Monday, October 1, 2012
Freedom Fund Update - October 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.
It's important to keep in mind that while updating the overall value of my portfolio is important for historical reference and for purposes of keeping track of total return, my main focus is on the rising dividend income stream the Fund provides.
The large rise in values that an individual investor can see in their portfolios are always nice, but that unfortunately comes at the expense of rising stock prices. This is, of course, not something a dividend growth investor likes to see if they are still in the asset accumulation phase. I'll gladly take flat stock prices over a long period of time, as that allows me to continue building positions with wonderful companies and a larger percentage of ownership of said companies at cheaper prices. Who doesn't love a sale?
The current market value of the Freedom Fund now stands at $81,101.40. This is a large increase since my last published value of $76,156.47. This increase is mostly due to fresh capital allocation with which I used to increase my positions with Intel Corporation (INTC) and Norfolk Southern Corp. (NSC). I also initiated a new position with Kinder Morgan, Inc. (KMI) this past month. It was a busy September! Crossing over the $80,000 mark in total portfolio value is very rewarding psychologically, and it does feel great to know that my plan is working! But, it's still important to realize that my focus is on the rising dividend income stream this portfolio generates.
I'm currently invested in 29 positions.This is an increase since my last update, due to the initiation of a new position with Kinder Morgan, Inc. (KMI).
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?
Full Disclosure: Long all aforementioned securities.
Thanks for reading.