Is Managing A Large Dividend Growth Stock Portfolio Time Consuming?

timeconsumptionSomething interesting has happened since I first started investing in stocks way back in early 2010.

When I first started, I figured I’d end up with a portfolio of 20-30 stocks. Part of this was because I was busy working around 50 hours per week in the auto industry. So I just didn’t think I’d have a lot of time to really manage more stocks than that, and I had just naturally assumed that managing a portfolio any larger than that would be too time consuming. In addition, I knew that I could achieve diversification across most sectors that represent the economy with just that many stocks.

However, once I passed 20 stocks and neared 30 stocks, I realized that there were still a number of high-quality companies out there that I didn’t own a piece of, yet I really wanted to. So I asked myself if it was necessary to limit myself to some arbitrary portfolio size, which would then mean there would be a host of great companies that I would never own a piece of.

And I decided that it just didn’t make sense to limit myself like that.

Now, I’ve already discussed why I want to own such a large portfolio, and that’s based around dividend income diversification. So I won’t be touching on that again. Rather, I want to discuss why it’s Β not really burdensome or time consuming to manage such a large portfolio, if done correctly. I have some experience in this arena, as I currently own equity in 52 different companies.

Focus OnΒ The Blue Chips

If you look at my portfolio, you’ll notice that the majority of the companies I’m invested in are blue-chip companies. These are large and stable businesses that have fairly lengthy track records of operational excellence.

My top five holdings, by dollar weight are:

  1. Johnson & Johnson (JNJ)
  2. Philip Morris International (PM)
  3. Norfolk Southern Corp. (NSC)
  4. PepsiCo, Inc. (PEP)
  5. Kinder Morgan Inc. (KMI)

Approximately 23% of my portfolio is allocated to these five companies. And most of the rest of the portfolio is allocated to companies of similar size and quality.

Look, I don’t need to worry about what the $304 billion company Johnson & Johnson is up to. I’m not looking over the CEO’s shoulder, concerned about the drug pipeline, quarterly medical device sales, or distribution of Listerine. Johnson & Johnson will do just fine without me worrying about them, which is one of the main reasons I’m invested in them in the first place.

Same goes for most of the rest of the companies I’m invested in. It’s fairly easy to run a portfolio of this size because there’s really no input necessary from me, and extremely limitedΒ personal involvement. That’s a big reason why it’s not only easy to run such a large portfolio, but also why I prefer investing in stocks to, say, rental properties. Pepsi isn’t going to call me if a production line has an issue. Philip Morris isn’t going to send me an email about input onΒ e-cigarettes. I just don’t need to worry about day-to-day operations.

When constructing a portfolio, I tend to invest in companies that just don’t require a lot of babysitting. I have better things to do. And this is why you’ll notice that I avoid complicated businessesΒ that are subject to rather quick and/or radical change, or businesses that I don’t understand, which would require a lot of my attention to keep up on. I also try to avoid companies with either poor track records or no track records at all. Thus, I find little interest in technology, IPOs, and mREITs.

By allocating the majority of my portfolio to these high-quality blue-chip companies, this allows me space and time necessaryΒ to take on the occasional interesting opportunity that might require a bit more attention, like the tiny food company, Armanino Foods of Distinction Inc. (AMNF). In addition, I have plenty of time available for when the odd issue occurs, like what happened recently with the accounting scandal at American Realty Capital Properties Inc. (ARCP).

Focus On The Long Term

When I invest in a company, I’m thinking about where they might be 20 or 30 years down the road. Thus, worrying about what happens over the next few quarters after I investΒ has very little impact on my decision as to whether or not to remain a shareholder.

I think too often investors pay too much attention toΒ quarterly results or even what happens from year to year. Business cycles, interest rates, commodity demand, and politics are just a few issues that can cloud a company’s performance over the short term. Worrying about one or two bad quarters is just not productive, in my view, especially when my intended holding period is the rest of my life. Constantly reassessing your investment thesis is what can be unnecessarily time consuming. It’s like performing an analysis on a company over and over again.

In addition, worrying too much about those aforementioned macroeconomic events will cloud your judgement. Worrying about where interest rates are going is just a complete waste of time, in my view. I’ve had numerous people stop by the blog over the years and question certain investments because “interest rates are surely going to rise shortly” or “the Fed is printing too much money”. I remember the fiscal cliff was a big deal not long ago, and investors were freaking out. Now, we don’t even talk about it. Interest rates were all the talk back in the early 80s, but when’s the last time someone mentioned Paul Volcker?

Focusing on the long term allows you to clear your mind. I can invest in over 50 companies with little worry because I just don’t worry about macroeconomic trends. I worry about company-specific fundamentals, competitive advantages, and qualitative aspects. I concern myself with buying high-quality stocks at a fair or better value. These concerns are easier for me to control and require much less time and worry to focus on.

Focus On Technology

I just recently pointed outΒ how technology has made achieving financial independence easier than ever. However, it also allows managing a large portfolio easier than ever.

For instance, I have personally signed up for Seeking Alpha’s email alerts. Any time one of the companies I’m invested in announcesΒ earnings, declares a dividend, makes any changes or announcements, or are otherwise featured in the investment newsΒ in some way, I receive an email. These emails are fantastic, because they typically condense the information down to what I need to know. Quarterly report emails include revenue and EPS, as well as any pertinent information like volumes, guidance, or notes from management. These literally take 10 seconds to scan.

Most of the time I spend looking at a company is done at the outset when I initially analyze a company for investment worthiness and value.Β  Other than reviewing numbers every so often for purposes of quality control, I also occasionally recheck stocks in the portfolio for valuation so as to know if there might be an opportunity to up my equity stake(s). It takes practice to know the numbers off the top of your head, but this doesn’t take long at all in reality once you’re used to it. Furthermore, since most of the companies I’m invested in are those aforementioned blue chips, most major professional analysis firms like Morningstar track and value these stocks on an ongoing basis, which means a quick check on value is just one mouse click away. Technology makes it amazingly easy and efficient to run a quick valuation check which may or may not confirm what I already think about a particular company’s stock. If I’m interested in adding to a position, then there might be more time involved to recheck the numbers and go back over their prospects, but it won’t be anywhere near the time required during the initial analysis. Furthermore, this process would be just as time consuming whether you own 10 stocks or 50. The key is that the overall management isn’t much different.

Focus On The Fun

One last point, which might actually be the most important, is that this is just plain fun for me! Even if managing this large of a portfolio wasΒ time consuming, I’d still do it.

I love analyzing stocks, valuing companies, and reading annual reports. Like some guys might love power tools or leather recliners, I love stocks. And the more the merrier, to a degree.

It’s enthralling to know that I can be a miniature railroad baron by owning a chunk of Norfolk Southern; or a real estate tycoon by owning a chunk of Realty Income Corp. (O) and its commercial properties; or a retail icon by owning some of the best retailers in all the land, in Wal-Mart Stores, Inc. (WMT) and Target Corporation (TGT). To limit myself to certain companies in certain industries because I might go over some predetermined number of stocks would be silly to me.

To point out the supposed time consumption in managing a large portfolio of high-quality dividend growth stocks would be like pointing out how much time it takes to restore a 1969 Camaro to someone who loves to work on classic cars. You could go out and buy a fully restored 1969 Camaro just like you could manage a portfolio of just 10 or 20 stocks. But if you thoroughly enjoy it, it doesn’t really matter how much time it may or may not require. We all have to spend our time on something, and that something should be enjoyable and hopefully a passion of sorts. That’sΒ one of the mainΒ reasonsΒ of reaching for financial independence – to spend your time on things you enjoy. To avoid something that you enjoy because of time consumption (especially when it’s not even time consuming, as I’m pointing out in this article) is completely missing the point.

This is like a hobby that happens to pay me really well. And one day this hobby of mine is going to pay for all of my expenses, thus rendering me financially independent and able to do go about my day without regard as to how I’m going to get by. And it’ll require even less time at that point because I’ll likely be accumulating assets at a much slower pace, or possibly not at all. Sure, there will still be the occasional checkups here and there to make sure things are humming along, which is just part of the fun.

Conclusion

I’m not trying to talk anyone out there into running a portfolio of similar size to my own. You’ll have to find your own comfort zone for something like that. However, what I did want to accomplish with this article is to dispel any notion that managing a portfolio with 50 or moreΒ positions is somehow extremely time consuming or unwieldy. I was managing this portfolio all the way through my career in the auto industry; so I was working 50 or more hours at the dealership, writing here on the blog, and then also managing a large portfolio all at the same time. IfΒ running a portfolio of this size was as time consuming as some might make it out to be, I wouldn’t have even had time to sleep.

Now that I’m writing full-time, I have even more time to manage things. However, the portfolio just doesn’t require much of my time. I’d be very surprised if I spend more than five hours per week with active portfolio management, although the picture is a bit clouded for me because my way of life isΒ now intermingledΒ with investing.

I would only hope that you don’t place an artificial ceiling on yourself because of any misplaced fear that a large portfolio will become unmanageable. It’s just not that way at all, especially with modern technology. I can think of at least 20 high-quality companies right now off the top of my head that I still want to invest in but haven’t yet, and I simply won’t limit myself because of some supposed number of stocks that’s just the right number to own. There is no right number. The number of stocks you may end up owning is completely up to you. JustΒ make sure your portfolio doesn’t stray from your investing goals simply for the sake of owning more stocks. I’m not out to own any more stocks than anyone else, because more isn’t necessarily better, and will only own a piece of those companies that fit within my investment criteria. But if there’s a high-quality company out there that pays and grows dividends and is selling a piece of itself for less than its intrinsic value, I’m probably going to open my checkbook. That’s regardless of whether I already own the stock or not. Simple as that.

Finally, this is just plain fun! I love owning a chunk of 52 wonderful businesses and I love collecting approximately 200 dividend checks every year. I can’t believe that something so fun can be so financially rewarding. Some people may find owning that many stocks burdensome, but I think it’s actually completely the opposite. Cutting the grass and cleaning the house? That’s burdensome to me. Enjoying business partnerships with dozens of great companies that pay me a portion of rising profits? Not so much.

Full Disclosure: Long JNJ, PM, NSC, KMI, PEP, AMNF, ARCP, O, WMT, and TGT.

What about you? How many stocks do you manage? Find it burdensome or time consuming?Β 

Thanks for reading.

Photo Credit:Β Kittikun Atsawintarangkul/FreeDigitalPhotos.net

Edit: Corrected “put” to “pay”.Β 

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138 Comments

  1. I don’t have any stocks to manage! Well, we bought some in Royal Mail when it was floated on the stock market, but we’re just going to leave them alone for now and see what happens in the long term. I keep looking at investing in funds as our long-term investment strategy; the charges would be much less and the risk would be lower, but I’m yet to take that final step. Maybe I just need to bite the bullet and start small. I guess I’m just worried I’ll lose it all?

  2. Great post Jason!

    I’ve changed my mind on my own portfolio diversification in the last year or two as well. These days, I’m with you. I’m at 25 companies now (26 next week with Unilever). I wouldn’t be surprised if my portfolio had 40+ stocks within 2-3 years. It’s too restricting to own only 20-30 companies.

    I like the idea of not being dependant on a handful of companies doing well. Even when my top holdings are KO, XOM and IBM, I do see the need to diversify. The world has many great companies and having more of them is, well, just too much fun πŸ™‚

    Finding those gems is a bit of work but it’s highly rewarding.

    Another factor that limits the amount of work:
    I limit myself to quality businesses, just like you. If I went on vacation for a few years, I doubt I need to worry about most of my companies. What would have some dividends, growing profits and probably some capitals gains to boot.

    Additionally, I’ve got full positions already in some of my companies (KO, IBM, XOM, PM, MDT and so on). Until my portfolio has grown significantly, I only need to monitor them fairly loosely (since I generally don’t sell/trade).

    Keep up the good work!

    Regards

    Jarmo

  3. I have an addiction that needs careful control. I am a habitual stock buyer. I love stocks and always can find one of interest. The problem is not using the dividends I receive to purchase a little of many companies. I have the inverse issue in that I tend to overweight the best ideas. To combat this defect in my psychology, I have come up with a self imposed min/max limit.

    It is a behavior fault so if you don’t have it you are lucky. But, the idea of disciplining myself to a fixed amount keeps me from holding onto losers or from ballooning my portfolio to 1000 names and only a few shares of each.

    I did not invent the analogy, I read it somewhere in a long forgotten investing book. Maybe you know which? Let me know if you do.

    I picture 20 pigs at my trough. In order to buy a new name, I must cull the runt of the litter. (get rid of the looser)
    this also creates a bar that any new stock must be better in potential than the runt. (keep improving)
    Finally, I try to imagine a minimum 3 year lock into a company. That is, I can not sell it for 3 years. I make exceptions if something comes up (SEC inquiry for example or freeze of dividend) or if the pig is truly a runt I may utilize it to offset some other gain (tax loss harvesting).

    I find I need this sort of control on myself. I wonder if I am alone? I know I am my own worst enemy so I combat myself with many of these disciplines. So far, the net is that I have a portfolio I am proud of and take great care in adding to. How about you?

  4. Agreed! I’ve seen many people commenting relating to “how many stocks should I own, why do you own so many?”. Take a page from Peter Lynch, if the business is a great value why wouldn’t you want a piece? It’s 2014, we have plenty of technology to help us. How much time do people spend following facebook friends πŸ™‚ ?

  5. I find myself obsessively checking news for the companies I’ve invested in, but like you, I enjoy it. When you are dealing with blue chip stocks, especially over the long haul, it doesn’t necessarily require crunching numbers each quarter or what have you. The more speculative stocks may require this attention to detail but for us that initially invests knowing we will be holding 10 – 30 years or forever, you may condense your ‘homework’ to quick summaries. I don’t think I could handle such a large portfolio as yours, but I’ll be shooting for 30-35 companies eventually. Some good information presented here, so thank you!

  6. 200 divident checks a year. You ought to shoot for 365 checks that way you will receive a check for each day of the year. Enjoy your writings, keep up the good work.

  7. Dividend Mantra,

    Good post. One of my positions is Boston Pizza Royalties Income Fund. The Franchisees of Boston Pizza pay a 7% royalty. This is separated 3 % to the Boston Pizza ownership and 4 % going to the Royalty Income Fund. The only expenses of the fund are adminstative and some debt. This is a simple business model and I get paid every month. The fund is in the process of buying back units so I will own a bigger portion of the fund going forward. The owners of Boston Pizza own approx 24 % of the units as well. I do not have to keep researching this company and take a glimpse of the earnings from time to time.
    I do own a few companies that I pay a great more attention too as these companies are high risk.
    I can think of 10 Canadian companies that I would like to own a piece of. I definitely would like to own shares in CP RAIL or CN RAIL as these 2 companies have wide moats around them. Lots of US companies I would also like to own a piece of.

  8. DM,

    Great article. I am with you on this topic and it is someting that is always on my mind as my portfolio continues to grow. If you focus on investing in companies that will succeed 20+ years into the future, you will spend less time monitoring the short term activites because they are much less likely to have major short-term activity. I originally thought I would sink all this time into monitoring all of my investments; however, since we have chosen to invest in the solid blue chip companies, they monitor themselves (as you mentioned in the article). For some, I spend as little as a hour monitoring them a month just to see if they surprisingly announced a dividend announcement (PG for example). For these companies, I feel that paying attention the market as a whole is enough to monitor them.

    Unlike other investors that like to invest in turnaround companies or other short-term investments, I hate having to continuously monitor the companies activities and eagerly await an earnings announcement to know the fate of my investment. It requires a lot of time and adds some level of stress if the company has the potential to flop. I still hold on to ARCP as an inestment because I think it will turn around, but following the daily activity is becoming exhausting!

    My favorite part of investing are all the hours that are logged in the initial investing stage. I love the due dillegence that is required to know if you are picking the right stock. As the theme of your article points out, all the hours up front save you monitoring time going forward if you select that large, blue-chip dividend growth company.

    Great article! Keep up the great work!

    Bert, one of the Dividend Diplomats

  9. Good post, at first I was personally thinking 40 stocks would be my limit. Heck if I kept adding to the portfolio, I would be an ETF. But as I kept reading about DGI and the many companies, good companies that I would like to own, that pay a dividend – the number easily crept above 40.

    I have to admit that once you own the company there isn’t much work to maintain the holding, signing up for Seeking Alpha’s mailing list keeps me informed too. As many DGI’s you typically don’t sell unless there is a dividend cut or the dividend growth isn’t as high as you want. When I get the email from SA that xyz hasn’t upped their dividend (in the last year), cut it, or if some major issue has happened then I will re-evaluate the holding either putting it on probation, selling, or even buying more. Two examples, I sold INTC after its dividend held solid over a year. I didn’t jump on the sale as many did, but I eventually sold at a better price than some DGI’s that quickly sold after the no increase. The ARCP issue, I didn’t have a lot of cash in that one, but it had reached 50% of what I purchased it at, I ended up buying more because at the end of the day, the properties and leases are still there. I’ll give it some more time to rebound and see if the dividend stays current.

    I think one benefit of having 50ish companies gives you the luxury of waiting some of this out, not to mention still being in the accumulation phase helps too.

    All in all, I let you DM, Seeking Alpha, majority of you blog roll do all the heavy lifting on the analysis of the companies I am interested in. Can I do an analysis of PEP, MO, O, etc as well as you, hell no. But thanks to your time and effort I can read what you have done and then decide if I want to own a part or pass on it. Divdend Growth Investor does a heck of an analysis too.

    So thanks for all your hard work and I love that you love to do it. I love to read it and get your take on it. Keep up the good work.

  10. I agree the more companies I own the more I realize just how many great companies I dont own yet. The wonderful thing is that once you reach FI or can at least cut back some on work you then get more time. But I dont necessarily feel I need to check up on every company I own and watch them like a hawk since the majority of my holdings are some of the bluest of the blue chips. Plus if youre investing in individual companies you should be enjoying the process.

  11. Nice post, Jason. I find owning more companies also broadens my own field of interest and with time, my circle of competence as I understand more about certain businesses and certain sectors as a whole. I am partially learning about the world through these companies.

    There is a lot of satisfaction in becoming a part owner of some of these great businesses.
    Sometimes I think of my portfolio as a country, and I think what else my country needs (me being both the only citizen as well as the sole ruler πŸ™‚ ) – it’s more of a mental exercise for diversification purposes but it is fun to increase ownership.

    The counterargument that is sometimes mentioned is that in the end you may end up putting together your own ETF. And in my mind I am like: ‘Exactly! – but I am in full control over my own ETF’. How many 0.0x percentage value are you willing to sacrifice for this control… for me it’s about 0.1% difference vs going with a Vanguard fund (purely going off expenses and expense ratios – not taking returns into account).

    Owning more stocks also tends to push me to track them and see opportunities within my portfolio. I got some more ARCP at $8.2 or so a few weeks ago, we’ll see how that one goes, but it’s not as if all those properties they owned got destroyed – I’d probably continue to hold it even if they cut their dividend in half.

    I wouldn’t mind getting some PEP, MDT or some more JNJ – but it depends on their valuations as well as my availability of capital :). In regards to trains, UNP has been my best performer this year (around 50% up) – the yield always seems low because the price appreciated a lot, it also has a nice dividend growth.

    All the best!

  12. Jason,
    You wrote, “Thus, I find little interest in technology, IPOs, and mREITs.” I thought you owned shares of IBM which is still a technology company. Could be my memory is incorrect, but assuming that I am correct, under what circumstances will you invest in technology?

    I have 18.6% in technology if you include MA and V, 12.1% without. I think that there are several big tech firms that merit attention and have little risk (AAPL, INTC, CSCO, IBM) while paying a nice dividend. I also hold GOOGL (no dividend) because I think that it is the most innovative company right now. I guess we invest in what we know, and I’m a typical engineer that loves electronic toys.

    Nice write-up,
    KeithX

  13. NEW INVESTOR says
    I am following you some time ago and I have been interested in their investment strategy.
    Businesses are harder every day, but is more difficult to manage the resources we have harvested. And at my age I should be cautious about my welfare and my wife.
    The investments we have made in recent years have not yielded the expected results.
    At this time I want to invest 70k part of your portfolio.
    Shares which recommended me.

    Best regards,

    Juan

  14. Nicola,

    I know you’ve been talking about investing for a while now. I think the key is just to start slow and ease your way into it. There’s risk there, but I believe you risk far more by avoiding investing. Furthermore, “investing” is a pretty vague word. There are plenty of different asset classes out there, with different risk profiles. Choose what works best for your personality and consistently add fresh capital. πŸ™‚

    I wish you the best of luck finding that comfort zone.

    Cheers!

  15. Jarmo,

    Right. They key is to focus on quality. I just don’t find myself worrying about my portfolio very much because it’s anchored by fantastic companies.

    If I were a day trader or something, things would be vastly different. I’d have to stay on top of things all the time. But worrying about what Pepsi is doing every single day is just not a value-added activity, in my opinion, nor is it necessary.

    Thanks for dropping by!

    Best wishes.

  16. Dave,

    Haha! That’s a good point about Facebook. There are people who spend HOURS on that thing. Yet, I spend much less time managing a portfolio nearing $200k with over 50 stocks. What’s really the more worthwhile and valuable pursuit? I guess that’s up to you. πŸ™‚

    I doubt I’ll ever manage a portfolio anywhere near the size of Lynch’s Magellan Fund at its peak, but I’m okay with 70-80 stocks with the knowledge that it’s really not all that burdensome or time consuming.

    Best regards!

  17. Agent,

    I think we all have different personalities. So some of us will naturally be a bit more hands-on with some of this, in regards to checking news and reading quarterly reports. I’m far from “obsessive” with checking news, and find a glance at the quarterly reports more than enough for most of my activity. Occasionally, major news comes out, and there are annual reports to glance over. But it just doesn’t take that much time when averaged out over the course of a year or whatever.

    But it’s definitely fun. And I think that’s key. If this isn’t fun for you, there are probably far better ways to spend your time.

    Thanks for stopping by!

    Take care.

  18. IP,

    Exactly. By focusing most of your portfolio on the high-quality stuff, you have the room in your portfolio for the occasional high-risk/high-reward play that might offer outsized returns, but could potentially take up more time. So you can manage your time appropriately, depending on what works for you.

    I’m with you on the railroads. I want to eventually hearken back to my childhood memories of playing Monopoly, where I “own them all”. Seriously though, I would like to own UNP at some point, to own a major carrier in the east and the west.

    Cheers!

  19. tuliptown,

    Hmm, I just don’t share that type of behavior. My entire universe of stocks that I either own or watch is somewhere around 100. So I’ll never own 1,000. And I probably won’t even own all 100. I just happen to believe the world of high-quality companies is beyond just 20 or 30. The whole idea of culling the “runt of the litter” just doesn’t make sense to me if we’re saying that a company like Unilever (a stock I didn’t own until I crossed 50 names) is in that class. I guess it comes down to how many high-quality companies exist out there, and how many of them regularly and reliably pay and grow dividends. If someone believes there are just 20 or 30 of them, then that’s how many you would want to own. I, however, believe you could make a case for at least 100, and I hope to own the best of the best. Just my take on it.

    Best wishes.

  20. Bert,

    Right. If we were day traders or short-term investors, things would be very, very different. But selecting high-quality businesses and planning on holding for decades means you just don’t really need to watch things every single day. In fact, that would probably serve to be not only a waste of time, but potentially harmful.

    And doing the proper due diligence ahead of time, before investing, means you need to spend a lot less time down the road. You can’t always predict certain things (like the ARCP accounting debacle), but maximizing the time you have available for those rare events means you can handle them with complete attention if/when they do occur, rather than just rushing through the decision-making process because you’re pressed for time.

    Thanks for the support!

    Best regards.

  21. ed69,

    Thanks for the very kind words. I’m glad you enjoy the content! πŸ™‚

    Yeah, owning 50 or so companies also means a problem child, like ARCP, just doesn’t have that large of an effect on your wealth, income, or emotions. I’m able to largely brush this entire incident off because of this. I kind of mentioned this on my last article that I linked at the beginning, but it definitely bears repeating. It’s really all about income diversification for me. Attaining sector diversification could be had with a much smaller portfolio, but that’s not really at all what I’m after.

    I’m happy to do some of the heavy lifting for you. It’s something I enjoy!

    Thanks for stopping by.

    Cheers!

  22. JC,

    I’m with you. I’m far from the type who checks on things like a hawk. Emails come in, I spend a second or two to read them, and then they’re deleted. I go about my day otherwise normally. Didn’t take that much time when I had a full-time job in the auto industry and it doesn’t take that much time now that I’m writing full-time. Even if it did, however, I happen to find enjoyment in all phases of investing, so it’s no issue at all for me.

    Hope all is well with Luke!

    Best regards.

  23. For me, its about diversification and peace of mind, all bundled with the fun of investing. I don’t have a cap on the number of positions for my portfolio, and will find a “natural ceiling” as things continue to expand. Wherever that ultimately ends up isn’t something I’m too concerned with right now, instead I’m focused on adding capital and finding value where I can each and every month.

    Added benefit to all of this? Documenting the journey and sharing it with other like-minded investors. Pretty awesome perk if you ask me! Thanks for sharing your thoughts on this Jason.

  24. AlphaTarget,

    Yeah, it’s funny you mention that “putting together your own ETF” argument. My response is EXACTLY the same: So what! It’s an ETF that I can customize for me and my needs, and I won’t be paying a fee for the rest of my life. If ETF investing is so great, why wouldn’t I want to build my own? I just never understood that. “ETF investing is great…but only if you’re not building your own.”

    I’m glad we’re on the same page. πŸ™‚

    Thanks for sharing that.

    Cheers.

  25. KeithX,

    Well, I said “little interest”, not “no interest”. I hold IBM for the reasons I’ve stated before, but you’ll never find my portfolio with a large weighting in technology. I might go as high as 5% on direct tech plays (like your AAPLs, IBMs, etc.), but that would be about it. I just don’t completely understand a good portion of some of the businesses, and thus don’t feel real comfortable with a large portion of my net worth tied up there. Some will disagree, and thus you’d want to weight yourself heavier there. Different strokes for different folks.

    Invest in what you know, indeed. I get beverages, tobacco, real estate, razors, toothpaste more than I get routers and switches. Thus, I have a lot more interest there. πŸ™‚

    Thanks for dropping by!

    Best wishes.

  26. Juan,

    I’m not quite sure what you’re asking there, or if I can really advise or help you. I’m sorry your investments haven’t yielded the results you were anticipating. Sometimes certain companies don’t turn out as expected or things go the wrong way on us. That’s why it’s important to perform the proper due diligence and diversify.

    If you’re interested in investing in individual stocks, I would recommend you start here:

    https://www.dividendmantra.com/getting-started/

    Best regards!

  27. W2R,

    Absolutely. The diversification side of it was covered in my previous article. I tried to cover the time consumption aspect of it here, which seems to be misunderstood.

    But I’m with you all the way on the added benefit of sharing the journey with the community. We’re in the “Golden Age”, my friend. πŸ™‚

    Best wishes!

  28. Mr.
    Jason
    Hello
    I appreciate your response.
    I use GOOGLE TRASLATOR and often the information is different from what you want to convey.
    I will try to read and understand.
    Best regards,
    Juan

  29. What a wonderful post DM, everything you said really resonates strongly with me.

    Like you, I thoroughly enjoy the whole investment process, including the up-front search and identifying value, but my favourite part is refining my own plan and improving my investing β€˜habits’ and behaviours.

    I have just over 20 stocks in my portfolio, and while there’s a few rock solid ones I never need to worry about (only to keep an eye on in case a great opportunity to top-up presents itself), many of them are a little more speculative or turnaround type businesses. But even with these, I just try to create a clear plan of when to sell under a few different scenarios, including if things go as I expect and if they don’t. This way I don’t need to spend huge amounts of time unnecessarily monitoring – or stressing about what to do when something changes!

    I’ve considered whether to put a limit on how many stocks I own, but I think I’m definitely in your camp here – as long as the additions are mostly rock-solid, long term businesses, and you buy them at a good price, it’s a pretty sweet and simple plan!

    Cheers,

    Jason

  30. Jason,

    Thanks, bud. Appreciate the support!

    You’re right. I’d rather focus on value and quality, rather than a supposed ceiling I should place on myself. That being said, everyone has to find their comfort zone as far as what they want to manage. I just hope that this dispelled the notion that managing a large portfolio is somehow extremely time consuming, because it’s just really not. I find it a lot of fun, so I’d do it all the same anyway. But I spend very little time managing the portfolio. Much more of my time is actually spent on the due diligence required for new investments. Once a stock is actually in my portfolio, the occasional checkup is pretty quick.

    Thanks for stopping by.

    Cheers!

  31. Interesting point. My basis in ARCP is under 2% of my total portfolio, so while the recent drop didn’t make me very happy, I’m also barely thinking about it.

    I can either actively get out of it or let it ride and see what happens. Either way, it’s not going to make or save me a ton. I considered adding more in the 9 range, but it doesn’t seem I would get enough of a return to compensate for the risk if I were to add another 1-2k. I’d rather add to a new position in a different REIT.

    I also spend little time managing most items. I probably spend 20% of my time reviewing 80% of my investments, and 80% of my time evaluating the “problem child” stocks as well as researching new holdings.

    I wonder what I’ll do with all my free time once I’m no longer accumulating assets. Maybe I’ll get a job so I can keep investing πŸ™‚

  32. I usually check up on my investments once per year when the annual report is release. Other than that, there isn’t much monitoring. Stock prices might change often, but the underlying business does not. Of course when annual report season rolls around, it can be time consuming reading over 100 letters to shareholders, 10-k files, investor presentation, etc. But I enjoy doing it since it helps me slowly expand my circle of competence.

    I would say I spend about 1 hour per company once a year. But I do spend countless hours researching each company before making a purchase or adding it to my watch list. I just learned how to read 10 times faster so maybe this coming annual report season will be quick.

    Great post as always, cheers!

  33. Hi Jason,
    I enjoy reading your entries and have been a follower since the beginning of the year.
    I finally got my feet wet and started investing with some success and some failure. However, it is important to note that the success came from the solid blue chip companies and I think for the long haul I’m going to continue an investment strategy similar to yours.

    Perhaps an idea for a future post would be how you keep track of potential purchases and when you decide to purchase them. For ex. Do you have a watch list and set an alert if company X reaches a price you are willing to pay for?

    Or also your criteria for selling, although it doesn’t seem that you sell much at all.

    Thanks for your insight and posts! Congratulations also on the engagement!

    – michele

  34. Hi DM

    As you have pointed out, I guess the question really begs whether by owning more stocks, would your concentration in analyzing and valuing them is different than if you concentrated on just the top 10 or 20. Based on your post, it appears that you have the answer and it does not affect you in anyway you do the valuation.

    For myself, I like to own less than 20 stocks concentration as I usually went through a lot of the new financial and corporate announcement for stocks I own, even to the extent of inquiring them from the investor relations to get better perspective on their operations (even though I can’t change any fact). I think it helps to build up my model of valuation when I take all of these extra information into account.

    More is certainly not better and less is certainly not better either. It ultimately depends on our investment strategies that puts us ahead, not the quantity.

    Good post πŸ™‚

  35. DM,
    Some of us like to follow lots of companies, and others just don’t have the time. Those are the people in index funds, mutual funds, or hire a broker (or not investing).

    In prior years, I’d leave my portfolio at around 12 stocks, because I thought that was diversified enough. Boy, was I wrong. 12 is not enough if two go sour, that is for sure. For those that have the time, investing in a number like 50 or more is certainly possible if the stocks are solid growth/income stocks such as the kind you often write about. Aggressive growth stocks need more time and analysis.

    Now that I’m approaching 30 stocks in my portfolio, I feel I can handle them all without an issue. Especially with mobile technology (I’m always reading my phone), and tools like Seeking Alpha as your mention. I get email updates every day and I enjoy getting them unlike most emails I get. At 30 stocks, I now see I have a lot more room for diversification, so the process of building a portfolio goes on. If I every feel overwhelmed, I’m ok adding some index ETFs too, to help diversify. It’s possible my life could change and I won’t be able to keep up with a portfolio. Though not in the foreseeable future, where I’m retired and reading about my investments with all the free time I have!
    -RBD

  36. Ravi,

    “I also spend little time managing most items. I probably spend 20% of my time reviewing 80% of my investments, and 80% of my time evaluating the β€œproblem child” stocks as well as researching new holdings.”

    Sounds like you’re a victim of the Pareto Principle. I personally probably spend 80% of my time on 5% or so of my investments, but maybe I’ve just been lucky. πŸ™‚

    Thanks for dropping by.

    Cheers!

  37. Henry,

    Great comment.

    You just summed up my entire article with this sentence:

    “Stock prices might change often, but the underlying business does not.”

    Bingo! πŸ™‚

    Best regards.

  38. Michele,

    Appreciate the readership very much!

    I may try to write an article on something like that, as far as it pertains to the stocks I watch. I have no scientific system, and as I mentioned in the article, some of this stuff (watching a lot of companies and their values/prices) just takes time to get used to. I don’t set any alerts or anything like that. I can recall off the top of my head what price almost every stock I’m invested in is currently trading at, and I also have a pretty rough idea of what they’re all worth. As far as stocks I’m not invested in, I keep a slightly less keen eye on them, and I analyze/value one when my interest is particularly piqued.

    I did actually write an article on selling dividend growth stocks my very first year of blogging:

    https://www.dividendmantra.com/2011/12/when-to-sell-dividend-growth-stock/

    The quality of the writing isn’t there compared to some of my newer content, but the message is still fairly accurate even today.

    Best of luck with your new investments. I hope you find as much success as me, or even more. πŸ™‚

    Cheers!

  39. B,

    Agreed. More is not necessarily better, and neither is less. Really depends on your investment objectives, risk profile, time horizon, etc. I don’t believe managing a large portfolio of mostly blue-chip stocks is particularly time consuming, but it also won’t work for everyone. πŸ™‚

    Thanks for stopping by and sharing!

    Take care.

  40. RBD,

    Yeah, investing in just 12 stocks takes some guts. I get the potential for outperformance with a concentrated portfolio there, but even the best research can betray you when a company doesn’t perform as expected or markets somehow change. It’s said diversification is the only free lunch we have as investors, and I largely agree with that.

    I’m with you on the SA emails. I enjoy them for the most part. I especially love those that notify me a dividend has been raised. More dividend income is always wonderful. πŸ™‚

    Thanks for stopping by!

    Best regards.

  41. DM,

    I agree that technology is a great way of tracking all your stock and there’s no need for daily review on blue chip stocks (JNJ). I would also argue that Management and the company’s history make a difference. Two of my more speculative stock are CORR and HASI. CORR’s management is Tortoise which is a 16.5 billion dollar company and HASI has a CEO who ran the previously private company for over 30 years. I have an old rule, your company don’t make 1 billion dollars a year or survive for 10 years based on luck.

  42. Hey DM,
    I actually don’t mind spending time looking at my portfolio and reading the news. I feel like I am gaining valuable experience for the future. On my spare time I have also been reading real estate investing books. I have learned that the information in books and blogs have cost far less than my education. I am always open for discussions and perfectly fine with constructive criticism. But overall I think I spend less than 10 hours a week managing portfolio, blog, and reading. I love to be informed so why not take advantage. I could be playing video games all day which to me is a waste of time but people find enjoyment in that. Anyways I did have a follow up question for you from a recent post I had made. I decided I could eliminate some of the more expensive stocks in order to get a better overall valuation without affecting the dividend yield. The P/E for this portfolio is now 13.67 according to MOTIF. I understand that I would still be sacrificing a little bit of valuation like you had mentioned but do you think this is a viable strategy going forward? Would you have reconstructed this portfolio differently or are you opposed to the idea of invested at MOTIF altogether?

  43. I have been just under 40 stocks in my portfolio for a long time but in recent years it has grown to include 4 new names because of stock spin offs. MDLZ, ABBV, ALLE and HYH have all been added to my portfolio and I kept them all despite the increase in “number of individual stocks.” As you mentioned I don’t feel I need to stick to an arbitrary number of 10, 20, 30 or whatever number of stocks for an ideal portfolio. All my companies are big name blue chips and do not consume my time on a day to day basis. While I look at my portfolio at least 5 days a week I don’t spend hours examining each of my positions.

  44. The only downside of investing in 52 stocks is that hard to get out of the market in case of foreseeable market wallop. I know that you’re a very serious long term investor who careless about market swings. Well, you know what they say “All is well that ends well” This year was absolutely good to all of us investors. I hope that this prosperity continues to the next year. Cheers!!!!

  45. Those SA e-mails are such a timesaver! πŸ™‚

    The only thing I really actively monitor are the prices of stocks in my portfolio and on my watchlist, and that’s easily done with one quick glance. Prices are also a great way to tell me if something is going on with the company – the market is so efficient that it reacts almost instantaneously to the news – and that’s when I might decide to do some deeper digging.

    Other than that, I don’t really think too much about solid companies like JNJ or PEP or KMI. I also have no ceiling for how many stocks I want to eventually own. There are just way too many good companies out there.

    And likewise, I find this stuff so fun! It just doesn’t feel like ‘work’ when I’m reading through a 10-K or some financial statement or analyzing a company. I’d do this all day if I didn’t have a job. πŸ™‚

  46. “Managing the portfolio”…
    The nice thing about our kind of portfolios is that blue-chips with great track record tend to be very stable.

    I bet that if you close your portfolio now and open it 30 years from you’ll probably be a very wealthy man

  47. Very similar situation here. Portfolio is currently at 52 differents stocks.

    Top 8 represent nearly 30%: AAPL, KO, PG, INTC, BCE (TSX), RY (TSX), BMO (TSX) and TD (TSX). Don’t care about them, just chasing the dividend every three months. The next eight represent 20% and I’m not spending a lot of time of them too. More time devote to the other 36 companies.

    I had a bad experience with Seeking Alpha but it was fault: I was looking for info on my top companies and Apple by itself generate more information than all other companies.

  48. Nice article. It’s not a burden if you enjoy it. πŸ™‚

    I own 7 companies right now and am guilty of spending way too much time looking at my portfolio numbers. I just want FI today. lol. Waiting for my 30k portfolio to magically become 300k, If only.

    I’m curious. Have you written anything about diversification into the various sectors of the market/economy? I’d be interested to read that.

  49. Hi Jason,

    Thank you! Another great post for sure and very informative.

    In my case, I actually own 10 different stocks with quite a few shares of each. I am not very diversified, but all are rock solid companies that I have owned for quite a while now. They just keep churning the dividend and I keep reinvesting them. I do not check them each day because I am in for the long-haul.

    After reading this post, I am going to consider adding a few more companies in to my mix, just to “spread things” out a little further. For my entry point, I like to purchase between 500 and 1000 shares of the company to get started. Then I will add on the dips to reach my full position.

    Again, thanks for the great post and I will see you in Omaha!

    Ray

  50. Thanks for sharing Jason. Right now my plan is to invest in two Vanguard ETFs for my dividend portfolio. You are slowly persuading me to build my own portfolio. One of my concerns of building my own portfolio is doing a lot of research. All the points you made above makes me think I could manage a strong portfolio without sacrificing too much time.

  51. Currently I have a small portfolio (around $15k) with 11 stocks in it but I feel it’s definitely not enough as there are so many more great companies out there. I’m not sure what I’m going to do next, one part of me wants to diversify further while the other part wants to focus on growing some core holdings (like Unilever, PM and KO).

  52. Great post, DM. Its something that I was concerned about when I first started investing in individual stocks as well. I was so concerned that I had to read every little piece of news related to a company to stay on top of things, I thought I couldnt diversify in more than a dozen companies. As time has gone by, things have become a lot easier – as you mentioned that companies like JNJ – we dont really have to worry about what the CEO is doing and how the drug pipeline is coming along. Things are on cuise control on that front and need minimal supervision.

    Thanks for sharing
    R2R

  53. DM,

    A very good read as always. I agree with you, technology makes it so much easier, and it keeps track of all of the documentation for you. I cannot imagine years ago the mountains of paperwork and daily news paper reads you’d have to dig through to try and get what you need. Even then people probably missed details all the time. Today, it takes 5 minutes and you can get a whole portfolio. I do love SA’s free function to track specific symbols for that, it is a lifesaver.

    I also like to think of it as building my own empire of sorts, like you do. You have a hand in each little industry and business that you own a chunk in. It is fun to know that my slice of ownership, no matter how small, keeps on working for me even when I am not.

    As you said it is great to have a hobby that pays!

    – Dividend Gremlin

  54. Good post! Impressive amount of companies that you have manage to acquire!
    I agree with you, that as long as you invest in stable companies with long history of earnings and dividend growth, you shouldn’t need to monitor your portfolio all that much.

    Monitoring every holding too closely is mostly detrimental, in my opinion, as you are more likely to focus on individual quarterly earnings and macroeconomic factors that most of the time don’t change the long-term prospects of the company.
    I personally don’t sell as stock as long as a company’s future earnings potential doesn’t change considerably.

    Even though I for the most part agree with you, I still have limit my self to about 14-20 stocks in the past, but I think I might revise my my portfolio criteria.

    /Best Regards

  55. Nice writeup Jason. I am glad you provided your long term readers with an update on your reasoning behind expanding past the 50 holdings mark. I am amazed at how diversified even your top 5 holdings are. I am sure this was no accident, but i am impressed nevertheless. I find myself not doing all that much work with my holdings, which for the most part are all blue chip. I just wish my younger self didn’t hold over $30,000 in a savings account earning pennies back when i still lived at home!! The stock market is so intimidating when first starting out. If i would have only known about the safety and yield in stocks like MO, XOM, and PG! Oh well, the good thing is bloggers like you are showing a large audience that stocks aren’t as scary as the majority of our population make them out to be. Keep spreading the good word buddy.

    Cheers.

  56. TBDI,

    Definitely. Technology has made our jobs a lot easier and a lot more fun. And focusing on high-quality companies for the most part means you have time to follow the odd spec play here and there.

    Thanks for dropping by!

    Take care.

  57. I hate “financial advisers” for that reason. Oh, you have a good salary, a good education, a fully baked emergency fund, maxed out 401k, have read dozens of books and 1000’s of articles on the subject. Clearly you aren’t qualified to invest in individual stocks, you should only buy funds and ETF’s for your own good. Here let me show you this brochure! I’ve gone to 3 of them now just to get some different opinions and they were all horrible.

    One thing i have heard is that a good accountant can help you when you get closer to retirement because the laws get tricky. But with the invention of this whole internet thing and the personal finance community i don’t see how even that is a problem if you have the inclination to do your own research.

    Just my 2 cents.

  58. Mongrel,

    Right. I’m with you. I love reading annual reports and following the news as it relates to companies I’m invested in and those I’m also watching. I could definitely think of less worthwhile ways to spend my time. πŸ™‚

    Per your question, I think it just comes down to whether or not you think there are at least 30 high-quality companies all simultaneously trading at an attractive valuation in this market. The P/E ratio isn’t the be-all, end-all of valuation, as you probably already know. So just picking 30 companies somewhat randomly (because actually taking the time to analyze 30 companies isn’t a quick process) based on a P/E ratio is just, in my view, not a great way to go about it. To answer your question succinctly, I’m somewhat opposed to the Motif idea altogether, which is almost a close cousin of just index investing. If you’re really after “instant diversification”, and it seems you are based on your buying habits, you might be better off just buying an index fund or ETF. I think it’s important to be honest with yourself and your goals, and buy accordingly.

    Just my thoughts on it. πŸ™‚

    Best regards.

  59. DivHut,

    Right. Same here. I actually look at my brokerage account more often than I’d really like due to the fact that I’m constantly accessing research tools for my articles. Otherwise, I’d probably check the account out every few days or so. It just doesn’t really consume my thoughts or my time, although I have a lot of fun managing the portfolio when I’m going at it. πŸ™‚

    Thanks for dropping by.

    Cheers!

  60. Young,

    Hmm, I disagree with that. I could sell all 52 stocks in less than five minutes, if I were interested in doing so. But it’s just a hypothetical, because I can’t foresee any situation (maybe nuclear war?) where that would be necessary.

    And I actually hope the prosperity ends pretty quickly here. There’s been some people that have stopped by the blog to point out that I wouldn’t be as successful if the market wouldn’t have been so strong over the last few years, and they’re actually wrong. My dividend income would be MUCH higher had the market stopped accelerating around the middle part of 2012 and we stayed there. Since my dividend income is the barometer for my success and what will ultimately buy me my freedom, that’s what I care most about. But I deal with it and continue to pick out the best values I can. πŸ™‚

    Best regards!

  61. Hi Jason,

    I check my stocks every day, not in any depth, just looking for company releases of information, about half an hour per day, however when looking to open a new position in a company I dont yet own I’m positivly fanatiacal in reasearch, I really fancy a new position in Unilever as my next purchase.

    I have a new project in mind for December….HARDCORE FRUGALITY FOR TOUGH DIVIDEND INVESTORS….I’m going to try and live on 100 quid (160 USD) per month, the funny thing is I still have to spend money out on buying a few items to save money lol. I’ll let you all know in early January how it went, in theory (LOL) I should still be getting fatter and not have to live on grass and melted snow!!

    Cheers,

    Dave..

  62. Seraph,

    Yeah, I’m with you. I find all of this incredibly fun. If I didn’t, I probably wouldn’t invest this way. If this were a big drag for me I’d probably just buy a couple of index funds and be done with it.

    Cheers!

  63. Hemgi,

    Ahh, I can imagine Apple overwhelmed you there. I had a somewhat similar experience with ARCP recently where the emails started coming in fast and furious. But I found it quite manageable. I could delete most of the articles in a few seconds or so and read the important stuff that mattered.

    Sounds like we’re in a very similar boat, though. Managing 52 high-quality companies just isn’t as time consuming as people make it out to be, which is good for those of us who don’t want/need to place an artificial ceiling on our portfolios. πŸ™‚

    Thanks for sharing!

    Best wishes.

  64. Dividend Chick,

    I know how you feel. I was incredibly anxious when I first started as well. It’s tough to do all of the hard work up front by dropping your expenses way down which allows you to put capital to work, only to realize that it’s then just a waiting game. But that’s part of the fun as well. I find the journey pretty amazing, and I’ve learned a lot about myself and those around me in the process. πŸ™‚

    I can’t recall writing an article specifically about diversification in the classical sense, but it seems like something I would have probably covered. I’ve written almost 600 posts now, so it’s tough for me to remember every single one off the top of my head. I can’t think of anything right now, but if I can find something I’ll drop a link for you.

    Cheers!

  65. Khen,

    Exactly. Not much managing going on when the quality is so high. It’s kind of like being a Joe McCarthy for the Yankees – just not that tough to “manage” greats. But you have to put yourself in that situation. You can create as much or as little work for yourself as possible when discussing investing, and I guess maybe I’m just lazy. πŸ™‚

    Best wishes!

  66. Just to add my two cents to your method, I personally use a combination of low cost Vanguard etf’s and at the moment 21 concentrated positions of individual blue chip stocks. My reasons are rather simple. I want the diversification that Warren Buffett has instructed his estate to do with his money after his passing as well as following one of his more famous quotes ” Buy businesses, that if the market closed for ten years, you would feel comfortable owning” Everyone has their own style & there is no right or wrong, but I don’t believe your 50th best stock is as good as your best, and I back that up by saying respectfully, that whatever stock Jason ( or anyone) buys next, will not have the same weighting as JNJ, and there is a good reason for that, it is not the same quality. As many have pointed out here that own ARCP, they have to watch for a dividend cut, a federal investigation into possible fraud and possible lawsuits, but do you worry about those things with JNJ, KO, PG etc? Now this is just my opinion, the same as everyone else has one, but I am a believer in get the best of the best & hit them hard with a good portion of your portfolio ( ones that you can leave for ten years as Buffett says) and use the cheapest etf ( Vanguard ) for the diversification.

  67. Ray,

    Hey, you have to go with what works for you. Having a smaller portfolio in terms of companies (though, not in terms of value) can be a great way to go as well, and can probably outperform a portfolio like mine. But the risk of income loss is something I have a responsibility to my future self to mitigate, and so that’s what I do. I was simply pointing out that it’s not burdensome to mitigate that risk in this fashion.

    If I were purchasing 500 to 1,000 shares of every company, I definitely wouldn’t have 52 positions. I’d probably not even have five. Luckily, technology has made things pretty easy in regards to buying smaller chunks without worrying about costs.

    See you in Omaha!

    Take care.

  68. ThomasDV,

    I’ve always focused on value. Being at only $15k means you’re still early on in the journey. Plenty of time to pick up more companies as you go. I can go back through some of my old Freedom Fund updates, like this one:

    https://www.dividendmantra.com/2012/09/freedom-fund-update-september-2012/

    You’ll see I had $76k spread out across 28 positions. It takes time to build up. The diversification will come. I’d be more concerned about stretching those dollars out as far as possible by buying the cheapest high-quality stocks I could find.

    Best regards.

  69. R2R,

    Definitely. JNJ is running on cruise control, as are many of the companies we invest in. To worry about every minutiae is just not at all necessary or probably even helpful.

    Takes time to find your comfort zone, though. Not everyone will feel comfortable with 50+ stocks, and that’s perfectly okay. Gotta go with what works for you. I’m simply publicizing that it’s not really all that time consuming to manage a large portfolio.

    Thanks for dropping by!

    Cheers.

  70. Miguel,

    It’s a strategy. I’m dollar cost averaging my way into the market as capital allows. I have fresh capital every single month, so I use that capital to buy the most attractively valued and high-quality dividend growth stocks I can find, which builds up my cash flow to further reinvest back into stocks. πŸ™‚

    I hope that helps!

    Take care.

  71. Gremlin,

    Yeah, I couldn’t imagine doing this 20 or 30 years ago. The paperwork must have been a nightmare. I can imagine it was especially difficult for those that were DRIPping dividends for a decade or two…keeping track of the cost basis all the way along. Yikes.

    Technology is a wonderful thing, though. Makes my “job” a lot easier and a lot more fun! πŸ™‚

    Thanks for the support.

    Best wishes.

  72. Steve,

    Well, just buying an ETF or two isn’t a bad way to go either. And for some people, that’s just the better way to go. πŸ™‚

    Not trying to talk anyone into doing any of this. Just doing my best to record the journey as it happens, and setting the record straight on some misconceptions along the way.

    If I didn’t find this strategy more robust and much more attractive for my goals, I’d probably just buy a couple of index funds to “set and forget”.

    Best of luck finding that which works for you. πŸ™‚

    Take care.

  73. Langsiktig,

    I agree with you. Spending too much time managing every stock is not only not helpful, but probably detrimental. You end up consuming yourself with every detail, which would probably lead to a mistake. I just don’t worry about macroeconomic issues or a bad quarter here and there. As long as the long-term story is still intact and I’m confident a company will be earning more profit and paying more dividends a decade from now, then I’m a happy investor. πŸ™‚

    Thanks for dropping in!

    Cheers.

  74. Josh,

    Thanks for the kind words. I appreciate the support! πŸ™‚

    Nothing is by accident. I’ve carefully cultivated the Freedom Fund into what it is today, but the hard work is all done on the front end. Just like building a snowball is tough at the beginning, but it eventually starts to roll itself. Or just like extreme frugality in’t a lifelong pursuit, but a worthwhile exercise in the beginning to really get some capital working for you while also realizing that money doesn’t buy happiness.

    Glad you continue to find value in the posts. I’m doing all I can to motivate and inspire.

    Best regards.

  75. Zol,

    Anything to make a buck, right? I don’t have any personal experience with any financial advisors, but the hearsay indicates that they can be predatory. And that’s unfortunate and unnecessary. The good news is that there’s an increasing amount of information out there which makes it easier and easier for individuals to take control of their finances.

    Cheers!

  76. Dave,

    You’re pretty hardcore, my friend. $160/month is almost free. I bet I could get by on less than $1,000 per month (in personal expenses, not counting the blog) once my student loans are paid off and my car amortization is done, but I doubt I could go much lower than that. Especially with healthcare costs. Looking forward to seeing how that works out for you. Best of luck with it! πŸ™‚

    Cheers.

  77. Brian,

    Right. Ultimately, everyone has to find a strategy that works for them. And using a combination of stocks and ETFs certainly seems viable to me. I’m not a fan of funds for reasons I’ve laid out in the past, but I can also see that they work wonderfully for others.

    That being said, I don’t subscribe to the “my idea #X isn’t as good as an earlier one” notion. Buffett didn’t invest in Coca-Cola until late in his illustrious career. I didn’t invest in Unilever until recently. Does that make it a worse idea than Procter & Gamble simply because one came before the other? I don’t believe so. I haven’t invested in NestlΓ© yet. Does that make NestlΓ© a worse idea than any other stock? Again, I don’t believe so. I think there are at least 75 really great companies out there. What order you buy them in due to valuation, opportunity, capital, or whatever doesn’t make one better than the other. Furthermore, we grow and learn as investors. To say that 10 years later, your 50th or 60th idea isn’t as good as your first would probably be silly when factoring in that you’re probably a better investor by the time that 50th idea came around. Certainly Buffett’s big bet on Blue Chip Stamps wasn’t as good as Coca-Cola? As far as weightings go, I hope to even out most of my positions over time. But I’ll go overweight in a stock when the value and quality (like JNJ) is there, especially with the knowledge that I can later diversify around that position (like I’m doing now).

    Just my view on it. πŸ™‚

    Best wishes.

  78. I think that the hardest work comes at the beginning when I’m doing my due diligence and deciding whether or not I want to own a company for decades. After that, monitoring the health of the companies and their cashflows takes minimal time. In fact, the bit of time I spend keeping tabs of my companies is a nice activity that I can do while sipping some tea.

    Dealing with a company boils down to three options: buy more, sell some or all shares, or just hold. I don’t have to worry about replacing toilets, wondering whether the management company I hired is doing a good job, or if the people around a rental property will decide to burn down their houses.

    In exchange for the incredible passivity (I don’ know if that’s a real word, but you get my meaning) of a DGI portfolio I am willing to accept a relatively low initial yield on cost. As the years go by and my dividend payments increase on their own, that initial sacrifice is well worth it.

    I currently own 42 companies and managing the portfolio is a neat little hobby I enjoy.

  79. Spoonman,

    I’m with you 100%.

    Rental properties are no doubt a great way to build wealth and income. But I’m also willing to sacrifice some return (especially initially) for the more passive nature of the income. I know you guys have some interests in traveling. I imagine it’s a lot easier to travel internationally when you don’t have to worry about what’s going on with a property back home or why the tenants are constantly breaking things. Collecting dividend checks to perpetuate your lifestyle is a lot easier, in my view. Less return, but less headaches.

    I also enjoy this hobby quite a bit. In fact, it’s one of the most enjoyable activities I’ve ever had the pleasure of spending my time on. I’m sure there are some out there that also enjoy owning/managing rental properties. More power to them, but not for me.

    Thanks for stopping by! Hope all is well in the PNW.

    Cheers.

  80. I would love to see your breakdown of expenses, if you decide to try that. However if you live at home with parents, pay no rent & groceries and drive a bicycle, it wouldn’t be relevant to many.

  81. Great way you shared your individual perspective on what investing in 52 companies means. I am going to own about 30-40 companies when I reach FI in the future, as of right now I am more on the index / mutual fund side of investing.

    I understand the analogy to that cutting grass is not fun, but are you a bit concerned over the cost of housing when you are finally FI? A rental today might cost you 700 dollars, but in 20 years it might be 2100 dollars. If you own a home you can control the housing cost and be mortgage free in 15 years. Inflation can take a big chunk from your dividend income.

  82. I currently hold shares in about 55 companies, and there are about 10 more in my wife’s account. Like you, I try to buy quality companies that I won’t have to spend too much time worrying about.

    I did sell some of the dogs from my portfolio earlier this year. Most were companies that hadn’t increased their dividends for a number of years and/or were at risk of a dividend cut. I could have kept these companies in my portfolio and watched them closely, but I didn’t want to spend any more time watching them, especially the relatively small positions. The proceeds were invested in companies already in my portfolio, paying similar dividends with a better history of increases. So I ended up with a portfolio that I’m more comfortable with and can spend less time managing, without much loss of income–seemed like a good move.

  83. Hi Jason,

    Nice portfolio, indeed. All in all, I never wanted to own more than 40 stocks and to my last knowledge I reached 73 great companies. Of course it takes me some minutes to check them up daily, but most of the times, I admit it is totally useless to check the quotes. Since already 2 or 4 months ago (not a good memory of mine), I also have my stocks emailed from Seeking Alpha. This is very helpful. Many times a week, especially when the market takes a hit, I mean when Mr. Market drops, I go for a safari and pick up some pieces. When Miss Market goes nut and becomes too greedy like now, I enlighten some positions, usually selling a half of even good companies, that have reached my soso calculated intrinsic value. But I never sell at market, I always sell with stop-limit orders. You never know how idiotic buyers can be, and I never know If I miscalculated the soso intrinsic value. The more the market goes my way, the more humble I become.

    I am pretty sure that one of these next years you will probably reach around 80 stocks.

    Have a nice week and happy Thanksgiving !

  84. I own less than 20 common stocks, and I’m gradually shifting my portfolio to index funds. I’ve found buying a bunch of dividend payers is more or less the same as buying an ETF of major dividend payers, so I am very careful about replicating an index.

    That said, I like to set the foundation of my portfolio with index funds then target a few common stocks for major wins. I enjoy researching companies and speculating on their future performance, but I only want to do this for 2-3 firms not 30. Going forward I’m trying to shift my portfolio to dead-boring index funds and blue chip stocks, and save my research & due diligence energy for my margin account.

  85. I hold about 160 stocks, accumulated through the years as I buy into different stocks that go on sale from time to time and am loath to sell. Unfortunately, I don’t have time to keep track of them all, so I adopt mostly a buy and forget strategy. Fortunately, most of the issues are high quality dividend stocks like those in your portfolio, so I have little to worry about. I mostly just read the annual reports for my top holdings once a year.

    Small cap stocks are more difficult to pick and they may need closer monitoring, so a bond fund might work better for owning this asset class.

    I think 10 stocks are enough for diversification, not to mention less time consuming, but it is okay to own more than that. At one extreme, Peter Lynch was renown for owning thousands of stocks, but still handily beating the S&P 500 in the process.

  86. Hi DM,

    Nice write up. My portfolio isn’t time consuming at all. Once I bought them I only check the annual reports, I can’t be bothered to read all the quarterly reports. One bad quarter won’t make much difference when you invest for the long run.

    Stocks on my watchlist take up more time since most of them still need some research before I can buy them. But I like doing the research. It feels great when I find a undervalued stock. And it is a much better then wasting my time in front of television.

    Cheers,
    G

  87. You know, one of the most interesting aspects of investing in dividend growth stocks is how little time it actually takes to manage the portfolio. Yeah, I follow each company on SeekingAlpha, but the only things I really read are the dividend announcements. The rest is just noise. Like you said, if you have a core of good-quality stocks, your workload is severely cut. Companies like CL, WMT, and JNJ don’t require really any monitoring, and that frees time to focus on the handful of stocks that we’re not quite sure of. So even though you may have a portfolio of 50+ stocks, maybe only 10% require frequent attention. It actually makes me really happy when I realize I can’t name a lot of holdings in my portfolio. I have so much faith in them and their quality that I literally forget I own them until the dividends come in. Very little stress and time needed with a portfolio like that.

  88. Hi Jason

    Managing a large portfolio is really only a problem if you don’t enjoy the process, as you say it’s fun!

    My portfolio is not very large, but I enjoy checking on half yearly reports, dividends paid etc, and if you are truly investing for the long term you really don’t need to expend a lot of time to manage your portfolio.

    Best Wishes
    FI UK

  89. RichUncle EL,

    That’s a great question there in regards to housing. I actually think renting cheaply and investing the excess funds (the funds you would have otherwise spent on housing in totality if you owned) in stocks is the best way to go in regards to achieving FI as soon as possible, but this might vary depending on where you live. Residential real estate is a rather poor “investment” over the long haul, but housing is simply a cost that needs to be managed in the most intelligent way possible. You say you “can control the housing cost”, but that’s not really true. You can’t control property taxes or insurance (both of which are expenses that never go away) and you can’t control when something breaks.

    And inflation across rentals isn’t something that can be broadly applied. Depends on your rental market, the type of apartment/house you live in, and the broader economy. My rental has barely budged in price over the last three years. We were paying $900/month in 2011. We’re now paying $925/month. That kind of 2.7% increase across three years is something I can easily make up for with increased dividend income.

    For the sake of brevity, fellow blogger James Collins laid it all out:

    http://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrible-investment/

    I hope to maybe address this at some point with a lengthy post, but I can’t really do it in the comments section.

    Cheers!

  90. jd,

    Sounds like a good move there! πŸ™‚

    We learn as we go, and sometimes holdings need to be trimmed or eliminated. I try to focus on quality as much as I can from the start, which leads to less worry down the line. But there’s always a chance an investment won’t turn out as expected or a company won’t behave as predicted, which is why it’s important to diversify.

    Thanks for stopping by and sharing.

    Best wishes.

  91. Bridget,

    Sure, index investing is a fine way to go about it as well. The only issue is that you’ll probably be sacrificing income and you’ll pay fees for the privilege. But for most people, I think investing in a couple of index funds is the way to go. It’s easy to “set it and forget it”, which means you can go about your life focusing on other things, which is especially helpful if investing isn’t something that you have a passion for.

    And setting the foundation of your portfolio with funds means you can spend even more time with those occasional stocks you invest in. πŸ™‚

    Cheers!

  92. Aspenhawk,

    That’s a large portfolio over there. I’m glad that you agree that it’s not really all that time consuming, and you’re managing more stocks than I am. Technology makes this a lot easier than it used to be, which is really nice. πŸ™‚

    I might end up with 80 some day. Hard to tell. I can definitely see eclipsing 70 a few years or so from now. Just depends on where the value is.

    Thanks for sharing!

    Best regards.

  93. Difu Wu,

    That’s a hell of a portfolio there! I doubt I’ll end up anywhere near that level, but perhaps half. Although, I’m confident I could manage it if I really want to…if I found that many high-quality dividend growth stocks all trading at attractive values when I picked them up. More likely I’ll stop before 80, however.

    Lynch was one of the best. Really intelligent guy. I linked to a video of him from the 90s on my last “Weekend Reading” post. Timeless stuff there.

    Cheers!

  94. FI UK,

    I’m with you. It’s not a problem if it’s fun. πŸ™‚

    Long-term investors shouldn’t really feel the need to check their stocks or portfolio incessantly. They’ll still be there tomorrow, you know? Before I started writing as much as I do now, there would be days at a time when I wouldn’t really check the portfolio, its value, or anything. I just lacked capital from time to time, and I would just be busy doing other things. I check on things more now due to the fact that I’m constantly writing about stocks, which is something I’m definitely not complaining about!

    Thanks for dropping by.

    Best wishes!

  95. Geblin,

    Indeed. There are a lot of activities out there that could be argued are much less worthwhile or rewarding (financially and otherwise) than researching and following stocks. πŸ™‚

    I probably spend a bit more time on those stocks that I watch as well, because I’m already familiar with all the companies I’m invested in. There’s quite a few companies on my watch list that I haven’t thoroughly researched yet, and have more or less just taken a cursory look at. But I have a bit more time these days, which hopefully translates into more opportunities to research those I’ve come across that seem potentially quite interesting. Recent investments like AMNF and NOV moved from the watch list to the portfolio after the research was performed, and I’m quite happy with those.

    Thanks for sharing!

    Best regards.

  96. DD,

    Yeah, it’s not as time consuming as I thought it would be. I had just assumed this was incredibly time consuming because that’s what everyone tells you. Then you get around to doing it and you realize that was all just a bunch of noise. Of course, any long-term investor will encounter noise like this somewhat frequently, so it was nice to march right past the naysayers when the time came. πŸ™‚

    Sounds like you’re doing great over there. Keep it up!

    Best wishes.

  97. Great post, buying solid blue chip dividend growing companies will reduce the amount of time you need to monitor those stocks. I really don’t pay much attention to the likes of JNJ, PG, BNS, TD, RY, or CVX. I know they’ll be around for years so why worry about the daily noise? Signing up Seeking Alpha alert is a good idea, I should totally do that.

  98. Tawcan,

    Absolutely. All of these companies are highly likely to still be around for decades, so worrying about the day-to-day stuff is just noise.

    I’d definitely recommend the SA alerts. I don’t always have good things to say about SA, because I think the conversations over there can devolve into child-like behavior, but the alerts are definitely worth the price of admission ($0). πŸ™‚

    Thanks for dropping by!

    Cheers.

  99. Thanks for sharing your experience and tips for managing a portfolio, it’s very important to manage your time while you manage your money and your post drives the point home very well. Personally I would like to know the companies I own well and hence I limit it to less than 20. ( Right now more than 60% of my portfolio is allocated to top 3 investments )

  100. Thanks Jason. I like following your journey. I have 3,784 stocks in my Total Stock Market Index Fund. 5,798 stocks in my Total International Stock Market Index Fund and 6,979 bonds in my Total US Bond Market Index Fund. My only maintenance is keeping my allocation in place. Keep on truckin!

  101. Hari,

    Well, you’ve definitely got to go with what works for you. Investing in 50+ stocks won’t work for everyone, for any number of reasons. If holding a portfolio of 20 or less stocks works best for you, then that’s exactly what you should do. πŸ™‚

    I’m probably in the minority with how many stocks I own and watch. But I’m okay with that.

    Thanks for stopping by.

    Cheers!

  102. Wade,

    There you go. Proof that owning a lot of stocks isn’t time consuming after all. πŸ™‚

    If I weren’t investing the way I do, I’d probably own the same three funds (except for the bond fund until rates rise).

    Best regards.

  103. I think a lot of us would like to see a full article about the day to day mechanics of managing a 50 stock portfolio, the software you, what you rely on your brokerage to provide, etc. I’m sure you’ve got a great system in place for tracking dividends, cost basis, current positions and staying organized for tax time and we’d all benefit from the insight.

  104. So, I have 5 holdings currently as I am just beginning my dividend portfolio. I have 10-15 high quality companies on my list to purchase in the future that I feel completely comfortable investing in. My only concern is purchasing them at 52-week highs or close to. However, since I’ve been following them since June, they have continued to go up. I have 3 months of money saved up, do I expand my list and try to find something at more of a fair price, expanding my list. Or do I just pay the premium for premium companies?

  105. Michael,

    I wouldn’t mind at all putting a post together on something like that, but honestly there’s not much to write about. My brokerage has to track my cost basis and dividends for me, like all brokerages do. A 1099 is generated at the end of the year, and is easily uploaded to TurboTax. There’s really nothing complicated about it. Furthermore, it’s no different whether you’re invested in one company or 100 companies. The paperwork, tracking, and taxes are handled pretty much the same.

    I hope that helps!

    Best regards.

  106. dj_17,

    “My only concern is purchasing them at 52-week highs or close to.”

    I wouldn’t worry about that. Coca-Cola’s 52-week high was once $2.00, right? That’s kind of a tongue-in-cheek response, but there’s some truth there. If a stock is trading at its 52-week high but it’s still 10% undervalued, should you not buy? I never recommend overpaying, but I also don’t recommend anchoring to price. Always look for the value.

    https://www.dividendmantra.com/2014/09/price-and-value/

    I hope that helps. πŸ™‚

    Best wishes.

  107. I only have a handful of companies in my portfolio and I don’t find that time consuming. What is time consuming is managing the portfolio going forward, keeping it balanced, ensuring the correct allocations, reinvesting dividends etc. Whether you own shares in 5 companies or 50, eventually you’ll need to manage the money earned within the portfolio

  108. DM

    As a new investor, do you think it’s more important to try and diversify first or try to purchase solid stocks at great prices. More specifically, I just started investing 3 months ago and bought BBL, ARCP, and UL. Should my next purchase be in a new sector for the sake of diversifying, or is it more worth it in the long run to just buy more shares of BBL since it’s at such a cheap price? at 24 years old, I know I’ll have plenty of time to diversify. Just wondering your thoughts…diversify first or good deals first?

    Thanks in advance, you’ve made a big impact on the outlook of my future.

    DLee

  109. Dan,

    “Whether you own shares in 5 companies or 50, eventually you’ll need to manage the money earned within the portfolio”

    That’s exactly when the fun begins! I wrote an article a while back discussing how I’m building my own miniature Berkshire Hathaway of sorts:

    https://www.dividendmantra.com/2014/10/create-your-own-miniature-berkshire-hathaway/

    Becoming your own capital allocator with a constant influx of capital is the position we all want to be in, and one I’m increasingly becoming familiar/comfortable with. πŸ™‚

    Cheers!

  110. DLee,

    Good deals first. Always focus on valuation. Diversification will come over time as values come and go. What’s a great value today might not be tomorrow, which is why it’s important to snap up shares when they come your way. Then when a stock becomes less of a value, you can move on elsewhere. Your portfolio will likely be 50-100 times its current size a decade from now if you’re consistently investing substantial fresh capital, so worrying about some kind of perfect diversification at the beginning just isn’t necessary. I wouldn’t buy any more of one stock than you’re comfortable with, however. So if BBL becomes too large for you after a few purchases, move on to value elsewhere.

    Best regards!

  111. Great post Jason!

    Several years back, I also used to think that 20-30 stocks would be a good number, however, I’d get closer to 50, which I think is a good number, as each stock on average contributes 2% of weight and loss in one, would be compensated by others and not kill the whole portfolio.

    However, Warren likes to put his mojo only in a handful of companies like WFC, KO, AXP, IBM and WMT, first one almost making up 22.6% of his total assets. He wants to hit big time on his few best ideas and fire his elephant gun on those πŸ™‚ Though, he owns 46 stocks with a total value of more than $105+ billion, but, he rides big time on few trusted horses.

    Best wishes.

  112. PIM,

    I’m in the same camp. I’d like for no one stock to have an overwhelming effect on my retirement income to where one “black swan” type event will sink my retirement ship. I doubt all stocks will be completely evenly weighted at 2% or whatever in real life, as that’s just not really possible. They’ll probably range from 1% to 4%, depending on a variety of factors. But knowing that no one stock is more than, say, 4% of my portfolio and/or dividend income means I can sleep pretty well at night. πŸ™‚

    Thanks for dropping in!

    Take care.

  113. Hi, Dividend Mantra.
    Thanks for another solid post. I really enjoyed the topic (and the comments that followed). I envy your process and your diligence to stick to the plan. While I believe in the dividend growth formula, I still try to mix in a few high growth wildcards in order to help keep things interesting. I’ve been lucky with FB, but haven’t fared quite as well with a few of the others in my portfolio. I do, however, check my portfolio daily because I enjoy watching the swings, but am (generally) immune to overreacting.

    I currently maintain a portfolio of 30 or so stocks and I think I have capacity to get up to 50 at some point. I do think that I would start to max out at 70 as that number seems overwhelming to me at this point. It would probably be much more manageable if I weeded out some of my more volatile holdings. In all, I probably spend about five hours a week doing research on my portfolio, but, like you, I don’t view this as an annoyance at all and actually enjoy the time spent checking in on things.

    Do you have any thoughts on what constitutes a “full” position for you? I’ve lately been trying to focus on getting most of my positions to an initial investment figure of $2,500 or $3,000 because (frankly) I didn’t like looking at the small balances that I maintained in some of my stocks.

    Thanks again and best wishes.

    Goosemann Jones
    Flight to Dividends Blog

  114. Hi Brian,

    I left home 34 years ago lol, I live mortgage and rent free in Bulgaria…Its my intention to add 1/12 expenses to my monthly bill also, so for example my car insurance is paid in September 110 USD but I’ll divide it by 12 to add 9 USD to my monthly costs, I’m not 100% sure I can do this self imposed challenge because it will involve giving up smoking, but going to give it a good try!!

    Cheers,

    Dave..

  115. Once again, I would love to see your expenses report after say 6 months or so. That is certainly a bonus not having a mortgage or rent, but I assume if it is a house, you have repairs, taxes, utility bills etc, so would be interesting to see the breakdown. I’ll be cheering for you for sure as I love to see people set a goal & accomplish it ( or else I wouldn’t be on Jason’s site, would I?…lol) BTW, good luck quitting smoking as you will get far more than just financial benefits.

  116. Hi Jason,

    You really are one of my heroes. You helped me to get off my butt and start to invest in dividend paying stocks during this year. Matt from Dividend Monk was the other excellent blogger who I followed, and his DDM model helped me figure out how to value dividend paying stocks but he doesn’t post much these days, unfortunately.

    Thanks to your support I’ve built up a dividend portfolio that, at current dividend distributions, generates a forward looking $49K+ per year of dividends. Since I’m 41 and continuing to work, I have designs to build this into a decent and sizeable portfolio that generates over six figures a year.. nothing like the monster Mr. Buffett managed to create, but a respectable effort. Thanks much for showing us all the light, and let us be strong and continue building up the snowball when the next bear market / correction hits as it’s an inevitable part of investing and actually a wonderful opportunity .

    May you have a life long career of dividend investing.

    -Mike

  117. Goosemann,

    I can imagine it’s tough for some people to just stick to a certain group of stocks. There’s that temptation there to invest outside of that circle. I get that. I personally don’t share that desire to “spice things up” because I think collecting more and more dividend income is pretty spicy and exciting. πŸ™‚

    A full position changes over time, as the portfolio grows. When I first started, it was $1,500. Now it’s probably somewhere around $4,000. One day, it’ll be $10,000. I don’t really look to make sure every investment is maxed out or the same, as I focus on value first and foremost. But there’s certainly some companies that I wish I would have bought more of when the getting was good. So many stocks, so little capital. A good problem to have!

    Thanks for dropping by.

    Cheers!

  118. Mike,

    Thank you very much. Appreciate the support. It’s kind comments like yours that keeps me writing and sharing. If it were all negativity, I might not still be writing. So thank you!

    Congrats on your phenomenal success! $49k/year in dividend income is just amazing. Even better, that will likely grow all by itself from here, even if you stop adding fresh capital. Dividend growth and reinvestment alone will probably turn that into $53k or so the following year. Great stuff. Since you’re planning on continuing to work and continuing to build out your portfolio, I’m sure you’ll reach six figures in no time.

    Keep up the great work over there. I hope to one day join you in the joy that is $50k/year in dividend income. One day… πŸ™‚

    Best regards.

  119. I focus on high quality blue chip stocks too. That way most of my portfolio is on auto pilot. I only need to keep an eye on a few stocks that might need to be sold. As long as they keep increasing dividend, I figure they are still a good investment.

  120. Joe,

    Auto pilot is the way to go. Just keep adding high-quality assets to the pile, reinvest the income, and that’s about it. πŸ™‚

    Thanks for dropping by!

    Cheers.

  121. Great post, Jason.

    Oh to find a hobby that makes you money! I think you’ve found one of the best ones! At the moment, all of my hobbies cost me money, although if my new home brewing hobby takes off, who knows, I might be able to make some money from it in the future!

    Having only recently started buying individual shares, I’m only at 5 companies. In my head, I was thinking of around 20 max but your post got me thinking – why restrict myself to this figure? I don’t even know where I got that number from!

    Since I mostly invest in index funds, I don’t buy shares every month but I have a plan of sorts so the number of companies will increase slowly but surely.

    I think I’ll be well happy if my dividends pay for one of my hobbies in the future!

  122. Hi Brian,

    Yep will include all utilitys, 1/12 property/local authority tax,road tax, car insurance,firewood etc for a 160m2 house, Ronovation wont be included because I dont use my money for those costs which arnt a lot anyway, I work in an odd job part time kinda way doing driving and building work for people,

    I view renovation as voulantary expenses, not all Westerns here bother modernising their houses but I do, I cant live like the locals and I might at some time in the future sell the house, or not, but either way I need my creature comforts and my toys.

    Cheers,

    Dave…

  123. I’ve read too many stories of wealthy private and wealthy famous people that trusted a financial advisor to manage their wealth only to get that money stolen from them or to actually end up losing much of their wealthy. That’s why I believe in the DIY portfolio and I don’t mind managing it.

    You can go to a fiduciary which is a financial advisor who is legally bound by the law to look for the customer’s best interest instead of their own bottom line but even so no one is going to care as much about your money as you will.

  124. weenie,

    Thanks! I think it’s one of the best hobbies around. πŸ™‚

    There’s no reason to limit yourself to 20 stocks, unless you want to limit yourself like that. It’s funny that the benefits of diversification found in index funds is one of their highlighted features, yet when people discuss investing in individual stocks they’re shamed into owning just a few. I don’t see anything wrong with creating your own index fund, customized for your income needs, quality standards, risk tolerance, and time horizon. Not paying fees for the rest of your life for someone else to manage the fund is just one of the many benefits of doing it yourself.

    Thanks for dropping by!

    Best regards.

  125. Lila,

    Absolutely. If you have any interest and/or skill in managing your own money, that’s the way I recommend to go 100% of the time. Even if you don’t want to be bothered with individual stocks, you can buy into a couple of index funds and be done. Very easy. Very cheap.

    It’s a shame that so many people get swindled, especially with all the information being circulated out there now. It’s easy to do some light reading and figure some of this stuff out, but some people just aren’t interested at all. I’m doing all I can to right that ship and put the knowledge out there. πŸ™‚

    Cheers!

  126. There are 150 or so Dividend champions I would love the opportunity to buy all of them if they are cheap enough (in terms of p/e, operating margin, and book value) at one point or another!

  127. Evan,

    There’s a lot of high-quality stocks on David’s list. I’m not sure I’d like to buy all the champions due to the fact that at least a few of them are relative dogs, but I can also see the day when my personal portfolio holds many more stocks. πŸ™‚

    Thanks for dropping by!

    Best wishes.

  128. Dividend Mantra,

    I got it that you don’t spend much time analysing the companies that you own, but when you do, what information you consider more important to look at? How often you check them? How do you calculate your earnings per stock?
    Thus, do you consider the cost of making these small aquisitions in order to have such a large portfolio? I don’t know how it works in America, but here in Brazil you have to pay a fee for each operation you make, so you would have to pay it at leat 52 times, for example…

    Congratulations for this nice blog!

    Cheers

  129. Tiago,

    You may want to read this post:

    https://www.dividendmantra.com/2014/01/how-i-analyze-and-value-stocks/

    As far as commission fees, I pay $7 per transaction. It adds up, but it’s a relatively small cost when compared to how much I’m investing and what I’m trying to achieve. My purchases are usually around the $1,400 level, which means the commission fees are 0.5%. That’s reasonable, especially considering the fees will largely drop off once I’m done buying stocks.

    I hope that helps. πŸ™‚

    Best regards.

  130. I think, that you are a long term investor, it is not that difficult to manage even 150 different companies. Normally the big ones don`t need to look after in short terms. Even IBM, which has at the moment difficulties need little time to look at. Most of your companies you own shares are American companies and it is quiet easy to get information with the alert service you mentionend to use. For me it is the same. I look at my shares, but mostly I look if they have the right price to increase the stock. I only sell if the company is cutting the dividend dramatically or they donΒ΄t pay a dividend any more. Otherwise there is nothing to do more. As you have more different companies the lost – even with 100% which I never had – is surely annoying, but nothing I really have to worry about. The rest is working fine and will compensate it. So I think the way you are doing is quite well.

  131. olli0816,

    Exactly. Most of the homework is done at the outset, before an investment is made. Once you own a company, very little attention needs to be paid on an ongoing basis. There’s the occasional problem, like I recently had with ARCP. But those will generally be few and far between when we’re talking about high-quality stocks. And that was my mistake to go after something that didn’t have the kind of track record I usually insist on.

    Sounds like you have a great system working over there.

    Appreciate the support! πŸ™‚

    Take care.

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