Tuesday, May 1, 2012
Freedom Fund Update - May 2012
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.
I feel extremely fortunate and thankful that I'm able to post these updates every single month which shows the power of monthly contributions to investments because of the high savings rate I maintain. It shows how a relatively large sum of money can be built through the power of time, patience and perseverance.
Mr. Market continues his emotional swings up and down, but what do I care? I just collect my dividends and combine that with fresh capital. I take the combined sources of funds and allocate that towards attractively priced dividend growth stocks. I try to buy on days when the market is particularly emotional and we see large spikes in volatility, but otherwise I just try to buy quality at an opportune price for the long-term. I believe that's a sure recipe for success if one is looking to build wealth over a significant period of time.
The S&P 500 has basically been flat over the last month, so the increase in the value of my portfolio came from dividends received and the capital I added at the beginning of April. I'm perfectly okay with a flat market month-over-month, and actually prefer that to a rising market as it gives me more shares for my dollar.
I made just a couple of minor changes to the Freedom Fund since the last update, purchasing two quality dividend growth stocks. I hope these two purchases provide me two gears in my dividend growth machine that will continue to grind out dividends for many years to come. I initiated a position in Southside Bancshares, Inc. (SBSI) and also purchased shares in Raytheon Company (RTN) a couple weeks ago.
The current market value of the Freedom Fund now stands at $67,900.79. This is a nice increase since the last published value of $65,666.59. Again, this increase in market value is mainly due to my own capital as well as dividends received.
I'm currently invested in 27 positions. This is an increase since last month, when I was invested in 25 positions.
These updates are mainly designed to show the increase in the value of the underlying equities I'm invested in, but the main purpose of investing in dividend growth stocks is for the rising stream of dividends over time. So, with that said I don't put too much emphasis in these monthly updates on the value of my portfolio. I think it is a good idea, however, to keep track of the rising (or falling) value of one's securities and be aware of where they are in terms of the marketplace and whether or not certain stocks are attractively priced or not. It proves to be a useful exercise, for me at least, to update the values monthly. It gives me fresh perspective on which equities are performing well and which aren't, and from there I can make educated decisions (based on further due diligence) on which stocks I'd like to add fresh capital to (while considering portfolio weight as well).
How are your portfolios doing?
Thanks for reading.