Thursday, August 1, 2013
Freedom Fund Update - August 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It's important to keep in mind that while updating the overall value of my portfolio is important for historical reference and for purposes of keeping track of total return, my main focus is on the rising dividend income stream the Fund provides.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 had rather light activity last month as I continue to find it difficult to find compelling value in the market. I've talked at length about this, but even factoring my caution in I still remain completely committed to my plan to build an ever-growing passive income stream via dividends from high quality companies. As such, I initiated a position in what I felt was one of the better value opportunities on the market at the time in Royal Dutch Shell plc (RDS.B). The market actually did most of the heavy lifting for me, as the S&P 500 was up an astounding 4.95% over the month of July.
The current market value of the Freedom Fund stands at $123,154.37. This is an increase of 5.17% over last month's published value of $117,096.07. I'm obviously very excited to see numbers like this, but in the end the emphasis remains on the passive income the Fund can generate, as well as the valuation of companies I'd like to add to the Fund. A rising value of my Fund means attractive opportunities are becoming rather rare indeed.
Looking forward, I continue to keep my eyes peeled for value. I have a small watch list of equities I'm interested in, most of which are companies I'm already invested in, but are currently trading for prices that are less than my cost basis.
I'm currently invested in 37 companies. This is an increase since last month, due to the initiation of a position in RDS.B.
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 RDS.B
How are your funds doing??
Thanks for reading.
Photo Credit: Vichaya Kiatying-Angsulee/FreeDigitalPhotos.net