Dividend Portfolio: 2009 Year End Update

dividend-new-yearYear 2009 was the first time that I made my goals public. It has been a truly a roller coaster ride. The year started with equity markets going down steeply, and then it came back up quite significantly. Throughout the year I continued to add good quality dividend growth stocks in my portfolio. So how did my dividend portfolio perform with reference to my goals set at begin of 2009? The table below shows the summary of parameters at end of year 2009. The portfolio now has:


(1)  Dividend Cash flow is $2221 (2008: $1358, Target: $3000);

While I continued to increase year-over-year dividends, I missed my goal by large margin. The primary reason I missed my goal is desire to maintain asset allocation and valuations. Many of the stocks that I would like to buy have had significant run ups and hence the valuations did not justify buying them. In the beginning of 2009, when I had identified my goals, I had not anticipated this level of change in the market pricing. For year 2010, I have set my dividend cash flow goals at $3200. continue reading rest of the article….

Monthly Progress Update – October 2009

Summary for October 2009 is that I did buy two stocks to increase my annualized dividends. In addition, I also continued to add to my existing positions because I have automatic dividend re-investments for almost all of the stocks. Attached below is the summary table to reflect the status as of October 31, 2009.

Progress Update October 2009

Progress Update October 2009

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Risk Analysis of Portfolio – 2009 3Q

growthLast week, I presented an update on the monthly progress of my dividend portfolio. In this post, I am discussing the quarterly risk analysis. My objective here to make sure I am continuing to following my risk management process.


  1. Maintain pre-determined asset class allocation;
  2. Maintain pre-determined diversification (any sector should not exceed 10%); and
  3. Dividends from a single stock should not exceed 5% of total dividends.

My dividend portfolio holdings can be referenced in My Portfolio menu at top of this page.


Maintaining Asset Allocation

Chart 1 shows the asset class allocation along with my maximum target limits. In general, I am continuing to meet (or much closer) to my pre-defined target levels. During 3Q09, I did not make any contribution to the emerging markets index funds such as VWO and EPI. This was because I believe they rose too quickly to my comfort level. I am still tad lower than my maximum limit for emerging markets.

continue reading rest of the article….

Style Drift in Closed End Funds

riskIn my view, Closed End Funds (CEF) are very similar to mutual funds with 1%+ of expenses, and many are actively managed. The difference lies in trading and not able to create new units. When I started investing few years back, in income domain, I was attracted by high yields. While I got rid of quite a few CEFs, I still continue to hold IIA, IGD, and AOD.

Among others, one of the issue with these funds (for which I get annoyed) is the way the fund managers drift away from objectives and execution strategy. Investors continue to remain invested under the impression that fund managers are continuing to stick to the originally stated objectives. Furthermore, there is nobody to question these managers. The whole premise of using actively managed funds (including CEFs) is that managers will keep up original objectives and use their skills for reducing downside risk. Let me discuss two examples:

continue reading rest of the article….

Monthly Progress Update – September 2009

Summary for September 2009 is that I did buying to increase my annualized dividends. In addition, I also continued to add to my existing positions because I have automatic dividend re-investments for all stocks. Attached below is the summary table to reflect the status as of September 30, 2009.

September 2009

Portfolio Status Update

  • The total portfolio dividend cash flow was $1786 (up from $1612 in August 2009). This change was due to new purchases.
  • The portfolio’s total yield on cost went up to 5.21% (up from 4.82% in August 2009)

New Purchases

  • Purchased JW-A with annualized dividends of $36.00 (2.0% of total portfolio dividends). The purchase yield was 1.9%.
  • Purchased DOV with annualized dividends of $53.00 (3.0% of total portfolio dividends). The purchase yield was 2.94%.
  • Purchased WMT with annualized dividends of $44.00 (2.4% of total portfolio dividends). The purchase yield was 2.21%.

Additions to Existing Positions

  • Added SYS, annualized dividends is now $77.00 (4.3% of total portfolio dividends).

Selling – None

General Comments

  • My over exposure to AOD for total portfolio dividends is automatically getting reduced since I am not adding to my existing position. My exposure has reduced to 14.2% (from more than 20% in January 2009).
  • As we enter the last quarter of calendar year, it is almost certain now that I will miss my year end goal to reach total dividend income of $3000. I am holding on to cash expecting that there will be better opportunities (i.e. at lower price levels). Most of the stocks on my shopping list are quite above my high end of fair value buy range. Therefore, I am continuing to pursue my year end goal instead of revising the goal. I would have revisited and revised my goal if I did not have cash waiting to be deployed.

Later this week, I will publish the quarterly risk analysis.

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