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.