Portfolio

Right now our dividend stock portfolio is a lot smaller than I hope it will be one day, but we keep adding to it every month. I’ve built out an Excel spreadsheet that tracks our portfolio, and I update it during the month as we receive dividends. On this page, however, I’ll simply update you every month or so.

Our Dividend Stock Portfolio Today

Our dividend stock portfolio holdings

As of right now, our portfolio has 8 different companies in it, which I aim to increase to about 15 to 20 companies and funds over the next few years.

A few things I want to mention about our portfolio are that the cost basis you see here includes any dividends that have already been reinvested. Accordingly, the Gain/Loss column shows capital gains only and does not factor in dividends. These numbers also include trading commissions of $8.95 per trade, which annoys me to some extent but follows common accounting standards.

The quarterly dividend and annual dividend columns also reflect a forward-looking dividend yield. In other words, from today on until a year from now, I expect to receive that amount in dividend income, without factoring additional investment or dividend reinvestment into the mix.

The % Return totals are the annual dividends we receive per year divided by our cost basis. The column to the right is the market value divided by our cost basis. One thing you should realize is that this return is not annualized, and represents only a total return. The average annual rate would be closer to 10%, but I don’t bother to track it because it changes every month.

Our Investment Strategy

I’ve decided to follow a pattern of increasing our position in currently owned stocks once a year and initiating a new position once a year.

The exception to our normal investing pattern will be if I find a great opportunity to buy a stock already on my potentials list at a great price.

I’m trying to get to the point where each of our current holdings will pay us $100 dollars a year, after which point I will continue the same pattern until they each pay us $200 a year, following this same pattern until I can break it down so that they’re each paying us upwards of $100 a month, instead of a year.

In general, I try to buy stocks that are trading below $30 a share, not because I think those stocks are awesome, but because my wife and I have so little capital available to invest right now that I don’t feel it makes sense to buy higher priced shares. I want to be able to see enough progress that I don’t get burnt out or discouraged.

Speaking of which, a fun exercise I like to do to keep me motivated is to divide our current annual dividends by the days in the year so that I can see how our dividends have grown over time. Right now, April 2017, we receive the equivalent of $1.13 a day in dividend income.

That’s enough for a pack of gum, every day, for a year!