Freedom Fund Update – October 2011

Well, the time has come to update the Freedom Fund once again as we start another month. The Freedom Fund is my portfolio, and I think it’s aptly named. My portfolio is my way to freedom; freedom from working at a job I don’t enjoy to purchase goods I don’t need to impress neighbors I don’t care about.

The market’s volatility continues as we wind down the summer and enter fall. I think large and rapid swings in the markets are here to stay, especially as the eurozone’s debt woes continue. There are a lot of reasons to stay in cash and hide under a rock. The housing crisis continues, there are experts that believe another recession is unavoidable, and the unemployment numbers continue to depress economists and investors alike.

With all the bad news abound, it must be hard to continue to invest in equities as a major drop in the market must be just around the corner. Well, I’m here to tell you that my journey is still on course and I continue to dollar cost average my way into dividend growth equities month after month. I believe that this is fundamentally a wonderful strategy to build wealth over the long haul. There will be difficult times ahead, and at times I may even wonder how I’ll stick to my guns. I will stick to the plan because if you fail to plan, you plan to fail. If you follow the news and move your money around left and right you’ll never go anywhere.

The current market value of the Freedom Fund stands at $40,298.47. This is a very nice increase since the last published amount of $37,453.44. The big boost came from not only my recent purchase of Aflac (AFL) stock, but also a big increase in the price of my holdings of Harleysville Group (HGIC) due to their acceptance of a buyout offer from Nationwide at $60 per share. HGIC stock is up 118% over the last month. Nationwide is on my side! As I mentioned before, I’ll likely be taking the profit from this holding and reinvesting it where I see fit. I’ll make sure to update all my readers as those transactions are made.

I am currently invested in 18 positions. This is an increase since last month, where I was long on 17 positions. The additional position is Aflac Incorporated (AFL).

I’m extremely excited to post this update. On my last Freedom Fund update, I was optimistic that I would surpass the $40,000 mark before the end of 2011…but I didn’t expect that to happen quite so quickly. Through a combination of living frugally and regularly investing my savings I have achieved that goal much faster than I anticipated. We’ll see how fast I can get my fund to $50,000!

I’m very pleased with the way the Freedom Fund is progressing through 2011. My first published amount of the fund back in March, 2011 was $26,735.65. So obviously, even with violent and frequent swings in the market, it’s still possible to build wealth through smartly living below your means and investing in undervalued or fairly valued companies.

How are your investments doing?

Thanks for reading.

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16 Comments

  1. inq,

    The core of my portfolio is made up of large-cap blue chip stocks that don’t require daily monitoring. Outside of the world blowing up I feel pretty secure that these companies are going to continue doing business day in and day out. I do, however, monitor my positions as much as I can.

    Best wishes!

  2. Mantra,

    Nicely done on Harleysville! Even when something may seem to be bringing you down, events like this can turn things around completely!

    Always good to be able to double a stock and then buy into more good companies as a result. I had a stock that more than doubled in under a year, and since it wasn’t a takeover situation, I sold half of it (the gain and more) and invested in a low risk utility company with a good yield, and held on the stock that doubled as it also has a decent dividend yield. End result? More dividends and a more diversified portfolio, and over double the original investment.

    Thats why I love doing this kind of thing myself 🙂

    While this month was not kind to me, I have the long view of things. I’m still ahead of the TSX (Canadian index) and the Dow Jones for the year, and consequently, Index Funds, and really can’t say I’m even close to panicking the way so many others seem to be. Markets rise and fall, but the long term outlook and plan is what counts.

  3. My portfolio is -30% atm. It has taken big hit since I live in Finland and our stock market have published some profit warnings. I´m still cool with my investments since I don´t need money untill I decide to buy a house ..

    Overall finnish stocks have slumped -30% and US stocks have gained +3-7%. Now I´m closely monitoring Cameco and Freeport Mcroran but I´m waiting Q3 report and Greece situation. Unless they got more money 8b euros Greece is not able to fulfill its obligation like paying wages and pensions in mid october. Very intresting situation since deadline is in 2 weeks and nothing has happened yet.

    I´ve monitored US stock market and it seems everywhere stock markets have taken quote big hit but US stock markets are down like -10% or so.

  4. Neu Grufti,

    Thanks! The turnaround on HGIC definitely made a difference to my portfolio. I’m very happy about that. I cashed out my position today and took the profit and ran.

    Congratulations on your success as well. It sounds like you’re making some wonderful moves with individual positions and your portfolio as a whole.

    Keep up the fantastic work. It’s fun to share the journey with like-minded investors!

    Take care.

  5. MoneyCone,

    Thanks! I appreciate your kind words and support.

    Another great month for the Freedom Fund indeed. I’m happy to be moving up in this down market. We’ll see if my luck continues.

    Best!

  6. Shean,

    I’m sorry to hear of your portfolio’s performance. It does, however, sound like a tremendous buying opportunity for a long-term investor.

    You are right, our markets here have been surprisingly resilient, and I’m shocked that we aren’t much lower than we currently are. Any major bad news out of Europe and I wouldn’t be surprised to see an instant 5%+ drop. It’s interesting to watch the Greece situation unfold, along with the rest of the PIIGS.

    Best of luck with your future investments and I hope the Finnish markets bounce back for you. In the meantime, soak up the opportunity.

  7. Partisan,

    Thanks for your support. I really appreciate it.

    I seen your progress. You’re doing great over there. I’m doing my best to catch up to you.

    Keep up the fantastic work.

  8. HGIC was a very nice surprise, sad we are losing a traditional dividend grower, but doubling my investment in capital was nice on that one for sure. I sold as well last week and redirected the money back into other dividend stocks.

    -Chris

  9. Chris,

    Yes, it was kind of sad to lose a great dividend growth stock with a fantastic yield…but I’m certainly not saying no to $60/share! 🙂

    Congratulations for being an HGIC stockholder as well. This company got great value for the enterprise for its shareholders.

    It was a fantastic winner. I hope you have fun reinvesting your profits!

    Best of luck.

  10. Hey DM!

    I love the title, Freedom Fund! If anything, the name alone is enough to keep yourself motivated on your path to financial freedom.

    Breaking the $40,000 mark is commendable indeed, especially after such a short time frame. You’re doing awesome.

    From my perspective, I really like seeing a fellow dividend-investor who is not shy to own more than just a handful of stocks. I like the fact that I have a large number of stock positions from a diversification perspective, and with 18 and counting, you seem to have a preference in having a basket of equities to work with.

    Great post and keep up the great work!

  11. TWC,

    Thanks for stopping by!

    I’m glad you like the name. It came to me one day, and I couldn’t think of a more appropriate name for it.

    Breaking the $40k mark this fast is a dream come true. I’m hoping to pass $50k around February 2011. We’ll see if I can do that. Christmas will slow me down as I’ll be buying some gifts and flying to Michigan to see family.

    On diversification, I’m evolving on that front. In investing, one’s perspective and strategy will naturally change over time as experience builds. I think going forward I would like to have at least 35-40 positions when I’m all done. I know a lot of investors recommend staying concentrated in just a few, but I want my passive income to be spread out across many companies so if one company cuts or eliminates a dividend it doesn’t cause a dramatic reduction in my income level.

    Best wishes!

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