On the third Saturday after each quarter-end I review my asset allocation and year-to-date total returns by category. The attached PDF contains my actual asset allocation as of 2008-Q4.Asset Allocation
There are three areas that I am focusing on from an asset allocation perspective.
I. Employer/Company Stock
As discussed in the previous reviews and in "My Dirty Little Secret", I am way over-allocated in my employer's company stock. On December 31st my company stock holdings made up 36.6% of my total portfolio compared to 40.8% on September 30th and a target allocation of 40.0%. The decrease primarily resulted from a drop in my employer's share price, along with a the sale of a sizable block during the quarter. My next trading window will open in February and my new target allocation then will be 38.75% at that time.
II. International Holdings
I increased my international holdings from 11.2% to 12.1% vs. a target of 20%. As discussed in "International ETF Dividend Investing", I hope to accelerate this allocation by continuing to purchase International ETFs for inclusion in my Income ETF portfolio. The above increase was a result of a reallocation in my 401(k) plan.
III. Financial Holdings
With the continued drop in financials, my allocation in financials fell from 9.7% last quarter to 9.1%, which is below my target of 10%. This is compared to a 15% maximum. Given the current uncertainty surrounding the ability to sustain dividends by institutions participating in the TARP program, I have limited my purchases in this sector.2008-Q4 Performance
Like the market in general, the fourth quarter was not kind to my portfolio. Below are the YTD performances of various categories along with my S&P 500 benchmark (VFINX):
I am pleased that each category, except mutual funds, is equal to or ahead of my benchmark. However, I am looking to beat the S&P over the long-run, so I don't pay a lot of attention to short-term performance either positive or negative.
The continued under-performance of mutual funds, ETFs and CEFs compared to individual stocks, has led me to no longer target a specific allocation by type of investment. I will continue to allocate my investment based origin, capitalization and sector as noted in the above-linked PDF file.Passive Income
For Q4/2008 my passive income averaged $1,058/month, up from the $835/month in Q3. The increase related to several securities that pay an annual dividend in the fourth quarter, offset by lower interest income. This amount includes all sources of passive income in my taxable accounts, primarily interest and dividends. It excludes my Roth IRA, 401(k) and blog income (which is not passive).
The next update will be on Saturday April 18th. Thanks for reading!
(Photo: sanja gjenero)
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On the second or third Saturday of the month I update the Pocket Change Portfolio (PCP). The table below reconciles the PCP from beginning of period to end of period for December 2008, Year-To-Date (2008) and Life-To-Date. The Portfolio Returns line provides the calculated return for the three displayed periods. Description Dec-2008 Year-To-Date Life-To-Date Beg. Portfolio Value 2,765.38 - - Online Cash Receipts 677.54 3,548.35 3,548.35 Online Expenses (74.40) (94.40) (94.40) Gross Profit 603.14 3,453.95 3,453.95 Dividends 25.16 25.16 25.16 Interest Income 1.74 6.15 6.15 Subtotal 630.04 3,485.26 3,485.26 Gain/(Loss) 0.20 (89.64) (89.64) Ending Portfolio Value 3,395.62 3,395.62 3,395.62 Portfolio Returns 0.80% (7.30%) (7.30%)
Online Cash Receipts are the collected earnings from my online endeavors. Most of which is advertising on the my various blogs. The $94.40 Online Expenses relates to registering 2 domains (dividends4life.com and thediv-net.com) for $20 and $74.40 for one years hosting. I am in the process of moving my blogs from Blogger to a self-hosted WordPress platform. The Dividends line is for dividends earned in the PCP. The Interest Income line is interest earned on cash balances in an ING account I set up for the PCP. The Gain/(Loss) line is for market changes to the PCP (realized and unrealized).
During the month of December, I received a $16.80 dividend from BP and an $8.36 dividend from KO. I ended 2008 with $1,464.88 in cash. This will allow me to purchase my third stock in the PCP during the month of January. It is my goal to have sufficient earnings to purchase a stock at least once a quarter.
My PCP holdings are always available by selecting the Holdings option from the menu in the header. The next PCP update will be in early February.
(Photo: sanja gjenero)
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The decrease in MFC was due to currency conversion resulting from a strengthening U.S. dollar compared to the Canadian dollar. The TEG change corrects an errant share amount entered into my spreadsheet.
Once again it is time for a goals/progress update. December finally provided some relief from a dividend cut standpoint. My only cuts were in ETFs/CEFs and resulting from currency conversions. This allowed me to lower my exposure to high-yield and high risk securities. I am pleased to say that my annualized dividend income increased for the month, keeping alive the string of 13 consecutive months of increases dating back to December 2007 when I began tracking it. 2009 will be a challenge to keep the string going. I anticipate additional dividend cuts in the near-term.
My goals were defined in this December 1, 2007 Investing Goals post. I am pleased to note that both of my goals were achieved in 2008 - not may investors can say that. Below is an updated version of the table found in the original post.Description Dividend
Income
AnnualizedYield
on Cost2027 Goal 110,000 20.00% 2017 Goal 30,000 10.00% 2008 Goal 4,000 4.90% December/2007 3,054 5.00% Purchases YTD 4,424 0.91% Div. Changes YTD (47) -0.01% Sales YTD (1,795) -0.62% December/2008 5,636 5.28% Purchases 237 -0.10% Div. Changes (75) -0.07% Sales (108) -0.06% November/2008 5,582 5.51%
The above information covers the current month and year-to-date through the current month.
Click here for a Detailed Historical Progress Table.
For the month, annualized dividend income increased $54, and Yield on Cost (YOC) decreased -0.23%. These changes were driven by new purchases, dividend changes and sales. Let's examine each of the these categories:
Purchases: The $237 increase in annual dividend income and -0.10% increase in YOC related to the following purchases (yield at the time of purchase):
As a result of my focus on quality and lowering my portfolios risk, all the above purchases lowered my YOC. As noted in earlier updates, I generally expect YOC to drop each month since most new investments will yield less than my current YOC, and dividend increases will not be sufficient to offset it.
Dividend Changes: The ($75) decrease in annual dividend income and (0.07%) decrease in YOC related to the following dividend changes (a=dividend stated in annual terms, q=quarterly, m=monthly):
As previously discussed, I am over-allocated in AOD and ETO from a dividend income standpoint. Over the next several months I plan to reduce my allocation in each by selectively selling a portion of my holdings. This will position me to better withstand a dividend cut from them.
That's it for this time. The next monthly progress update will be on Saturday, February 7th.
(Photo: sanja gjenero)
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My goals were originally defined in this December 1, 2007 Investing Goals post. Short of a cataclysmic melt-down, I should greatly exceed by 2008 goals. In addition, I am well on track to reach my 2017 and 2027 goals, as such, I will leave them unchanged. Now, what to do with my 2009 goal?
The financial environment we are operating in certainly adds complexity to setting a reasonable 2009 investment goal. October and November brought a rash of dividend cuts, and I don't think the carnage is over yet. As I will explore in a later article, I have compensated by taking on additional risk, leaving little additional room to withstand significant dividend cuts in the future. I am hoping to get through December with only marginal dividend cuts. However, the majority of the ETFs and CEFs that I hold will not declare until next week. I anticipate that they will continue to trend down, as they have over the last several quarters.
Looking to 2009, I anticipate it will be as bad and probably worse than 2008. It will be a challenge to prevail in this environment. In the upcoming year, I anticipate high volatility in the market, with a general trend downward. On the positive side, this will provide continued opportunities to pick up world class stocks at bargain basement prices. It will also expose the world class pretenders through dividend cuts and significant share price declines. With that as a backdrop here are my revised goals going into 2009:Description Dividend
Income
AnnualizedYield
on Cost2027 Goal 110,000 20.00% 2017 Goal 30,000 10.00% 2009 Goal 8,000 5.00%
As noted above, the 2027 and 2017 goals are unchanged. In setting the 2009 annualized dividend income at $8,000, I considered what happened in 2008, with special attention to the last 4 months. To achieve the $8,000 of annualized dividend income, the overall rate of growth will be less than what was enjoyed in 2008. The 2009 yield on cost of 5.00% will likely be lower than where I ended 2008. Both of these will be influenced by my need to reduce the risk in my portfolio during the first half of the year and/or suffer significant dividend cuts.
I am confident that I will finish the year with higher annualized dividend income than where 2008 ended. Unfortunately, I am not confident that my string of sequential months of higher annualized dividend income will survive through 2009.
If it were easy, everyone would do it and success wouldn't be nearly as satisfying. Here's to an exciting 2009!
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On the second or third Saturday of the month I update the Pocket Change Portfolio (PCP). The table below reconciles the PCP from beginning of period to end of period for November 2008, Year-To-Date (2008) and Life-To-Date. Obviously, Year-To-Date and Life-To-Date will be the same for the remainder of 2008. The Portfolio Returns line provides the calculated return for the three displayed periods. Description Nov-2008 Year-To-Date Life-To-Date Beg. Portfolio Value 2,246.47 - - Online Cash Receipts 515.44 2,870.81 2,870.81 Online Expenses - (20.00) (20.00) Gross Profit 515.44 2,850.81 2,850.81 Dividend Income - - - Interest Income 0.81 4.41 4.41 Subtotal 516.25 2,855.22 2,855.22 Gain/(Loss) 2.66 (89.84) (89.84) Ending Portfolio Value 2,765.38 2,765.38 2,765.38 Portfolio Returns 0.1% (4.9%) (4.9%)
Online Cash Receipts are the collected earnings from my online endeavors. Most of which is advertising on the my various blogs. The $20 Online Expenses relate to registering 2 domains (dividends4life.com and thediv-net.com). Since I host on Blogger, this line should see minimal activity. The Dividends line is for dividends earned in the PCP. The Interest Income line is interest earned on cash balances in an ING account I set up for the PCP. The Gain/(Loss) line is for market changes to the PCP (realized and unrealized).
During the month of November I purchased 22 shares of KO at $46.27/share and charged the portfolio a commission of $4.50. The KO stock will provide me $33.44 in annual income, bringing the PCP's total annual dividend income to $100.64. Now that the portfolio has exceed $2,500, it is eligible for 10 free trades a month.
With over $700 in cash, this will allow me to purchase my third stock in the PCP during the month of January. It is my goal to have sufficient earnings to purchase a stock at least once a quarter.
My PCP holdings are always available by selecting the Holdings option from the menu in the header. The next PCP update will be in early January.
(Photo: sanja gjenero)
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The decrease in RY was due to currency conversion resulting from a strengthening U.S. dollar compared to the Canadian dollar.Once again it is time for a goals/progress update. November brought more dividend cuts, but I am pleased to say that my annualized dividend income still managed to eek out an increase for the month. This kept alive the string of 12 consecutive months of increases dating back to December 2007 when I began tracking it. December 2008 could be a challenge to keep the string going. Several stocks that I hold could eventually cut their dividend.
My goals were defined in this December 1, 2007 Investing Goals post. Below is an updated version of the table found in the original post.Description Dividend
Income
AnnualizedYield
on Cost2027 Goal 110,000 20.00% 2017 Goal 30,000 10.00% 2008 Goal 4,000 4.90% December/2007 3,054 5.00% Purchases YTD 4,187 1.01% Div. Changes YTD 28 0.06% Sales YTD (1,687) -0.56% November/2008 5,582 5.51% Purchases 951 0.46% Div. Changes (18) -0.02% Sales (843) -0.31% October/2008 5,492 5.38%
The above information covers the current month and year-to-date through the current month.
Click here for a Detailed Historical Progress Table.
For the month, annualized dividend income increased $90, and Yield on Cost (YOC) increased 0.13%. These changes were driven by new purchases, dividend changes and sales. Let's examine each of the these categories:
Purchases: The $951 increase in annual dividend income and 0.46% increase in YOC related to the following purchases (yield at the time of purchase):
In November, I had higher than normal funds to invest due to the sale of the two stocks described below. All the above purchases, except CAT and KO increased my YOC. As noted in earlier updates, I generally expect YOC to drop each month since most new investments will yield less than my current YOC, and dividend increases will not be sufficient to offset it.
Since both of the securities sold were in my risky category, I was comfortable spreading the funds over several risky investments (CTL, NNN, VNQ and ETO).
Dividend Changes: The ($18) decrease in annual dividend income and (0.02%) decrease in YOC related to the following dividend changes (a=dividend stated in annual terms, q=quarterly, m=monthly):
That's it for this time. The next monthly progress update will be on Saturday, January 3rd. On Saturday December 27th, I plan to update my goals including a goal for 2009.
(Photo: sanja gjenero)
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On the second or third Saturday of the month I update the Pocket Change Portfolio (PCP). The table below reconciles the PCP from beginning of period to end of period for October 2008, Year-To-Date (2008) and Life-To-Date. Obviously, Year-To-Date and Life-To-Date will be the same for the remainder of 2008. The Portfolio Returns line provides the calculated return for the three displayed periods. Description Oct-2008 Year-To-Date Life-To-Date Beg. Portfolio Value 1,506.71 - - Online Cash Receipts 748.05 2,355.37 2,355.37 Online Expenses - (20.00) (20.00) Gross Profit 748.05 2,335.37 2,335.37 Dividends - - - Interest Income 1.11 3.60 3.60 Subtotal 749.16 2,338.97 2,338.97 Gain/(Loss) (9.40) (92.50) (92.50) Ending Portfolio Value 2,246.47 2,246.47 2,246.47 Portfolio Returns (0.4%) 0.0% 0.0%
Online Cash Receipts relates to all earnings generated online. Most of which is advertising on the my various blogs. The $20 Online Expenses relate to registering 2 domains (dividends4life.com and thediv-net.com). Since I host on Blogger, this line should see minimal activity. The Dividends line is for dividends earned in the PCP. The Interest Income line is interest earned on cash balances in an ING account I set up for the PCP. The Gain/(Loss) line is for market changes to the PCP (realized and unrealized).
During the month of October I had several one-time direct sale ads. This will allow me to purchase my second stock in the PCP during the month of November. It is my goal to have sufficient earnings to purchase a stock at least once a quarter. At the end of October I had $1,252.47 in cash. After purchasing a stock in November, the $200+ remaining will go toward purchasing another stock in Q1/2009.
My PCP holdings are always available by selecting the Holdings option from the menu in the header.
(Photo: sanja gjenero)
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I continue to be unhappy with the performance of the income ETFs. The dividends tend to be volatile and unpredictable, which is not what a dividend investor is looking for.Once again it is time for a goals/progress update. With several dividend cuts in October, I am pleased to say that my annualized dividend income still managed to eek out an increase for the month. This kept alive the string of consecutive months of increases dating back to November 2007 when I began tracking it. November 2008 will be a challenge to keep the string going as, I have already experienced one dividend cut. I am well ahead of my 2008 goal; thus, it is unlikely I will fall below it.
My goals were defined in this December 1, 2007 Investing Goals post. Below is an updated version of the table found in the original post.Description Dividend
Income
AnnualizedYield
on Cost2027 Goal 110,000 20.00% 2017 Goal 30,000 10.00% 2008 Goal 4,000 4.90% Dec/2007 3,054 5.00% Purchases YTD 3,236 0.55% Div. Changes YTD 46 0.08% Sales YTD (844) -0.25% October/2008 5,492 5.38% Purchases 850 0.37% Div. Changes 25 0.03% Sales (724) -0.31% September/2008 5,341 5.29%
The above information covers the current month and year-to-date through the current month.
Click here for a Detailed Historical Progress Update Table.
For the month, annualized dividend income increased $151, and Yield on Cost (YOC) increased 0.09%. These changes were driven by new purchases, dividend changes and sales. Let's examine each of the these categories:
Purchases: The $850 increase in annual dividend income and 0.37% increase in YOC related to the following purchases (yield at the time of purchase):
I had higher than normal funds to invest in October due to the sale of the three stocks described below and the third month of a quarter provides the highest dividends in my portfolio. All the above purchases, except BP and AOD lowered my YOC. As noted in earlier updates, I generally expect YOC to drop each month since most new investments will yield less than my current YOC, and dividend increases will not be sufficient to offset it.
Since some of the securities sold were in my risky category, I was comfortable taking a calculated risk on one of the securities. The AOD purchase was opportunistic. I fully expect a future dividend cut, but on the day I bought it, I believed the closed-end fund was trading at a significant discount to the underlying securities. Since I purchased it about a month ago, it is up around 35% in this tough market. Combine that with its previously declared forth quarter dividend (37.05% yield), AOD has the potential to be quite profitable.
Dividend Changes: The $25 increase in annual dividend income and 0.03% increase in YOC related to the following dividend changes (a=dividend stated in annual terms, q=quarterly, m=monthly):
That's it for this time. The next monthly progress update will be on Saturday, December 6th.
(Photo: sanja gjenero)
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On the second Saturday after each quarter-end I review my asset allocation and year-to-date total returns by category. The attached PDF contains my actual asset allocation as of 2008-Q3 (alt.1, alt.2).Asset Allocation
There are three areas that I am focusing on from an asset allocation perspective.
I. Employer/Company Stock
As discussed in the previous reviews and in "My Dirty Little Secret", I am way over-allocated in my employer's company stock. On June 30th, my company stock holdings made up 32.1% of my total portfolio, and as of September 30, 2008 that amount was up to 40.8% vs. a target allocation of 41.25%. The increase was a result of a run up in my employer's share price. This sharp increase allowed me to sell a sizable block near the quarter's high. My next trading window will open in early November and my new target allocation then will be 40.0% at that time.
II. International Holdings
I increased my international holdings from 9.9% to 11.2% vs. a target of 20%. As discussed in "International ETF Dividend Investing", I hope to accelerate this allocation by continuing to purchase International ETFs for inclusion in my Income ETF portfolio. With the rapid decrease in international markets, I lost ground during the quarter. The above increase was a result of a reallocation in my 401(k) plan.
III. Financial Holdings
With the the financials leading the way in the recent pullback, my allocation in financials at 9.7% is below 10% for the first time. This is compared to a 15% maximum. It will be interesting to see how this shakes out in Q4 with my recent sale of Bank of America (BAC).
As noted under target allocations in the attached PDF, I am over-allocated in mutual funds, under-allocated in in ETFs and slightly over-allocated in income stocks. I will not sell securities for allocation purposes, but will bring this in line with future purchases.2008-Q3 Performance
During the quarter, my income stocks had a good run while my mutual funds and asset allocation portfolio took a turn for the worse. Below are the YTD performances of various categories along with my S&P 500 benchmark (VFINX):
I am pleased that each category, except mutual funds, is equal to or ahead of my benchmark. However, I am looking to beat the S&P over the long-run, so I don't pay a lot of attention to short-term performance either positive or negative.Passive Income
For Q3/2008 my passive income averaged $835/month, down from the $877/month in Q2. The decrease related to lower interest income and dividend cuts in my non-income portfolios. This amount includes all sources of passive income in my taxable accounts, primarily interest and dividends. It excludes my Roth IRA, 401(k) and blog income (which is not passive).
The next update will be on Saturday January 17th.
(Photo: sanja gjenero)
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On the second Saturday of the month I will update the Pocket Change Portfolio (PCP). The table below reconciles from beginning of period to end of period the PCP for September 2008, Year-To-Date (2008) and Life-To-Date. Obviously, Year-To-Date and Life-To-Date will be the same for the remainder of the year. The Portfolio Returns line provides the calculated return for the three displayed periods. Description Sep-2008 Year-To-Date Life-To-Date Beg. Portfolio Value 1,120.27 - - Online Cash Receipts 469.33 1,607.32 1,607.32 Online Expenses - (20.00) (20.00) Gross Profit 469.33 1,587.32 1,587.32 Dividends - - - Interest Income 0.21 2.49 2.49 Subtotal 469.54 1,589.81 1,589.81 Gain/(Loss) (83.10) (83.10) (83.10) Ending Portfolio Value 1,506.71 1,506.71 1,506.71 Portfolio Returns (5.2%) 0.00% 0.00%
Online Cash Receipts relates to all earnings generated online. Most of which is advertising on the my various blogs. The $20 Online Expenses relate to registering 2 domains (dividends4life.com and thediv-net.com). Since I host on Blogger, this line should see minimal activity. The Dividends line is for dividends earned in the PCP. The Interest Income line is interest earned on cash balances in an ING account I set up for the PCP. The Gain/(Loss) line is for market changes to the PCP (realized and unrealized).
As previously mentioned, during the month of September I purchased 20 shares of BP at $54.10/share and charged the portfolio a commission of $4.50. The BP stock will provide me $69.60 in annual income.
It is my goal to have sufficient earnings to purchase a stock in the last month of each quarter. I currently have $503.31 in cash, so my goal of purchasing an additional stock in December is obtainable.
My PCP holdings are always available by selecting the Holdings option from the menu in the header.
(Photo: sanja gjenero)
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I continue to be unhappy with the performance of the income ETFs. The dividends tend to be volatile and unpredictable, which is not what a dividend investor is looking for.Once again it is the first Saturday of the month, so it is time for a goals/progress update. I am pleased that I can continue to say that annualized dividend income has increased every month since I began tracking it in November 2007. I have one stock that I am certain will either cut or eliminate its dividend in October. I will likely sell it in the next few days and reinvest the proceeds. As noted in past reports, since I am well ahead of my 2008 goal it is unlikely I will fall below it.
My goals were defined in this December 1, 2007 Investing Goals post. Below is an updated version of the table found in the original post.Description Dividend
Income
AnnualizedYield
on Cost2027 Goal 110,000 20.00% 2017 Goal 30,000 10.00% 2008 Goal 4,000 4.90% Dec/2007 3,054 5.00% Purchases YTD 2,386 0.18% Div. Changes YTD 21 0.05% Sales YTD (120) 0.06% September/2008 5,341 5.29% Purchases 165 -0.06% Div. Changes (35) -0.03% Sales 0 0.00% August/2008 5,211 5.38%
The above information covers the current month and year-to-date through the current month.
Click here for a Detailed Historical Progress Update Table.
For the month, annualized dividend income increased $130, and Yield on Cost (YOC) decreased -0.09%. These changes were driven by new purchases and dividend changes (no sales in September). Let's examine each of the these categories:
Purchases: The $165 increase in annual dividend income and -0.06% decrease in YOC related to the following purchases (yield at the time of purchase):
The BP purchase increased my YOC, while the PG and PID purchases lowered it. As noted in earlier updates, I expect for most months YOC to drop since most new investments will yield less than my current YOC, and dividend increases will not be sufficient to offset it.
Dividend Changes: The ($35) decrease in annual dividend income and (0.03%) decrease in YOC related to the following dividend changes (a=dividend stated in annual terms, q=quarterly, m=monthly):
The next monthly progress update will be on Saturday, November 8th (I will likely not be ready on November 1st).
(Photo: sanja gjenero)
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As noted in my September 13, 2008 article Pocket Change Portfolio (PCP), my collected online earnings exceeded $1,000 in August. The table below reconciles from beginning of period to end of period the PCP for August 2008, Year-To-Date (2008) and Life-To-Date. Obviously, Year-To-Date and Life-To-Date will be the same for the remainder of the year. The Portfolio Returns line provides the calculated return for the three displayed periods.
Online Cash Receipts relates to all earnings generated online. Most of which is advertising on the my various blogs. The $20 Online Expenses relate to registering 2 domains (dividends4life.com and thediv-net.com). Since I host on Blogger, this line should see minimal activity. The Dividends line is for dividends earned in the PCP. The Interest Income line is interest earned on cash balances in an ING account I set up for the PCP. The Gain/(Loss) line is for market changes to the PCP (realized and unrealized).
During the month of September I purchased 20 shares of BP at $54.10/share and charged the portfolio a commission of $4.50. The BP stock will provide me $69.60 in annual income. Normally, I would wait until the month after to report stock purchases. However, I wanted to set up the the PCP stock holdings page before things got crazy at work (Q3 reporting in October).
It is my plan to provide monthly updates, unless the change is not relevant. I hope to have sufficient earnings to purchase my next stock in 3-4 months.
My PCP holdings are always available by selecting the Holdings option from the menu in the header.
(Photo: sanja gjenero)
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The decrease in RY related to currency conversion from Canadian dollars to U.S. dollars. You can't fault the company for that. Year over year, I still anticipate RY's dividend will increase on a U.S. dollar basis.Once again it is the first Saturday of the month, so it is time for a goals/progress update. My dividend portfolio continued to improve in August after the June collapse. Annualized dividend income has increased every month since I began tracking it in November 2007. I am still concerned about some stocks reducing their dividend. However, since I am well ahead of my 2008 goal it is unlikely I will fall below it. Now onto the numbers.
My goals were defined in this December 1, 2007 Investing Goals post. Below is an updated version of the table found in the original post.Description Dividend
Income
AnnualizedYield
on Cost2027 Goal 110,000 20.00% 2017 Goal 30,000 10.00% 2008 Goal 4,000 4.90% Dec/2007 3,054 5.00% Purchases YTD 2,221 0.24% Div. Changes YTD 56 0.08% Sales YTD (120) 0.06% August/2008 5,211 5.38% Purchases 299 0.07% Div. Changes 0 0.00% Sales 0 0.00% July/2008 4,912 5.31%
The above information covers the current month and year-to-date through the current month.
Click here for a Detailed Historical Progress Update Table.
For the month, annualized dividend income increased $299, and Yield on Cost (YOC) increased 0.07%. These changes were driven by new purchases and dividend changes (no sales in August). Let's examine each of the these categories:
Purchases: The $299 increase in annual dividend income and 0.07% increase in YOC related to the following purchases (yield at the time of purchase):
The ETO and BBT purchases increased my YOC, while the GE purchase lowered it. As noted in earlier updates, I expect for most months YOC to drop since most new investments will yield less than my current YOC, and dividend increases will not be sufficient to offset it.
Dividend Changes: The $0 net change in annual dividend income and 0.00% net change in YOC related to the following dividend changes (a=dividend stated in annual terms, q=quarterly, m=monthly):
The next monthly progress update will be on Saturday, October 4th.
(Photo: sanja gjenero)
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The decrease in CNI related to currency conversion from Canadian dollars to U.S. dollars. You can't fault the company for that. Year over year, I still anticipate CNI's dividend will increase on a U.S. dollar basis.Once again it is the first Saturday of the month, so it is time for a goals/progress update. Like June, July left me glad that I am a dividend investor. Annualized dividend income has increased every month since I began tracking it in November 2007. It is good that I am running well ahead of my 2008 goal because I am beginning to sense a few dividend cuts coming down the pipe. At this point, it would take a major melt-down for me not to meet my goal. Now onto the numbers.
My goals were defined in this December 1, 2007 Investing Goals post. Below is an updated version of the table found in the original post.Description Dividend
Income
AnnualizedYield
on Cost2027 Goal 110,000 20.00% 2017 Goal 30,000 10.00% 2008 Goal 4,000 4.90% Dec/2007 3,054 5.00% Purchases YTD 1,922 0.17% Div. Changes YTD 56 0.08% Sales YTD (120) 0.06% July/2008 4,912 5.31% Purchases 175 -0.05% Div. Changes 6 0.01% Sales 0 0.00% June/2008 4,731 5.35% Net Changes 101 -0.12% May/2008 4,630 5.47% Net Changes 424 0.27% April/2008 4,206 5.20% Net Changes 188 -0.06% March/2008 4,018 5.26% Net Changes 461 0.13% February/2008 3,557 5.13% Net Changes 277 0.14% January/2008 3,280 4.99% Net Changes 226 -0.01% December/2007 3,054 5.00% Net Changes 228 0.12% November/2007 2,826 4.88%
For the month, annualized dividend income increased $181, and Yield on Cost (YOC) decreased -0.04%. These changes were driven by new purchases and dividend changes (no sales in July). Let's examine each of the these categories:
Purchases: The $175 increase in annual dividend income and -0.05% decrease in YOC related to the following purchases (yield at the time of purchase):
The ETO purchase inreased my YOC, while the other three purchases lowered it. As noted in earlier updates, I expect YOC to drop monthly since most new investments will yield less than my current YOC, and dividend increases will not be sufficient to offset it.
Dividend Changes: The $6 increase in annual dividend income and 0.01% increase in YOC related to the following dividend changes (a=dividend stated in annual terms, q=quarterly, m=monthly):
The next monthly progress update will be on Saturday, September 6th.
(Photo: sanja gjenero)
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On the second Saturday after each quarter-end I review my asset allocation and year-to-date total returns by category. The attached PDF contains my actual asset allocation as of 2008-Q2 (alt.1).Asset Allocation
There are three areas that I am focusing on from an asset allocation perspective.
I. Employer/Company Stock
As discussed in the 2008-Q1 Progress Review and in "My Dirty Little Secret", I am way over-allocated in my employer's company stock. On May 31st, my company stock holdings made up 39.7% of my total portfolio, and as of June 30, 2008 that amount was down to 32.1%. The good news is I sold a sizable block near the quarter's high. The bad news is I still hold significant position and the stock dropped 28% from where I had sold it. The drop in my company's stock helped me to experience my largest single day loss.
II. International Holdings
This was a bright spot. I increase my international holdings to 9.9% from 8.0%. My initial target is 20%. As discussed in "International ETF Dividend Investing", I hope to accelerate this allocation by identifying and purchasing an International ETF for inclusion in my Income ETF portfolio.
III. Financial Holdings
Have you ever been on a diet where you showed self-discipline, limited your calorie intake and exercised everyday, then got on the scales to find you hadn't lost any weight. That's how I feel with my efforts to reduce my financial allocation to 10%. Against all my inner desires, I didn't buy any individual financial stocks during the quarter, but my allocation in financials stayed flat at 10.8%. I am working on a strategy that will hopefully allow some relief in this area.
As noted under target allocations in the attached PDF, I am over-allocated in mutual funds, under-allocated in in ETFs and slightly under-allocated in income stocks. Progress was made in each of these categories. I will not sell securities for allocation purposes, but will bring this in line with future purchases.2008-Q2 Performance
As I noted in last Saturday's post, the second quarter was dismal from a total return standpoint. Below are the YTD performances of various categories along with my S&P 500 benchmark (VFINX):
I am pleased that each category is equal to or ahead of my benchmark. However, I am looking to beat the S&P over the long-run, so I don't pay a lot of attention to short-term performance either positive or negative.Passive Income
For Q2/2008 my passive income averaged $877/month, up from the $663/month in Q1. This amount includes all sources of passive income in my taxable accounts, primarily interest and dividends. It excludes my Roth IRA, 401(k) and blog income (which is not passive).
The next update will be on Saturday October 11th.
(Photo: sanja gjenero)
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The erratic ETF dividends continue to be problematic. I have opted to convert to a trailing 12-month convention for measurement. Some of the above decreases related to my conversion, while others are true year-over-year decreases in dividends. I am making some other changes in my ETFs which I will discuss in a later post.It is the first Saturday of the month, so it is time for a goals/progress update. A month like June makes you appreciate being a dividend investor. While other investors are focusing on their market losses and negative total returns, I and other dividend investors are able to look at net positive metrics such as an increase in annual dividend income. That's not to imply that we escaped the losses (I didn't as I will discuss next Saturday), but the day-to-day gyrations of the market is not how we measure success. Instead, our goal is steadily build a stream of dividend income over the years. To that end, progress was made in June. Now onto the numbers.
My goals were defined in this December 1, 2007 Investing Goals post. Below is an updated version of the table found in the original post.Description Dividend
Income
AnnualizedYield
on Cost2027 Goal 110,000 20.00% 2017 Goal 30,000 10.00% 2008 Goal 4,000 4.90% Dec/2007 3,054 5.00% Purchases YTD 1,747 0.22% Div. Changes YTD 50 0.07% Sales YTD (120) 0.06% June/2008 4,731 5.35% Purchases 133 -0.08% Div. Changes -32 -0.04% Sales 0 0.00% May/2008 4,630 5.47% Net Changes 424 0.27% April/2008 4,206 5.20% Net Changes 188 -0.06% March/2008 4,018 5.26% Net Changes 461 0.13% February/2008 3,557 5.13% Net Changes 277 0.14% January/2008 3,280 4.99% Net Changes 226 -0.01% December/2007 3,054 5.00% Net Changes 228 0.12% November/2007 2,826 4.88%
For the month, dividend income increased $101, and Yield on Cost (YOC) decreased -0.11%. These changes were driven by new purchases and dividend changes (no sales in June). Let's examine each of the these categories:
Purchases: The $133 increase in annual dividend income and -0.08% decrease in YOC related to the following purchases (yield at the time of purchase):
All three purchases lowered the YOC. As noted in earlier updates, I expect YOC to drop monthly since most new investments will yield less than my current YOC, and dividend increases will not be sufficient to offset it.
Dividend Changes: The -$32 decrease in annual dividend income and -0.04% decrease in YOC related to the following dividend changes (a=dividend stated in annual terms, q=quarterly, m=monthly):
The next monthly progress update will be on Saturday, August 2nd.
(Photo: sanja gjenero)
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