the day.
Lastly, there is always speculation around interest rates. For years it was the quantitative easing. Then the fed slowly pulling out of the program. And now the focus is on the timing of raising the interest rate.
So what's an investor to do? We can't time the market. But with this cloud hanging over our heads should we wait before we invest more ?  Maybe next week the Greece debt crisis will be over. Maybe the Fed will announce when they will raise rates. Maybe oil will bounce back.  Each of these events could seriously impact the market. If I buy more stocks now, and tomorrow news comes out, I could have bought at an unfavorable price.
While all that is true, I believe that it's best to put money to work now. If the entry criteria for a stock are good, then simply buy it. Don't wait. While some uncertainty could be taken away tomorrow, it is also possible that more uncertainty can come up. Maybe an attack somewhere, a major hurricane, or simply bad economic news. Again, if you focus on companies that have weathered down-turns and have solid fundamentals, then the entry price should not be a big concern. I add companies that I expect will pay me a growing amount of dividends for many years to come. And while I try not to buy them at their 52-week high, I also try to not keep money on the sidelines for too long.
Remember: the best time to plant a tree was 30 years ago, the next best time is to plant it today.