Sunday, June 2, 2013
Freedom Fund Update - June 2013
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 a job I don't desire to purchase goods I don't need to impress neighbors I don't care about. This journey is all about freedom and flexibility. One day the dividend income this portfolio generates will fully replace my day job's income and my time will be completely my own. What could you possibly want to own more than your time?
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It's important to keep in mind that while updating the overall value of my portfolio is important for historical reference and for purposes of keeping track of total return, my main focus is on the rising dividend income stream the Fund provides.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 Fund didn't have a particularly active May. I just didn't see that many opportunities over the last 30 days to deploy capital. I do of course believe in purchasing ownership positions in high quality companies through all market cycles and continued that mantra as I made a purchase on the last day of the month. I initiated a position in Realty Income Corp. (O) during the last two minutes of trading on the last day of the month of May. It wasn't pretty, but I still put a little capital to work for myself into what I believe is a high quality company trading for a fair price. This holding provides a very attractive entry yield in this rather expensive market (4.78%), and also provides monthly dividend income which I can use to reinvest back into the Fund via further ownership stakes in wonderful companies.
The current market value of the Freedom Fund stands at $112,842.62. This is an increase of 2.1% over last month's published value of $110,508.00, which is rather low due to the the simultaneous effects of a less active month (in terms of purchasing equities) and a rising fund value. The larger the value of my fund, the harder it will be to make meaningful impacts to the value in terms of percentages. This increase was mostly due to the fresh capital infusion, with which I used to make the purchase I listed above.
I'm excited for what the next month brings us. The market took a nice tumble on the last trading day of May, and some are speculating this may be the start of something larger. Who knows? I know I certainly don't. I only know to focus on the things I can control: ignoring all the noise out there and sticking to what I've been doing over the last three years.
I'm currently invested in 33 companies. This is an increase since last month as I initiated a new position as discussed above.
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 on 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. 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).
Full Disclosure: Long O
Thanks for reading.
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