Well, the time has come to update the Freedom Fund once again as we start another month. The Freedom Fund is my portfolio, and I think it’s aptly named. My portfolio is my way to freedom; freedom from a job I don’t desire to purchase goods I don’t need to impress neighbors I don’t care about. This journey is all about freedom and flexibility. One day, the dividend income this portfolio generates will fully cover my expenses and my time will be completely my own. What could you possibly want to own more than your time?
I’m extremely fortunate that I’m able to post these updates every single month, which shows the power of monthly contributions to investments because of the high savings rate I maintain. It shows how a relatively large sum of money can be built through the power of time, patience and perseverance.
It’s important to keep in mind that while updating the overall value of my portfolio is important for historical reference and for purposes of keeping track of total return, my main focus is on the rising dividend income stream the Fund provides.
I was busy in March!
The original plan was to stay low this past month due to the fact that I knew I’d have to write a pretty healthy check to the federal government as a result of the better-than-expected online income I earned last year. However, March broke all kinds of records in regards to income across the board (I’ll be going over this soon!) and I also decided to finally go back to the car-free lifestyle. This all had the effect of affording me more capital than I originally anticipated.
So I put my money to work (so I eventually don’t have to).
I initiated a stake in T. Rowe Price Group Inc. (TROW) early in the month. Fantastic fundamentals across the board, an attractive valuation, and a special dividend of $2.00 meant I couldn’t pass up the opportunity to finally invest in a company that I’ve been watching for some time now.
Later in the month, I noticed that Bank of Nova Scotia (BNS) seemed to be particularly cheap with one of the best valuations it’s had in the last five years. Couple that with a yield well north of 4% and a dividend history dating back before Abraham Lincoln, and I felt I had to stretch a bit here and add to my position for the first time since initiating it back in February 2013.
Finally, I stayed true to my watch list for the month and bought up shares in Praxair, Inc. (PX). This is just a fantastic company that’s done well for a very long time. They have projects going on all over the world and their business model just reeks of quality. I’m confident in their prospects and wouldn’t mind doubling down if I get an opportunity at an even cheaper price. Count me in as a happy shareholder.
The current market value of the Freedom Fund stands at $188,845.55, which is a 0.7% decrease since last month’s published value of $190,209.32. The portfolio was constrained a bit this month since some of my larger positions performed particularly poor in terms of their stock prices. But it’s largely business as usual so it matters not to me. In particular, Philip Morris International Inc. (PM) and BHP Billiton PLC (BBL) dropped rather substantially over the course of march – both were down more than 10% over the month alone. However, I continue to believe both are some of the best opportunities in the market right now, especially Philip Morris.
I’m extremely grateful that the market has been volatile to start the year. The S&P 500 is basically unchanged year to date, yet it’s been a roller coaster in the meanwhile. And many stocks, like the ones I mentioned above, have been all over the place, which gives those with an ability to separate price and value fantastic long-term opportunities.
I expect to be able to purchase shares in at least one company over the course of April, but I may be lucky enough to stay a little busier. It’s unlikely I’ll deploy capital anywhere close to the level of what I was able to in March since I don’t have a car to sell every month, but I also don’t have a large check to write to the federal government. And lightening expenses looking past May should provide my capital a nice tailwind. I’m excited!
The Fund now has positions in 53 companies. This is an increase since last month since the positions in TROW and PX are brand new.
These updates are mainly designed to show the increase or decrease in the value of the underlying equities I’m invested in, but the main purpose of investing in dividend growth stocks is for the rising stream of dividends over time. Thus, I don’t put too much emphasis on these monthly updates. I think it is a good idea, however, to keep track of the rising (or falling) value of one’s securities and be aware of where they are in terms of the marketplace and whether or not certain stocks are attractively priced. It find it a helpful exercise to update the values monthly. It gives me fresh perspective on which equities are performing well and which aren’t, and from there I can make educated decisions (based on further due diligence) on which stocks I’d like to add fresh capital to (while considering portfolio weight as well).
Full Disclosure: Long TROW, BNS, PX, PM, and BBL.
Did March treat you well? Were you able to put more capital to work than you initially anticipated? Is 2015 off to a great start for you and your portfolio?
Thanks for reading.
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