Monday, February 27, 2012
After my recent sale of my shares of Exxon Mobil Corporation (XOM), I decided to put that capital to work for me in my recent purchases. I was thinking about letting the capital sit in a cash position, as the market is not showing a lot of value at these levels. What I try to do, however, is not look at the market as a whole and instead look at individual equities and whether there is any value there on case by case basis. I especially like individual securities that have underperformed the market by a large margin, usually in a sector that has also underperformed the market as a whole. That leads me to the utilities sector.
The utilities sector is up 3.74% YTD, vastly under-performing the S&P 500 which is up 8.75%. The utilities sector is so far the weakest sector in 2012, which should come as no surprise after the monster run it had in 2011. In this individual sector there are securities which have shown even further weakness than the sector as a whole. I decided to put my capital from my XOM sale to work with two utilities, which I'll discuss below.
Sunday, February 26, 2012
I haven't done a weekend roundup in quite a while. Time flies by fast! Working 50+ hours a week at my job, managing investments and blogging all take up a large amount of my time. Although I'm looking for a way out of spending considerable amounts of my time at my day job, blogging and investing continue to be extremely rewarding and enriching. Thanks to all of you readers out there that provide awesome commentary and tips. We're all learning from each other.
2012 has been very kind to the markets so far. The S&P 500 is up 8.6% YTD, and it's surprisingly showing no signs of abating. I, like other value investors, am anxiously awaiting a 5-10% pullback which would provide better entry prices on quality dividend growth equities. Either way, I'm going to stick to my plan and purchase what I think are the most attractively valued investment opportunities through whatever market conditions are present.
Here are some excellent articles from fellow dividend growth investors, frugalists and personal finance bloggers from the past week.
Thursday, February 23, 2012
Well, for the second time in three months I have sold out of a position. I'm a little surprised about it, because honestly I do buy stocks with the plan of holding on for the long-term. But, things change and as a small investor in a big market I have to stay nimble and open minded. I don't believe in holding on to stocks simply for the sake of holding. If the stock, and company behind the stock, keeps doing what I purchased it for then I generally hold until a reason to sell presents itself. I usually only sell a dividend growth stock if the fundamentals of the company change, the dividend is held static or cut or the stock has become grossly overvalued. Although the stock I sold didn't become grossly overvalued, I felt that a nice run-up occurred and the yield had fallen to a point that I felt was unattractive. I decided to book in my gain and I plan on using that capital for other opportunities.
Tuesday, February 21, 2012
This article originally appeared on The Div-Net on February 16, 2012
The market has been on a tear to start 2012. The S&P is up 6.81% YTD, and it's showing little signs of slowing. This is a good thing or a bad thing, depending on your investment strategy. If you're a value-oriented dividend growth investor like myself, a market on fire can dim the prospects of finding a good value with which to put your capital to work.
Wednesday, February 15, 2012
Well, everyone is expecting a pullback in the markets. I read about a lot of investors currently selling equities and converting that capital into short-term bonds or cash. I continue to believe in my long-term strategy of buying attractively priced businesses every single month on my march to financial freedom and holding those businesses as long as they continue to raise dividends and don't become extremely overvalued or lose the fundamentals that compelled me to purchase in the first place.
The S&P 500 is up 6.81% YTD already and we're not even two months into the year. It's been an extremely strong start to the year, and although I am expecting a pullback like a lot of other investors I don't know exactly when it's going to come so I just continue to do what I know how to do. I take excess capital from my high savings rate and purchase what businesses I think give me the best chance to grow my burgeoning portfolio.
Monday, February 13, 2012
"Frugality Vs. Quality Of Life". That sounds like a title fight. Two heavy weight contenders going at it. But, it's not like that. Frugality and quality of life are not necessarily at odds with one another, nor are they mutually exclusive. However, I thought I'd share some of my experiences with living (extremely) frugally over the past year and how it's affected my quality of life.
Thursday, February 9, 2012
The "crossover" was a phrase or term popularized by one of my favorite books, Your Money Or Your Life. The crossover is basically the moment where your monthly passive income finally exceeds all of your monthly expenses. When I first read YMOYL and the chapter where this term was coined, it became a dawning moment for me; a moment where I felt like my eyes had been opened for the first time. I realized that it was possible to pay for expenses without going to a jobby-job for 50+ hours a week, and seeing it on a graph made it all the more possible for me to buy in to this theory.
Tuesday, February 7, 2012
Saturday, February 4, 2012
Well, 2012 is off to a wonderful start for me. We're only one month into the year and I've already received a raise at work, accomplished one of my goals by purchasing a vehicle to get me reliably (hopefully) to work and home and I've received a solid month's worth of dividends which I reinvested into Philip Morris International (PM) and Norfolk Southern Corp. (NSC). That's a solid start! Hopefully the rest of the year goes as well.
The dividends I received for the month of January are recorded below. It's not my largest tally ever, but it's another solid month of passive income. It's income that I wouldn't have had otherwise, if I spent all my capital on depreciating goods instead of appreciating assets.
I hope these monthly dividend income reports provide inspiration for any investors out there that are just starting out. It's easy to see these payments rising month after month and it shows that it's possible to one day pay for monthly expenses with dividends, which would provide an investor opportunities and freedom to pursue other interests than full-time work. Without further ado:
Wednesday, February 1, 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.