Portfolio

I am invested in 49 companies as of August 3, 2014.

I will update this once a month, as that is the frequency of my trades. Daily and monthly market gyrations will obviously skew these figures, but this is not an exact science. The weights have been rounded up/down accordingly, so the total may not add up to a perfect 100%.

Total equities value as of August 3, 2014: $164,642.84

Comments

  1. says

    I remember when I first started reading your site, your portfolio value was in the low 5 figures. You have come a long way, and have a very exciting few years ahead, as your portfolio value and dividend income keeps compounding.

    We seems to have a lot of overlap in our portfolio holdings by the way. Obviously, there are only so many quality dividend growth stocks available out there. I am really hopeful that stock prices stagnate or start going lower from here. That way we would be able to allocate a lot of our new capital at much better prices, thus purchasing more future income at a discount.

    Best Regards,

    Dividend Growth Investor

    • says

      DGI,

      Thanks, man. I appreciate all of the support. It really means a lot, as your blog was one of the first I visited and learned from when I started down the road of dividend growth investing.

      Things have come a long way for me. I’m really blessed to have the great support of this community. And I’m grateful that my success and experience can inspire others out there to do the same. Makes this all worth it for me.

      And I’m with you regarding stock prices. When I first started investing in early 2010 the Dow Jones was around 10,500 and now it’s over 16,000. Pretty crazy. I’m hoping we get a decent correction in the broader market which would surely drive down the prices on some of the stocks we both love.

      Keep up the great work.

      Best wishes.

      • Rune Gabrielsen says

        Hi,

        Since I read both of your blogs, I hope that I get to ask you both a question.

        What do you make of Verizon (VZ) at the current valuation? The stock has decreased in value since october, and it doesn’t look as it will stop falling for any time soon. What is the reason that the stock doesn’t perform at all?

        That said, I really enjoy following both of your blogs. Keep up the good work!

        - NorwegianDividendInvestor

        • says

          Rune,

          I can’t speak for DGI, but I’m not particularly enthusiastic about US telecom companies. I’m long VZ, but I wouldn’t want it to be a large position for me.

          There appears to be limited growth here as wireless penetration is quite high. VZ also carries a lot of debt, especially after the VZW buyout, which limits flexibility. And while their fixed line assets diversifies the business, you have to wonder about how they’ll fare as streaming options continue to gain in popularity.

          Their are benefits, however. They’ll continue to be a major player in data consumption as they have a lot of infrastructure in place for both wireless data and fixed line data through FiOS. The hefty dividend is attractive as well.

          Just my thoughts on it.

          Best wishes.

          • Ravi says

            I agree. VZ is a management execution bet. Can they continue to operate efficiently and pay down their debt while investing to keep pace with rivals in terms of fiber investment?

            Debt is scary, especially that much of it, but I believe they will be okay in the long run since they hold an asset that no one else can replicate. It took them decades to build out the network they have today. If you had to start from ground zero, you could not afford to rebuild what they have.

            With that said, I like the company, but not at this price level. Your upside is more limited until the debt is reduced. Unless Google Fiber takes over the US internet, I think VZ (even AT&T, Cox, and Comcast) will have a good run with their wireline assets.

            • Jack says

              I was long in VZ. But, I got out when I realized that I misread the literature and they tapped me for a 5% load to reinvest my “free money.”

              • Mike says

                That’s why you get all dividends paid in cash. Then you can put that money back in for free. A little work on your part…… but instead you cashed out….I do not understand.

  2. David says

    I have a similar strategy but not as much diversification as you. Curious to hear what your avg annual dividend growth has been on your portfolio?

    • says

      David,

      To be honest, I’ve never calculated my annual dividend growth for my entire portfolio. I look at this metric on a company-by-company basis and that’s how I manage my portfolio.

      However, I think it would be really interesting to see what this number looks like. I’ve seen some other investors take a look at that metric. I don’t know if it’s particularly actionable, because dividend growth varies from year to year and company to company, but I think it would still be cool to take a look.

      If I had to guess, I’d bet my portfolio-wide dividend growth is probably in the 8% range or so. Factoring in a portfolio yield of about 3.5% and that would allow for pretty healthy total returns over the long haul, assuming static P/E ratios.

      If I perform this exercise I’ll definitely get back to you with what I come up with!

      Thanks for stopping by.

      Best regards.

      • says

        I became interested in tracking such things. So, I created a simple spreadsheet to start logging this info as of January. I have a ledger for each month that totals div stock purchases and/or sales, along with any change in annual income for a particular stock in the month. At the end of the month, I copy the totals to a YTD summary sheet. The YTD sheet calculates the annual div income percentage increase compared to last year.

        I suppose I need to get a life, but I find it all rather fascinating. For example, as of the end of January our dividend income was up 5.7% (on an annual basis) compared to 2013. Of course, the vast majority of the increase was due to new purchases in January. At the end of the year, I’ll have a nice summary of the progress being made and will know where the money came from.

        My hope is to get my DW more involved in the process. If I can furnish her with a monthly progress report, it might just spark some curiosity on her part.

        • says

          Steve,

          That’s great. I also dig me some spreadsheets. :)

          It would be great to get your significant other involved in the process as well. I think that’s key to success in anything financial, but certainly so with something like early retirement (if you have such an interest).

          And great job on the income increase so early in the year. Being up 5.7% already is awesome. Keep it up!!

          Cheers.

  3. Bill Wang says

    You build your portfolio from scratch, the holding value keeps increasing, which is very encouraging for me.
    I am new in this area(Dividend investing).

    My question -> Once you buy so many stocks, how do you track these stocks underline business and make sure
    they are running good. Or let’s say how you decide you need to sell it. Right now the market is a little bit overvalue,
    do you have any plan to light bit of position?

    Now I am planning to build up the portfolio as you are doing. Do you have any suggestion for me, how to start?

    thank you

    Bill W.

    • says

      Bill,

      I have a lot of great advice for you.

      First, there are a number of great books that you could likely find at your local library for free. Or, you can usually pick them up on the cheap. I listed a number of them here:

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

      As far as keeping tabs on companies, it’s a fairly similar process to analyzing companies from the start. I want to make sure dividend coverage is still solid, and that continued dividend growth is extremely likely. I want to see top line and bottom line growth over the long term. I want to see improving fundamentals. I want to see competitive advantages holding. I wrote about my lengthy analysis process (which is similar to evaluating companies on a running basis) here:

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

      As far as selling stocks, I don’t like to do that very often. I wrote about my exit criteria awhile back:

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

      I don’t like to sell often. If the fundamentals erode, or the dividend is cut or held static would usually force me to take a hard look at a stock and consider selling. I recently did so with Intel because the dividend was held static for 7 quarters in a row.

      As far as selling because a stock is grossly overvalued, that’s a bit more subjective. I don’t really see any stocks in my portfolio that are grossly overvalued. Certainly, you could make an argument that some are a bit expensive, but I’d prefer to avoid commission fees and taxes when possible. In addition, just as with buying I don’t try and time the market. Trying to catch the absolute lows and the absolute tops is a sucker’s game. I thought GD was a bit pricey around $100 – now it’s way higher. I just don’t have the capability to time this stuff. I prefer to collect my dividends, and reinvest into the most attractively valued equity I can find. Letting Mr. Market control my decisions would be a huge mistake, in my opinion. Now, if MCD doubles tomorrow and is selling for a P/E ratio of 38…well, then I’d likely sell. But to me I don’t see anything grossly overvalued right now.

      I hope that helps!

      Best regards.

  4. Jason says

    I really enjoy yourmpost each month! Somawesome to see how a dividend portfolio can grow so fast with contributions and holding dividend growth stocks. my understanding is what makes this type of portfolio good id the compounding intrest or reinvesting divy into divy growth companies who have history of raising divy every year. what can mess up a portfolio like this is if company cuts divy and you have to possibly sell stock and start all ober with another company. Iam in process of starting my portfolio just like yours but i am only buy 25 + years divy increasing companies. i know you have a few of these companies in your portfolio but curious why you dont have all of them? Did you decide to gamble on some companies with a lesser track record of increasing divy? Just curious as i continue to put mine together. Maybe your goals might be a little different than mine….. either way i visit your page almost every day and really appreciate all your post! Thank you so much!

    • says

      Jason,

      I moved to Sarasota, FL. So I’m on the other side of the state.

      As far as the portfolio goes, there’s still many companies that I’m interested in but have not had the opportunity to invest yet because of valuation concerns. For example, Colgate-Palmolive and ADP are fantastic companies that just have not made their way into my portfolio due to being chronically overvalued. But I remain hopeful I’ll one day own a piece of both.

      As far as owning companies that have less than 25 years of consecutive dividend growth, every company with a 25-year streak had to start somewhere. And I’m hoping that a few of the companies I own are future Dividend Champions. :)

      Cheers.

  5. Jason says

    Well i have to say you motivate me to continue to invest in dividend growth stocks. Appreciate your post and i look forward to many more! Good luck friend!

    • says

      Jason,

      Thanks so much. I’m glad you’re motivated by what I’m doing here. That’s exactly why I publish all of this for the world to see. :)

      Keep it up and your snowball will become larger than you ever thought it could be.

      Cheers!

  6. says

    This is not a complaint, just letting you know in case you want to fix it.

    I can’t figure out any way to scroll your table of stocks, and can only see the first 33 lines. I’m pretty sure it would work on a computer, but 98% of my life is spent on an iPad.

    Please feel free to remove this post! (It has nothing to do with your content)

    • says

      Thomas,

      Hmm, I’ve noticed the same thing when I’ve viewed Google Drive spreadsheets on a mobile device. I’m not quite sure why, but the scroll bars don’t always show up.

      I’m thinking of publishing a static page here with a spreadsheet that shows up on mobile devices easier; however, it’s super easy for me to edit and change the Drive spreadsheet on the fly. That’s why I’ve kept it for so long. But if it continues to be an issue I’ll change this sooner rather than later.

      Thanks for the feedback. I do appreciate it, as I’m always looking for ways to improve the experience here.

      Take care.

  7. YoungDividend says

    Hi DividendMantra,

    This is my first post on your blog even tough I have been a reader for a while. I am quite young and just started to invest in quality dividend stocks after investigating several kinds of investment vehicles. Like you, I also used to think the stock market worked pretty much like a casino, where stocks would go up and down and you had to bet on the right “horse”, so reading your blog helped me feel validated that my dividend strategy was not reasonable but had potential to produce sustainable long-term results. I thank you for sharing your journey as it really serves as an inspiration for me and I am sure many others!

    Now, if you don’t mind, I have two questions regarding your portfolio:

    1- You, like many other dividend investors have a heavy position in Philipp Morris. I understand that their dividend is high, they have overall good fundamentals, and a product with a very “loyal” costumer base, but unlike most stocks that most dividend investors like, it looks like it has a high level debt, why are you happy with this level of debt for this particular company?

    2- I am still trying to learn how to valuate bank stocks, any tips or articles that helped you particularly? Both Bank of Nova Scotia and Bank of Montreal look like good undervalued opportunities, I’ve seen you own one of them, did you look at Bank of Montreal?

    Once again, thank you for being such an inspiration!

    Cheers!

    • says

      YoungDividend,

      Thanks for stopping by to comment! Much appreciated. And congrats to you for getting started and not letting Mr. Market bully you around. :)

      Per your questions:

      I don’t have a problem with PM’s debt yet. However, that could quickly change if it continues this way. Management has been open about its decision to leverage the buybacks, and this works as long as its accretive to earnings. Certainly with a huge dividend, the less shares they have to pay on the better. But I hope that as some of their potential growth engines come online over the next year or so (next gen products and e-cigs) they won’t have to worry about taking on debt to buy back shares. They’ve long been a prodigal FCF generator, but things have been a little tight over the last year or so.

      As far as Canadian banks go I like BNS and TD the best. If I were to pick a third it would be RY. I like BNS’s heavy international exposure and TD’s assets here in the US. I looked at BMO a while back and just didn’t see anything that “wowed” me. However, I haven’t taken a good look at the other Canadian banks in about a year now. But I still plan on actively adding to BNS and TD as capital and valuations allow.

      I hope that helps!

      Stay in touch.

      Best wishes.

      • YoungDividend says

        Hey DividendMantra,

        Congratulations on reaching 150k on your portfolio by the way! Thank you for your answers, I’m happy to see that my conclusions are in tune with yours.One thing very important for Canadian banks at this point is international exposure due to the fears they have of the house market cooling off, so I definitely see the appeal of BNS.

        I am considering documenting my progress or lack thereof through a blog as well. Looking forward to see more updates from you and here’s to hoping that in some years my portfolio will reach the numbers you have today.

        Best Wishes!

        • says

          YoungDividend,

          The extremely expensive Canadian housing market is exactly why I like BNS’s international exposure. I don’t know when/if the Canadian housing market is going to burst, but I’d rather hedge my bets with the most international of the Canadian banks.

          And if you start a blog make sure you stop by and let me know! I’d love to check it out. :)

          Best wishes.

  8. Jason says

    Hey youngdividend

    . i looked up the banks you mentioned and they look good. if you dont mind me putting in my 2 cents i wouldnt buy either of those for a dividend growth portfolio because they cut thier dividend when times got tough – recession etc. i have been investing for years but just recently started investing in growth dividend stocks and the way you make money on them is long term. if they cut the dividend in 5 years from now or whatever your basically starting all over. Why not take that money and invest in a good company with 25+ years dividend growth that still increases divy in hard times. the power of a dividnd growth portfolio comes from continued yearly dividend increases.

    just my thoughts …. i am by no means a professional investor. i just perfer stockes that have never cut divy. there are so many 25+ year divy increasers to choose from. good luck my friend!

    • says

      Jason,

      Thanks for stopping by.

      As an investor in BNS, I’m pretty informed on their dividend history. I’m not aware of any dividend cut during the Great Recession. In fact, the big Canadian banks fared much better than many of the big US banks in this regard, as they simply held their dividends static while big US firms cut their dividends.

      Can you please elaborate?

      Best regards.

    • YoungDividend says

      Hey Jason,

      Thank you for the tip, I have other targets as well just like the ones you suggested! The reason why I was asking specifically about the banks is because as part of my diversification strategy I also want some exposure to the finance sector including banks, and in that department, BNS was looking particularly good, together with Bank of Montreal.

      To answer DividendMantra, I was also under the impression that they reduced their dividend in 2005. I saw this information on their website http://www.scotiabank.com/ca/en/0,,3098,00.html

      • says

        YoungDividend,

        Technically, they reduced the dividend because the dividend per share was reduced. However, BNS actually gave a stock 1:1 stock dividend in 2004, so factoring that in you actually received a hearty dividend increase.

        Best regards!

  9. Jason says

    sure you can check dividend history on yahoo finance. BNS reduced dividend in 2009 and did not raise in 2010 right after the 2008 crash. Thats why they ony have show 2 years divy increase on dividend.com. Still a nice divy but i hold 0 banks because when recession hits they are the first ones to reduce dividends. I look for companies that raise dividends even in recessions – 25 year growth dividend companies.

    Not knocking the stock because Dividend Mantra is very successful but what i look for is those dividend champions that have been through multiple recessions.. 911 etc and atill raised divy.

    Hey we are ll smart for investing so i dont think anyone can go wrong here.

    Dividend Mantra i love how you hold so many stocks. do you have a goal of how many you want to hold?

    Thanks everyone!

    • says

      Jason,

      That information on Yahoo Finance is incorrect.

      You can go straight to the source for dividend payouts here:

      http://www.scotiabank.com/ca/en/0,,3098,00.html

      BNS held the dividend static from 2008 to 2009, during the Great Recession. They never cut the dividend.

      However, there might be some fluctuation as the CAD is converted to the USD. But in native currency, BNS never cut their dividend through the Great Recession. They started raising it again in 2011. They raised it in 2011, 2012, and 2013. And that compares very favorably to many US banks that cut their dividends during this time. Of course, many were forced by TARP to do so.

      But I don’t blame you for not holding banks. Many do cut their dividends during recessions due to leverage and the difficulty of accessing capital when things start to get crazy. However, Canadian banks actually have rich histories of paying dividends and increasing them through thick and thin. BNS has one of the greatest dividend records on this planet as they’ve been paying a dividend since 1833.

      FYI, I would always double check what you see on independent sites like Google Finance and Yahoo Finance with the actual companies’ information.

      Cheers!

      • Jason says

        Thanks Dividend Mantra. If i held a bank it would for sure be Canadian! Still love the updates on all your holdings. Such a strong portfolio andnimhope to be there one day!

  10. Jason says

    fyi.. first place i go before i buy a stock is Dividend.com. see how many years they have raised divdiend then go to yahoo finance and look at dividend history to see if they ever not raised divy in a year or reduced it. Just what i do on a stock with good fundementals like BNS. BNS has only 2 year history of rasing dividends. check 2009 and 2010 after market crash to see how they did in recesaion.

    good luck my friends!

  11. Jason says

    Dividend Mantra,

    do you know of a website where you can type in how much you invested in a stock, current yeild, annual dividend growth expected, reinvest divy, number of years to invest nd it will give you expected yearly dividend paynout after X number of years? all the online calculators i find does not give you yearly payout of dividend after X amount of years.

    for example if i buy 3000.00 worth of KO at a current yield of 3.25% and expect divy to grow 7% a year … i invest for 20 years what would my dividend income be on this stock yearly after 20 years?

    you know any web sitea that calculate this for you?

    Thanks Dividend Mantra!!!

  12. Justin says

    Any thoughts on Reynolds American possibly making a bid for Lorillard? I note you have three tobacco companies, but no RAI. An acquisition like that would certainly shake up the industry.

    • says

      Justin,

      Great question.

      Actually, I was already thinking about lightening my investment in LO recently. So this recent takeover news may be particularly well-timed for me.

      I’m thinking of lightening my investment in LO because of the ongoing menthol regulation concerns, as well as my overall high exposure to tobacco in general. I’d like to lessen my exposure to tobacco, and I think LO might make the most sense as it’s been on a great run and there’s that menthol risk. However, I’d hate to let it go because I think LO has a ton of potential. It’s been gaining market share, is now expanding west, and they have almost half of the domestic market share in e-cigs with their popular Blu brand.

      I’m back and forth on it, but if it goes up much from here I might at least sell half, if not the whole position.

      I actually have my concerns as to whether RAI would be able to acquire LO due to antitrust concerns. I guess we’ll see how this shakes out!

      Cheers.

  13. Zach says

    Thanks for sharing your experience with everyone, Jason. I enjoy reading your articles and comments on SeekingAlpha. I thought I read previously that your portfolio is not in a Roth or Traditional IRA because you plan to start distributions at age 40 (so prior to 59.5). I have all my retirement savings in my 401k, and I was looking to see if there was anyway to avoid the 10% penalty if I started to distribute prior to 59.5. I came across the “Substantially Equal Periodic Payments” exception(http://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-Substantially-Equal-Periodic-Payments). My understanding is that you can avoid the 10% penalty if you only withdraw 4-5% of initial balance (annuity factor of 20-25) in fixed increments until age 59.5. It seems like it would make sense for you to put some of your higher yielding stocks in an IRA to reduce your taxes on dividends. I would be curious to hear your thoughts.

    • says

      Zach,

      Thanks for your perspective there on tax-advantaged accounts.

      I actually discussed my reasoning for using a taxable account solely here:

      http://www.dividendmantra.com/2013/08/why-i-hold-100-of-my-equity-investments/

      I do discuss the SEPP option in that post. The thing with the SEPP is that it sounds incredibly complicated. In addition, while there’s a lot of literature on the internet about it I have yet to find a crystal clear case of someone using it for 20+ years and keeping track of all the paperwork. If I really wanted to complicate my life with a bunch of red tape I would definitely look into the SEPP. Fortunately, I’m sane. :)

      I think one’s best option for a tax-advantaged account while still retiring early would be a Roth due to its flexibility. However, there is still little for me to gain from using one so I just keep things simple. I like simple.

      Best wishes!

  14. Zach says

    Thanks for the reply, and pointing me to the article. I especially enjoyed the discussion on the issue by you and the other commentors. Good luck on your journey.

  15. Jake Jacobson says

    Jason,

    Love the website. Particularly enjoy your analysis of various stocks. Was wondering if you’ve given any thought to purchasing Waste Management?

    Jake

    • says

      Jake,

      Thanks! Glad you enjoy the site. :)

      I’ve looked at WM before. Not much I like there. The yield isn’t outstanding, considering it’s basically a quasi-utility. The growth of WM has been rather lackluster over the last 5 or so years. The lack of growth is frustrating, and at this time I’m just not interested. I think there are many other stocks out there with better yield/growth combinations and better risk/reward profiles.

      To sum it up: I certainly love the business model, but I don’t like the business.

      I hope that helps!

      Take care.

  16. Daniel Alcântara says

    Hi Dividend Mantra!

    Why do you have so many companies in the portfolio? I mean, here in Brazil, 45 in individual portfolio companies is a lot of diversification. Ai in the U.S.A. is much or little?

    Another thing, taking a look at your Portfilio, I realized that you do not have a VISA, why?

    Brazilian greetings!

    • says

      Daniel,

      I have as many companies as I do not just for broader, traditional diversification purposes, but also for income diversification.

      I plan to live off of the dividend income my portfolio provides, so I have to make sure that no one company has an overwhelming effect on my income. If I’m invested in 20 companies and one company eliminates its dividend I just took a 5% pay cut. If I’m invested in 50 companies and one company suffers a dividend elimination I’m out just 2% of my income. That’s a big difference.

      As far as VISA, frankly it’s a company that I missed out on. I looked at it when it was under $100/share, but the low yield (around 1% at the time) kept me from investing. That was a mistake, but unfortunately I can’t own them all. I tend to stick with companies that yield at least 2% for the most part, because a super low yield makes it difficult for me to achieve financial independence in the time frame I put forth for myself. So many stocks, so little capital.

      Cheers!

  17. dividend junkie says

    Hi DM,
    Thanks for your blog and all the information shared. I am kind of following the same strategy and feel on a pretty good way to a solid “passive income”.
    Currently I am building a wordpress blog on my little private server at home and I am wondering which plugin you are using for the – I assume – google docs.

    Thank you in advanced,

    Lars

  18. Jake says

    Jason,

    I’m thinking about adding Kraft (KRFT) to my portfolio, and I noticed you haven’t. Was wondering if you’d given any thought to adding KRFT to your holdings?

    Regards,

    Jake

    • says

      Jake,

      I wouldn’t mind investing in Kraft, but I’m not super excited about it as they operate solely in a challenging US grocery market. I prefer international diversification when I can get it, especially with the large caps. They were also loaded down with a lot of debt after the split.

      But the large dividend certainly makes the investment more palatable, and I do quite like many of their brands. Perhaps opening a position in both Kraft and Mondelez might be the way to go so that you get both parts of the legacy Kraft.

      I hope that helps.

      Cheers!

  19. Jake says

    Jason,

    Thanks for the input. I also like General Mills (GIS) and Campbell Soups (CPB), but KRFT is more attractive at the moment. As you’ve mentioned elsewhere, there are certain products that people are going to buy, no matter what … and obviously food is one of them.

    Congratulations on how well you’ve done since starting out. Your dedication to your annual goals and living frugally is truly impressive. Stay with it! Dividend Mantra has become my favorite financial site to visit. I’ve learned a lot from your journey … and you’re only 4 years into it!!! Just think where you’ll be 4 years from now at the pace you’re on.

    Take care,

    Jake

    • says

      Jake,

      Thanks for the kind words. I really appreciate it.

      I’ve worked really hard to get to where I’m at right now, but I’ve also had some luck along the way. And for that I’m extremely grateful.

      I really hope the next four years are even half as successful as the last four. It’s been an amazing ride. I’m excited for what tomorrow brings. :)

      I hope your journey proves to be as fruitful as mine has so far!

      Best wishes.

  20. says

    DM,

    Have you thought about adding to your BP position? It seems like it is very undervalued, and quite possibly already priced as if they have lost a large lawsuit regarding the spill.

    • says

      Brian,

      I like BP, and it’s a fair-sized investment for me here. I may increase it, but I wouldn’t discount the inherent risk. All oil companies have special operational risks, but BP also still has a lot of legal fallout to navigate. I think they’ll be quite fine in the long run, but I don’t know if I’d feel comfortable making BP a core position either.

      Take care!

  21. Josh says

    DM,

    Your blog, and journey are extremely inspiring to me. I started investing 3 years ago at 21 when i was in college, buying positions in both Sirius XM, and Verizion. I let these grow over the last couple years, and realized how cool dividends can be with my Verizon holding. Unfortunately over the last few years, i found myself neglecting doing any additional investing since my original purchases. After stumbling upon your blog a week or so ago, i decided to toss my hat back into the ring and begin investing again. I actually purchased some GE stock yesterday, and will be keeping a watchful eye on KO if it continues to fall in price. Keep doing what you are doing with this blog. It has been a big motivational tool for me, and i am sure it inspires others in the same way! It is fantastic to see a young investor such as yourself accumulate such an impressive portfolio in such a short period of time. Keep it up!

    Josh

    • says

      Josh,

      I’m so glad you’ve found some inspiration and motivation here in what I’m doing.

      I know that anyone can do what I’m doing because I’m nobody special. It just requires desire and will. If you really want it you’ll have it, because you’re going to go out there and do everything you have to do to take it.

      I hope you continue to stop by!

      Take care.

  22. says

    DM,

    I see that you’re invested in both Altria and Lorilard, and from some previous conversation that you like LO due to its e-cig market share. What do you think about Altria acquiring Green Smoke? Would you consider increasing your position, or is your exposure to tobacco already too high?

    • says

      Brian,

      I don’t know if Green Smoke is going to be a game-changer for MO or not, but I do like their partnership with Philip Morris International, which will allow them to market e-cigs internationally.

      However, my exposure to tobacco in general right now is very high. I’m not looking to add to any of these positions at this time at all, even though I find them all relatively attractive for differing reasons.

      Cheers!

  23. says

    Question I currently have a rollover IRA with fidelity and I a few REIT. I’m debating on opening a sharebuilder brokeage account and invest in some dividend stocks like microsoft or buy the common dividend stock using my IRA account with fidelity. Im also new to this whole stock thing. I enjoy reading your blog and congrats on how well your doing with your portfolio.

    • says

      Rick,

      I think the answer to this question really revolves around your ability to save money. If you can fully fund your tax-advantaged accounts and have money left over then you should absolutely open a taxable account and contribute it to that. Although I’m not investing in tax-advantaged accounts due to my rather unique situation, I recommend them wholeheartedly to most others.

      I hope my answer helped. Please stick around, and hopefully you’ll continue to learn and be inspired. :)

      Best wishes.

  24. jake says

    Jason,

    In your portfolio chart above, are you showing the current yield of each stock or is it yield on cost?

    Jake

    • says

      Jake,

      The portfolio chart lists current yield. I don’t track YOC because I don’t think it’s a worthwhile metric. Some people love to track it, and that’s fine. It just doesn’t really do anything for me.

      Cheers!

  25. Jake says

    Jason,

    You’re right, in that it doesn’t really give you a metric upon which you’d make any meaningful decisions. But it is kind of neat to see, for example, that the block of 100 shares of CVX that you bought 3 years ago is giving you a 25% dividend yield on cost.

    Thanks, and keep up the good work!

    Jake

  26. Gefre says

    I am a newbie and reading when I can to further understand dividend growth investing. I’d like to start small, learn while investing small amounts and go from there. Can you point me to a preferred company where you hold & transact your dividend investment? I actually have an account in Computershare on automatic DRIP but may have to stop the DRIP and transfer the funds. Thanks.

    • says

      Gefre,

      Glad to hear you’re just getting started in investing, and you’re actively interested in dividend growth investing. I hope you find it as fascinating as I do!

      As far as the brokerage I use, it’s Scottrade:

      https://www.scottrade.com/

      I hope this helps! And I wish you the best of luck. I hope you stay in touch and stick around.

      Take care.

  27. David says

    Why not just buy Vanguard Dividend Appeciation etf (VIG) and just sleep well at night. Yes, a lot less sophisticated a strategy than yours and a little less income yield, but after playing this game for years and years, I now understand I am no smarter than the next guy. Your thoughts, please.

  28. David says

    Love the discussion from Div. Junkie and appreciate the article from Dividend Mantra. Yes, you make valid points. It is cheaper in the long run to own individual stocks and the dividend is larger (although I could invest in Vanguard High Yield Div. fund over 3%). However, the benefit I find in owning VIG despite the nominal increase in cost, is the ability to take the emotion out of the decision process. I am not a novice investor. I understand yield, payout ratios, etc. However, everyone says they are a “long term Investor” but very few are and most humans including myself are influenced by emotion especially fear. As I look back on the crash when the market went down over 50%, I did not sell but I did not buy more either. I was scared like 95% of the population. Owning etf’s, I did not second guess my decision because I really did not know all the stocks in the index. If I had owned individual stocks, I believe I probably would have bailed out. Hey, I’m human and I understand my limitations. Anyway, no disrespect. Love the website.

    • says

      David,

      Investing in individual stocks isn’t for everyone. And I admire your ability to not only realize your limitations, but admit them out loud. Good for you. There’s nothing wrong with investing in low-cost index funds, and this is what I recommend for most people. I applaud your decision to invest in what works for you!

      Best of luck. :)

      Cheers.

  29. Kipp says

    I understand why you hold all dividend paying stocks in a brokerage account. What about REITs? Why not hold those in a tax advantage account such as a ROTH? The earnings are already taxed at regular rates, and if you are just pulling off earnings until you are 59.5 you can pull out the amount you had contributed to the ROTH. If your earnings exceeded the amount you contributed between when you retire and 59.5 you would have to wait to access the remaining earnings, but I can’t imagine it would be a significant amount especially considering their size in your portfolio.

    • says

      Kipp,

      Well, I hope to not only take advantage of the 0% dividend tax in early retirement due to being under the income threshold, but I also hope to have a low enough income to where my total income is taxed at a rather advantageous rate. Although, to answer your question a Roth would probably be helpful here. However, I’m likely going to cap my REIT exposure to 5% or so of my portfolio. As such, the income they’ll be throwing off will be relatively minor, and even if I pay full tax on the income it’ll be a small amount when compared to my entire income base.

      Thanks for stopping by. And great question there. :)

      Best regards.

  30. says

    At 24 with a fair inheritance, I am absolutely terrified of losing it all playing stocks, and I want to make it grow as much as I can (duh) over my lifetime. I think I’m leaning toward a portfolio (roughly) consisting of 25% S&P Dividend ETF (SDY/VIG/etc), 25% Broad Market ETF (VT/etc), 40% Dividend Stocks, and 10% Individual stocks that I research.
    I have a great job and a lot of time to save and reinvest. What do you think of this strategy? I’m also tempted to follow your model to a T (proportionate to my own funds available) and ditch the ETF/individual stocks idea, being that I am the first to admit that I am not a day trader or finance professional.
    I realize this is a ridiculous open ended question but what do you think? I want to be a passive investor for the most part, at least at this point in my life. Thanks, love the blog, very eye opening to see dividend investing working so successfully!

      • says

        Zach,

        This is a hard question for me to answer, as I’m not you.

        I view index investing as a fantastic way to invest for most people. The fees are generally low, and you get broad diversification all in one fund. However, I’ve also been open to the inherent drawbacks, as there are drawbacks to anything in life. Overall, if you’re interested in a more passive way of investing where you can build wealth while going about your life then index investing, for the most part, is probably the way to go.

        Best of luck to you, and congrats on getting started so early. You’ll be far ahead of where I’m at when you get to be my age! :)

        Best wishes.

        • Zach says

          Thanks so much for the reply DM. On further thought, I’m thinking a good way to go about achieving my goals is to buy some stock in the top 10 holdings of dividend indexes (SDY/VGI) so I can hold them commission free outside of the index while still accruing dividends, and readjust once a month or so (sell when yield is low, current events, etc). Thanks for being a punching bag for questions, sometimes it helps to “think outloud”, and you are really an inspiration for those that are looking to intelligently invest. Thanks, best of luck going forward! You’ve certainly earned a follower in me.

          • says

            Zach,

            Glad you’ll be following along! Much appreciated. :)

            And your idea there – owning the top holdings of the popular funds – is essentially what I’m doing. Why pay fees when you can do it all yourself?

            I wish you luck either way. You’re off to a great start. You really can’t lose with either strategy starting so young!

            Best regards.

  31. Jake says

    Oops. Just noticed I typed “3 Yrs” instead of “30 Yrs.” Although it would sure be great to find a company that was able to grow the dividend that fast, wouldn’t it???

  32. Jake says

    Jason,

    I don’t want to beat a dead horse, but I have a suggestion for you to consider. You might want to add a column to the above chart that shows your yeild on cost. Case in point, take a look at Medtronic. Right now it’s showing a yield of 1.82% above … but by your philosophy you most certainly never would have purchased it with an entry yield that low. Your entry yield was probably at least 3% … not to mention the fact that your current yield on cost may be even higher than that due to dividend increases. To folks just glancing through your portfolio, they may wonder why your invested in such a low yielding stock when you normally wouldn’t consider a stock below 2.5%. Those of us that follow you regularly know the real situation, since you bought Medtronic at a price much lower than the current price. Anyway, just something to think about. Just a suggestion from a serious fan of your site. Keep up the great work.

    Jake

    • says

      Jake,

      Thanks for the suggestion!

      However, I’m still resistant to it because I think YOC lulls one into complacency. For instance, if I thought MDT was vastly overvalued with a very low yield, but I was busy looking at an impressive YOC, I might decide not to sell it for a higher-yielding, better-valued stock. And that decision would be to my detriment, because although a YOC might be impressive, current yield is all that matters. One cannot pay their current bills with YOC, but only rather the current income one is receiving from a stock. And if another holding could provide much more income, even at the expense of a lower YOC, then that’s what one should be focusing on. Just my thoughts on it.

      Cheers!

  33. Brian says

    Hey DM, I started investing in dividend stock last year and made a poor decision with buying SONY and STAPLES. I’m currently at a 6% loss but I do not plan on selling and holding onto for the long haul. I am worried that STAPLES might be a future sell due to online competition. What do you think DM? I would really appreciate your opinion on the matter. Also have you considered DUNKIN DONUTS? Everyone and there mother goes there. I feel they will continue to grow at a rapid rate. Thanks
    Brian

    • says

      Brian,

      Sorry to hear of your troubles there. However, I really can give you no beneficial advice in regards to those particular companies (Sony and Staples). I simply don’t follow them, and anything I could say would just be uninformed. And I only choose to speak on things that I know I’m personally informed on, and only when I think my thoughts are worth the time to read.

      However, Dunkin looks very solid. But the valuation would have to fall pretty significantly for me to be interested, either by a price pullback or significant increase in earnings. The P/E ratio is simply too high right now for me to be interested, and consequently the yield too low. I love the business, but I’m not a fan of the stock here.

      Thanks for stopping by! I hope you stay in touch. :)

      Take care.

  34. Dodie says

    I am just now opening a brokerage account with Vanguard and using your latest suggestions for three funds that are at generally good prices. However, Vanguard said it would take two days to get the funds from my bank account in order to complete the purchase. Is it a good idea to keep cash in the brokerage just in case something good comes up and one would want it right away? How does this work. I can call VG tomorrow, but I would like you input. Thank you for all your good advice. I wish there were more “good” bargains right now.

    • says

      Dodie,

      It’s probably not a bad idea to keep the cash in the brokerage account if it’s earmarked to be invested anyhow and you don’t need the cash. This is generally what I do. Once I get my big commission check for the month I generally transfer over what I think I’m going to invest, and that way I’m ready to pounce. However, it’s not a real big deal for me because my transfers are generally performed immediately. There’s no two-day delay. If that were the case I’d be even more diligent about getting the cash over.

      Happy investing! :)

      Take care.

  35. Clint says

    I haven’t seen you mention anything about OGS starting to offer a dividend. I know you were planning on holding onto the stock for a bit before you decided anything. Does the dividend offer make the issue of holding it more attractive?

    • says

      Clint,

      Great question there.

      I was going to keep OGS anyhow because it’s such a small position and paying $7 to sell doesn’t make sense. However, the dividend, along with management’s desire to grow it 5% per year for the foreseeable future, allows me to hold with much more conviction.

      So I guess I’m no longer a shareholder by accident, but rather choice.

      Cheers!

  36. says

    Hi DM!!

    amazing site, and nice portfolio. Last year, in my 25th birthday I decided to start a dividend portfolio just with spanish stocks (I come from Madrid). Now, I wanted to add new US stocks to my portfolio, and looking for some information, I discovered this amazing site.

    I also started few weeks ago a blog in which I want to share all my dividend strategy with all the people who wants some information about dividends (if you want to add some spanish stocks to your portfolio you can take a look: http://divindependencia.blogspot.com.es/)

    Can you tell me a recommendation for my first US stock purchase?

    Cheers!

    • says

      Fernando,

      Man, so glad to hear you’re starting so young. That gives you a huge advantage on so many others out there! Time is a huge reason that long-term compounding is so powerful and effective, and you certainly have plenty of time on your side (as the song goes).

      And another blog! That’s really fantastic. I’m really inspired by you guys going out there and grabbing life by the horns and then having the fortitude to document it for the world to see. Best of luck with that! :)

      As far as your first US stock purchase, I feel the following offer a nice blend of value, yield, and quality right now: PM, KMI, BP, and O.

      Take care.

  37. Ricky says

    Hi Jason

    I follow your blog since few months.

    I would just report the site of a French investor, Philippe Proudhon, who started it in 2009, week after week, just after the 2007-2008 crisis . His nickname ” l’investisseur heureux” , the happy investor.
    See this link http://www.devenir-rentier.fr/ (i.e “Become annuitant”)
    and the income from its currents dividends
    http://www.devenir-rentier.fr/uploads/2_2014-04-17.gif
    and
    http://www.devenir-rentier.fr/uploads/2_2014-04-17bis.gif
    2000 euros per month is approximatively $ 2,700 !

    He updates its portfolio every week and his blog is followed by many francophones.

    For your information, one of the topics was the particular psychology of investors over the long term for an early retirement; a lot of them are INTJ according to the Myers-Briggs test .
    http://www.devenir-rentier.fr/viewtopic.php?id=598
    http://earlyretirementextreme.com/does-early-retirement-require-a-specific-personality.html
    Have you ever done this test ?

    Rick from Guadeloupe (French West Indies)

    • says

      Ricky,

      Thanks for the links there. I’ll have to check those out! Always good to see other investors from around the world chasing after financial independence and doing very well in the process.

      And I’ve never taken the personality test. I hear INTJ is very popular for this type of lifestyle, as many people over at the ERE forums confess to being INTJ. I should take the test and see where I come out. :)

      Best regards.

  38. says

    Hi Jason,

    Have you considered adding to your IBM position? It keeps popping up as decent value on any screen I seem to look at. Although, I am aware that its low yield is not a plus point.

    FI

    • says

      FI,

      I definitely like IBM, and I still think it’s attractively valued. However, I don’t like tech as a sector and as such plan on keeping a relatively small exposure to the sector. It’s not that I’m not a fan of IBM, but rather I prefer other companies and sectors. Once my portfolio grows a bit from here I’ll probably have some more room for tech and may add IBM at that point in time. If tech is under 5% of my portfolio I’m happy.

      Best wishes.

  39. Dividenden-junkie@gmail.com says

    Actually a Good question in regards to IBM. Isn’t it the fact that they increase dividend quite often and buy back shares aggressively over the last couple of years. Personally I am waiting for the next pullback to get hold of some more shares.

  40. says

    Jason,

    It’s been awhile since I’ve commented, but I’ve been following along and enjoying your journey. As a piece of advice, given that your portfolio is held in the taxable account, you should consider swapping the RDS.B shares for the RDS.A shares… From Morningstar…

    “So which should you own? The Portfolio has held the Class B ADRs for simplicity’s sake, but the value of avoiding withholding tax depends mainly on whether shares are held in a taxable or tax-deferred account. In a taxable account, the value of the Dutch withholding tax can be recovered by use of the Foreign Tax Credit on the shareholder’s Form 1040. With the Class A ADRs trading at a 6.7% discount to the Class B on April 11 and the dividend rates being exactly the same (both are paid in U.S. dollars), this would allow a Class A shareholder to realize a higher yield (5.1% versus 4.8%). But in a tax-deferred setting—IRA, 401(k) plan, Roth account, and so on—foreign withholding taxes can’t be recovered. Even with the Class A ADR trading at a discount, the current yield net of the withholding tax drops to 4.4%, making the Class B ADR considerably more advantageous to own.”

    Hmmm… Looking at it now, it appears as if you’d have some tax consequences… Something to think about though and if you’re going to acquire more shares, make them the A class!

    Best of luck!!

    Selling Theta

    • says

      Selling Theta,

      Hey, nice to see you around here again. Long time, no see. :)

      That’s interesting info there on Shell. I was aware of the information, but I believe when I bought the difference between the two share classes was less. It seems they converge and diverge every so often. It’s weird, and I don’t know the exact reason for it.

      However, something else to remember is that I’ve heard that the RDS.A shares prefer scrip dividend payments for some reason.

      Thanks for stopping by. Hope all is well!

      Best regards.

  41. says

    Hi Jason,

    Great site. I don’t remember exactly how I came across it, but its one of my favorite reads now.

    I wish I had started DGI at your age. I’m 54 and I just got into it a few months ago. Fortunately, I had been heavily into other types of investing, so I have had a good time building a DGI portfolio with those funds. I’ve discovered that DGI is quite addicting. I find myself trying to scrape together any cash I can to purchase more companies, and I read as much as I can from good writers like you.

    Keep up the good work. I’ll be following your articles and comment threads closely.

    Tom

    • says

      flare Master,

      So kind of you! Glad you found my humble little spot, and I’m happy you enjoy it. :)

      As you know, it’s never too late to start. It’s great you’ve got some funds with which to work with already. Good luck building your snowball. Although your hill may be shorter than mine, it sounds like you’ve got a healthy pile of snow to work with!

      Best wishes.

  42. Mack Daddy says

    Congrats on the great progress! I have a similar objective of early retirement with a different approach so this is very interesting. A couple of questions that have bounced around in my head since I first saw your blog….sorry if I missed this info on the site.

    1. What is the average dividend yield for your Freedom Fund? At quick glance it looks to hover around 3%-ish.
    2. What are the reasons for choosing individual stocks instead of a dividend fund or index? Seems you might have lower costs (commission, etc.) and greater diversification.

    Good luck with it!

    M a c k

  43. JK says

    Thank you for the great blog and inspiration, and I like how methodical you have been in tracking income and expenses. Sometimes as a reader I forget the day to day frugality you live and focus more on your great portfolio and dividend income. Could you do a couple of posts to remind me of the way you manage to spend so little of your income and still enjoy life?

    I have a wife and new baby, and for some reason we never live that frugally, although everything is paid off except our house, and I have a small stock portfolio. Should I try to go cold turkey ultra frugal, or take it in stages? How can kick-start my savings rate?

    One other question I have relates to how much you monitor your companies. Doesn’t that take a significant effort to check and make sure they are all growing? When will you sell a stock?

    • says

      JK,

      Thanks for the kind words. I really appreciate the support!

      And I should put something together here on frugality pretty soon. I used to write much more about it, but it became kind of repetitive. I haven’t really talked about balancing frugality and quality of life in a while. Thanks for the idea! :)

      As far as how to start, I recommend going all in. I don’t believe in screwing around and cutting a little here and there. Either you’re ready and committed, or you’re not. There is no middle ground, in my view. I started by selling my car, and then moving to a cheaper abode a few months later. Then it was ramen noodles. Some might recommend slowly cutting back, but every day you’re still spending too much is one less day of eventual freedom.

      Monitoring my portfolio is quite easy these days with technology. There’s a multitude of tracking tools that you can use to email you alerts about companies, including changes, earnings reports, dividends, etc. I use Seeking Alpha, but it’s one of many. I typically get 50-75 emails per day relating to my portfolio, which take a few seconds each to scan and get the general gist. Of course, I also receive probably 100 emails per day relating to the blog, so I’d say monitoring my portfolio is easy compared to managing the blog. :)

      And selling stocks is something I just try to refrain from. Unless a stock is grossly overvalued, the fundamentals are changing or have already changed, or the dividend is held static and/or cut, I typically continue holding. You’ll notice I rarely sell stocks, but will if there are good reasons. For instance, I recently sold Intel in two lots because the dividend wasn’t raised. I’m looking for my income to keep pace with inflation at the very least, and a static dividend isn’t going to cut it.

      I hope this helps!

      Cheers.

  44. Dydra says

    Jason,
    Do you track how much of your cash you have invested since you started your journey to your freedom? Just curious. I see that the total cost basis is $126,455, but it includes reinvested divvies, right?

    • says

      Dydra,

      I don’t track that amount specifically, but I can look it up. That cost basis includes not only received and reinvested dividends, but also reinvested capital gains. I’ve never taken money out of my account to use elsewhere, so the capital from every stock sale gets reinvested into another stock. Last I looked, I’ve invested around $105k or so. It’s likely a bit higher than that now with some recent investments I’ve made.

      Best regards!

  45. says

    Hi Jason!

    First thanks for an amazing blog, you are a true inspiration.

    How come you only have US stocks in your portfolio?
    Two good dividend stocks I own out of US is H&M (Sweden), Betsson(Sweden) and Fortum(Finland).
    Do you think the currency risk is to high? I live in Sweden so I have a mix of stocks in Swedish Krona, Euro and dollar, hard to stay only to Swedish stocks since our stock market is very limited compared the US when it come to diversification.

    Best Regards
    Robin

    • says

      Robin,

      Thanks so much! I appreciate you stopping by from Sweden. It’s so fantastic to have readers from all over the globe. :)

      And I do actually own quite a few stocks from outside the U.S.: BNS, BP, BBL, VOD, TD, and RDS.B are all foreign companies. Furthermore, many of the companies I own receive a significant chunk of their revenue and earnings from abroad, and some, like PM, even receive 100% of their revenue and earnings from abroad. But I’m not opposed to increasing my foreign exposure in the future.

      Please stay in touch! And congrats to you for taking your wealth seriously.

      Best wishes.

  46. Dydra says

    You know, I’m kind of surprised that you don’t track how much of your hard earned cash goes into investments considering that you track income-expenses to a dollar (or is it a penny?). OTOH, if you strictly invest what’s leftover after paying your monthly expenses then it should be pretty easy to tabulate on your income-expenses file. Anyway, great job and good luck.

    • says

      Dyrda,

      I don’t track it only because it doesn’t have any impact on my goals. But I can pull it from my Scottrade account anytime I want. Ultimately, it’s my frugality and dividend income that will get me to where I want to go. Of course, my investments are powered by savings, but tracking the amount of my invested capital on a regular basis provides no actionable results.

      Thanks for the well wishes. I can only wish you the same!!

      Cheers.

  47. KeithX says

    Jason, I have concluded that you follow all of the comments on your blog, which is really very cool. And you take the time to respond to them, which is awesome.

    I was just comparing my wife and my portfolio to yours. Ours has 49 stocks; yours 46. We have 17 stocks in common. The stocks that we both own are (with rank in our porfolio): 1 PEP, 2 PG, 3 CVX, 4 JNJ, 5 T, 8 KMI, 12 TGT, 20 MCD, 21 KO, 22 BP, 23 VZ, 24 AFL, 29 WMT, 32 BAX, 39 GE, 46 O, and 47 ARCP. Just to give you an idea of how our money is spread out, our portfolio is 33.3% in the top 10 holdings, 33.4% in the 11th thru 24th holdings, and 33.3% in the last 25 holdings. Not that I planned it that way, that’s just what it is today. Our largest holding is 3.9% of the portfolio, the smallest is 0.2%.

    It’s crazy that you already have a portfolio that’s a third the size of ours at your age, but I have a pension (God willing and the company doesn’t go bankrupt!) that I have been contributing to that will max out when I hit age 58 next year. When I was young, we all counted on having a pension. Now, the company that I work for doesn’t even offer pensions (mine is frozen except that the age reduction factor which is eliminated at age 58, but nobody hired after 2003 got a pension at all). Man, it would have been nice to have retired at 40! I really like your retirement plan and hope that it works out. You are doing an excellent job managing your dollars. ;)

    • says

      KeithX,

      I do follow all of the comments. And I’m glad you noticed that and appreciate it. It takes a lot of time; I probably spend 2-3 hours per day responding to comments. But I really enjoy it! I feel like we’re all family here. :)

      And that sounds like a fantastic portfolio! I’d love to hear about some of the other positions that are large for you that we don’t share. For instance, what’s in the #6, #7, and #9 spots? I’m always interested in new ideas, although I’m actively hoping to get some great companies in my portfolio at some point, like: ADP, CL, GIS, and BDX, among others.

      Glad to hear you still have your pension to count on. A frozen pension is better than a pension that magically disappeared because there aren’t sufficient funds any longer. Combining that with your portfolio, SS for you and your wife, and you two should be more than fine. :)

      Best of luck and keep up the great work!

      Cheers.

  48. KeithX says

    Thanks, Jason. Yep, the pension is nice, but it will lose real value the minute I retire. In other words, while the dividend income increases (hopefully faster than inflation), the pension never will, so will lose value at the rate of inflation.

    Okay, so the other top positions are: 6 MA, 7 AAPL, 9 SBUX, 10 UL, 11 MAT, 13 BDX, 14 KRFT, 15 COST. I love MasterCard’s business model (low expenses, get a fee for all transactions). Apple I bought at $350 a share and have done great. StarBucks and Costco, along with Nike, pay low dividends, but are faster growing and I hope that pays off in the long run. I picked up shares of Unilever, Kraft, and Mattel within the last year when the market sold them off and they were cheap. My only mistake was not buying more because they are all up over 10% since then. And I used to work for Becton-DIckinson. I keep shares of BDX and Baxter International because I know the business of medical devices is just as good as pharmaceuticals, just a lot less glamorous and gets less press. But surgeons still need scalpels, patients need ventilators, etc. Of the two, BAX pays a higher dividend yield (2.6 vs 1.9%), but both are great companies.

    We have a lot of the dividend communities favorites, too, such as KMB, KO, MCD, and WMT. I think where my wife and my portfolio differs is a couple of ways. We have 7 growth stocks that don’t pay dividends, such as Google and Chipotle. They probably aren’t worth your time to investigate, but we keep small positions in them because we (a) know and love the product, (b) the growth rates are very high, and (c) we picked up shares at a decent price. We also have the higher growth/ lower dividend stocks like the ones I mentioned before that might be worth your time. SBUX in particular sold off even though the fundamentals are fine. After initiating a quarterly $.10 dividend in April, 2010, it has been raised ever year and is now at $.26.

    One last idea, I just initiated a small position in Cracker Barrel (CBRL). I know, right, Cracker Barrel? The company just raise the dividend by 33% and it yields over 4%, they have repurchased half the outstanding shares since 2002, there are only 627 stores that they are adding slowly (if I remember correctly, management wants to get up to 1500 eventually). I think that the raise in dividends is to pacify an investor that holds 20% of the stock, and that it is in lieu of stock repurchases (they don’t want his stake to grow any larger), but I’ll take it. Analysts expect over 10% annual growth for the next 5 years (additional stores plus same store growth), and if the dividends increase at the same rate, the YOC will be over 6% in 2019! It’s a small cap, though, which means more risk.

    Ya gotta love all of the choices! Happy investing!

    • KeithX says

      And duh, we also have GIS. I would like to add CL and CLX, but they do not look attractive at today’s prices. I never considered ADP, will have to look into that.

    • says

      KeithX,

      Thanks for sharing that!

      Great choices there, and I’m actually becoming more and more interested in stocks that pay low dividends now, but have great potential for growth later. Stocks like BDX, COST, SBUX, NKE, V, WFM, and DIS would fit the bill here. The only issue is timing, because now with some changes in my personal life I’m in need of current dividend income more than ever. So it’s an interesting dynamic there, and I’ll see how I can balance out the need for reinvested income now, vs. potential for greater growth later. I think SBUX in particular looks good.

      And CBRL is really interesting. It’s funny you mention that company because I actually meant to look at it after I read about the dividend increase. And, of course, I totally forgot about it! I’m not a big fan of the food personally, but who cares? It seems like a fantastic dividend grower. I wasn’t aware of the big stockholder. 20%? That’s quite unusual, unless it’s some kind of family member or something. I’ll have to take a look. And I’m actually interested in smaller companies right now because I’ve got a whole stable of large caps that provide the foundation of stability for me. While TIS, for instance, was a risky play, there are many smaller companies that are still stellar performers with lots of room to grow like CLX, CHD, and SJM.

      Thanks again for sharing that. Great stuff. :)

      Best regards.

  49. Heim says

    Great blog here with lots of info. I’ve been starting to invest in DGI as well and I’m shifting my index funds into a DGI portfolio since I prefer the do-it-yourself feel. I like creating graphs and spreadsheets and seeing how my ideas work out :)

    What is your take on Wells Fargo? (WFC). I have been eyeing this one for a while since the PE (12.2) is quite low compared to its historic average before the 2008 crisis. It appears severely undervalued.

    They did lower dividends during the housing crisis but they have recovered very well compared to other banks. It has a beta of 1.05 so it’s more volatile than say JNJ or MCD but I guess that’s the risk with going with a bank. It does have a A+ credit rating so it’s not like it’s a small bank.

    The dividends are high at 2.9% and growing. They seem to be trying hard to restore it back to pre-2008 levels. The PEG looks alright at 1.21 compared to other banks. Ever since Jan 2011 the stock price has been lower than what it should theoretically be with its high earnings if one believes in the Peter Lynch earnings line. I don’t believe in following others without first doing research, but Warren Buffet seems to take a liking on this one recently.

    Curious thoughts for your next investing ventures.

    • says

      Heim,

      Glad you found the blog and enjoy it so far. I try to make this a great place to hang out! :)

      As far as WFC goes, I’m a huge fan. It’s one of my larger positions, and I was buying it up when it was a bit cheaper than it is now. Although, I still think it’s attractively priced. However, one always has to be careful around financial stocks and banks, because they’re so closely tied in with the general economy. Recessions can hit them quite hard.

      That being said, WFC is the strongest large U.S. bank from everything I’ve read on the subject, and I’m a fan. And from what I remember, they only cut the dividend because they were forced to. They were financially sound at the time, but due to government intervention in the financial system the dividends were cut. And they’ve been aggressively raising the dividend ever since. I anticipate very robust dividend growth for the next few years from WFC as they normalize the dividend, earnings grow, and the payout ratio remains low.

      And Warren has actually had a large position with WFC for quite some time now. And if it’s good enough for W.B, it’s good enough for me!

      Cheers!

  50. Christopher Holland says

    DM,

    How do you respond to people who point out the appearance of hypocrisy when you claim a dedication to health and fitness while one of your largest investments is in a tobacco company?

    • says

      Hi Christopher Holland,

      May I jump in here? From my point of view it comes down to capitalism. I do not mind if people want to smoke, eat junk food etc. as long as I am making money out of it it is fine for me. No one is forced to smoke or eat junk food, therefore my holdings just fulfill the requested supply. Personally I am trying to eat healthy and exercise a lot, probably not enough but still I am giving my best. Unfortunately I have one weak spot which is chocolate and checking the current price of Lind Sprüngli shares I assume someone is making lots of money out of it.

      Cheers,

      Lars

    • says

      Christopher,

      That’s a great question there.

      I’m a big fan of personal liberty. Although I choose not to smoke, that doesn’t mean that choice is right for everyone. People tend to have this idea in their head that however they live is how everyone else should live. I say live and let live. If someone chooses to smoke, more power to them. It’s a legal product. And if I can profit from that decision, then that’s my right. The risks involved with smoking are well documented and everyone is aware. If people choose to take those risks, then I’ll gladly try to participate in the reward.

      Cheers!

  51. Ray says

    Your portfolio is quite impressive Jason!

    I have an “off topic” question.

    When you are “saving” for a new purchase, where do you let the money sit? Is it in a savings account or???

    I am actually considering using Betterment as a savings vehicle for my new investments, and just wondered what you, or some of the other posters here do? I like to save at least $2000 to invest in a new position. But I hate to let the money sit where it makes 0.01% interest!

    What do you do?

    Thanks, Ray

    • says

      Ray,

      Thanks so much. Appreciate the support!

      As far as your question goes, I’ve historically kept the cash either in my checking account or my brokerage account. Obviously, this is earning little to no interest. However, the period between receiving enough cash for a purchase and actually purchasing was typically quite short. I would get my one big commission check from work, and then within days or so I’d be buying stock. However, now that things have changed a bit since I’m focusing 100% on writing I may need to shift my strategy a bit. We’ll see.

      What does Betterment offer in terms of short-term interest on cash? I never really felt the need to worry about the interest on cash for purchases since we are talking about a week or two at the most, and it’s a relatively small amount of cash.

      Just make sure to not lose your liquidity if you’re trying to maximize interest on the cash.

      Cheers!

  52. Ray says

    Well, check out betterment.com. They invest in ETF’s for you and have reasonable fees. Their portfolio is quite impressive.

    As a father with two kids in college, I find that I have to “save” money in order to invest or increase my positions. I could do this with an on-line savings account, but I am trying to “squeeze” everything I can. I thought betterment.com “might” be a good way to do this, but if you want to move money, you do have to with for the “ACH” transaction to clear and that typically takes 2 days for me. There are many that will bash Betterment, but I would prefer to stay “in the market” with them until I have built $2000.00 or so I can invest.

    We max our 401k’s. HSA, and Roth accounts already. I also invest with Lending Club, and have a Prosper account for my wife. So while the Betterment account will never get that big, it does seem to be a reasonable way to save. I am going to give this a try, and may give up the AMEX Saving account in favor of Betterment.

    Just my thoughts as I am always looking for the best way to “build” so I can invest. In my case, I allocate 60% stocks, and 40% bonds in the account which is on the conservative side. I just set this up a few weeks back with them so we will see how it goes.

    Thanks for the reply Jason! I look forward to following your progress, and best of luck writing!!!

    Ray

    • says

      Ray,

      Hey, nothing wrong with what you’re doing. I say go with what works for you. There’s more than one way to skin a cat. :)

      And, like I said, I’m typically typically not sitting on cash for long. However, I’m going through a very atypical time in my life right now where I have cash on the table because I’m transitioning into a much lower income.

      Best of luck with your investments going forward!!

      Take care.

    • says

      MarciaB,

      I don’t track it specifically, but I’m about 3.5%. And that’s about what I target when I look at passive income numbers in early retirement.

      I hope that helps!

      Cheers.

      • MarciaB says

        Yup, thanks. If I could download your portfolio I could easily get Excel to give me the average (but I’m not that clever I guess). I think Vanguard has a high-yield dividend fund that spins off about 3.5% and it’s an interesting thing to think about whether building your own portfolio is better/worse than just buying shares of that fund. Definitely less fun!

        I’m even contemplating doing both (my current dividends account at Sharebuilder has 9 stocks in it, and I’m increasing by 1-2 a month in order to get up to somewhere around 30 or so). Buying shares of the VG fund would give me a sort of benchmark to see if I’m doing myself any favors by selecting individual stocks.

        • says

          MarciaB,

          You’d want to not just look at the yield of an index, but also its fees and growth of income. Most of those index funds will not exhibit the kind of consistent dividend growth you’d experience from just holding a basket of individual stocks. Furthermore, you’re simply paying someone to buy the same stocks you’re capable of buying yourself.

          But bet of luck if you go that route. I’ve compared index investing to my strategy in the past and while I think index investing is inferior, it’s a preferable strategy for most people because of its simplicity and low time commitment.

          Best regards!

  53. Ray says

    Hi Jason,

    I am wondering if you are looking at taking a position in Apple now?

    I plan to watch and maybe buy if it dips back a little on the 9th…

    Ray

    • says

      Ray,

      I’m not looking at Apple right now, but I do regret not buying when it was down near $400. I was just concerned (and still am) about their ability to innovate and keep pumping out products people want to buy. They’re able to get away with same iteration of the iPhone every generation for right now, but you have to wonder what the next big product is, and whether or not Apple will be the one making it. I can’t see that corner coming, so I prefer to invest in companies that have business models that don’t necessarily require it. But, again, I do wish I would have gotten in at $400. At that point, the margin of safety was large and even with little innovation the cash flow situation meant you were getting a great deal.

      Best wishes!

  54. Denis says

    Hello,

    I’ve been following your website during some time.

    Well, I am from Spain and I always invest in ibex 35 spanish stock exchange or European stock excange but now I have realize that the best diversified and dividend history companies for years are in the United States of America.
    By now only have position on Apple bought at the end of 2011.

    My intention is to expand my portfolio to new markets and diversify.

    My investment philosophy is:

    - Easy business to understand
    - Solid financial profile
    - Barriers to entry and / or significant competitive advantages
    - Team manager generating shareholder value and have a track record of capital allocation

    Companies that have taken a look :

    - Wells Fargo

    - Wal-Mart(I was able to get into one when I was in USA a few years ago and it’s awesome you can buy practically everything that you need) and Target Corporation.
    What the matter with both? Both now are trading below 52 weeks high. I dont know if it’s true but I read recently in Spain that people in USA prefer buying at target corporation for the best deal and quality than walmart. is that true?

    - McDonalds
    - Coca Cola Company,
    - Procter and Gamble
    - Visa
    - Deere & Company
    - Exxon Mobile, Chevron Corporation
    - Verizon
    - International Business Machines Corp.
    -

    I know S&P are so high now but I invest in Buy and Hold to get dividend, so what companies you could advise me?

    Another question, in Spain it is talking about when the Fed finish expansive monetary policy with interest rates so low, a major correction will take in USA markets, what do you think?

    Thanks for everything and sorry to ask so much but my knowledge of the American market is practically nil.

    Regards and luck with your goals.

    • says

      Denis,

      Thanks for writing! And I’m glad you found the blog.

      Your interest in companies that are based in the US is well founded. Many high-quality companies that have been raising their dividends for decades on end have been able to do so because they generate rising profits year after year, and have durable competitive advantages.

      I won’t really comment on monetary policy because that’s something that really has little to do with what we’re trying to achieve here. I always recommend to ignore macroeconomics because it will only take away from the focus you need for activities you can control.

      As far as the companies on your list, that’s a great start. I’m personally invested in most on that list, and would obviously recommend them.

      At today’s prices, it seems the retailers (WMT and TGT) are both solid buys here if you believe in their future viability. IBM is also fairly cheap here compared to both the broader market and their historical valuation. I don’t have a big position in the tech giant because I’m simply a bit averse to tech in general, but it’s a solid buy here at this price. I think WFC is a great bank, and it’s my largest financial holding. I anticipate solid dividend growth over the next 3-5 years from WFC, but I’m also a bit concerned with mortgage growth. We’ll see.

      As far as TGT vs. WMT, this is just shopper preference. I actually prefer WMT, and that’s because I usually find lower prices and a larger variety of merchandise. However, TGT generally offers higher quality merchandise, especially in home goods.

      I wish you the best of luck as you diversify out of your home market. And I hope this helps.

      Best regards!

  55. Bala says

    Hi David:
    A $128,000 portfolio that has grown to $162,000; How long did that take to do this? Please advise.

  56. chris says

    Thanks for the great blog! Are we missing Nestle in the mix? What do you think? You could probably retire on this one alone. Just a thought.

    • says

      chris,

      Well, Nestle is a great company. It’s on my watch list, but I just haven’t found the right time/valuation to purchase shares in the company yet. I do hope to at some point because that’s just a giant. However, the yield has never been all that great and the Swiss withholding sure takes a bite. Even though I can recollect that lost income at tax time because I invest in a taxable account, it still hurts when it happens.

      But I’m sure I’ll own a chunk of Nestle someday. So many stocks, so little capital. :)

      Best wishes.

  57. chris says

    I knew it had to be on your radar. Your chance to own it will come. A pullback to the mid 60s will be a good entry point. Keep up the good work!

  58. Vanrejn says

    Hi Jason,
    Thank you for great website and promoting dividend investment strategies.
    My portfolio overlapping with yours but has more Canadian and international content.
    I have fewer stocks (25) but hold larger positions.
    This is due to my DRIP approach. I prefer to drip all dividends.
    As a result dividend growth is higher.
    Special mentioning of BAX. This is great company which I would recommend to everybody.
    I’ve been trading this company since 2010. Initially buying low and selling high, but in 2013 I stopped doing that and keep collecting and reinvesting dividends.

    I am long: ABT, ABVV, ARCP, BAX, BHP, BP, BBVA, CSG, CGX-T, CPG-T, DRG.UN-T, FSX, HB.UN-T, GSK, MRK, MO, RY-T, SAN, TO-T, T-T, TOT, VOD, VZ, XIC-T, UL
    Largest positions: BAX (10% of portfolio), ABT, BBVA, CPG

    Happy investing everybody!

    • says

      Vanrejn,

      Very nice positions there. I regret selling ABT ABBV after the split, but I invested in JNJ with the proceeds…and I’ve done well. So no complaints.

      I’m glad you’re a fan of BAX. I’m happy to be a fellow shareholder, and I think this company should serve us very well over the long haul.

      Keep up the great work!

      Best regards.

  59. says

    Hi,

    First time poster here so congrats first. I am also in my thirties and trying to build up a dividend portfolio like yours.

    I was wondering if anywhere on your site you have the info that how much of this 169K was your savings that you put in and how much was appreciation in the value of the underlying securities.

    Also I can calculate by % of your income how much you were putting in monthly but was wondering if you have this info already somewhere.

    What I a trying to do is to figure out how much I need to put aside monthly if I want to start replicating your portfolio or something similar.

    Lastly when did you started (year) and with how much initial capital?

    Thanks in advance for you putting together this wonderful site and your time.

    Good Luck.

    • says

      S,

      Thanks for stopping by! I hope you find continued inspiration and motivation in what I do and write about. :)

      I started off in the spring of 2010 with $5,000. I’ve taken the time now and again to go through my brokerage account and add up how much I’ve deposited, but you can also do this. All of my capital contributions are listed in my “Recent Buy” articles. But the point isn’t to try and replicate exactly what I’m doing. The point is to regularly save as much as you can based on your individual means and build passive income so that your money one day works for you. Once your money works for you, you can then do whatever you want with your time. You can pursue your passions, spend more time with loved ones, and become whoever you want. Life is whatever you make it once the shackles of a full-time job are off of you.

      Best of luck! :)

      Cheers.

    • says

      Trader,

      I read that article a few days ago or so. I’m not personally worried because I think the e-cig revolution will help PM far more than it will hurt them. Traditional cigarettes were slowly becoming extinct anyway.

      Cheers!

  60. William says

    Hi in recent in the news was the cigarette smoking in The netherlands…
    Before it was only forbidden to smoke in big cafe’s and restaurants and in the disco..
    but now with the news from last week its gonna be the small cafe’s and restaurants too where
    nobody can smoke a cigarette inside.

    Whole europe is slowly going anti cigarette’s and The netherlands is one of the first country’s in europe where it started with the forbidden smoking..

    • says

      William,

      That’s an interesting development there. I suspect this to spread throughout Europe, much as it did here in the US.

      However, I wonder how e-cigarettes will factor into this? I’ve seen some restaurants here allow them, and it’s still a new technology. Overall, I’m excited because e-cigs are whole new growth category for the big tobacco players.

      Thanks for stopping by and sharing that. I suspect that will cause further difficulties for volumes.

      Cheers!

  61. Jake says

    Jason,

    I’m wondering if you’ve considered increasing your holding in T. It looks great to me right now, with P/E at 10.4 and a great dividend yield at 5.13%. Noticed it only represents 1.1% of your portfolio.

    Jake

    • says

      Jake,

      That’s a great question.

      I go back and forth on T. I love the yield, but the dividend growth is probably going to start falling below inflation if the $0.01 increases keep up. And losing my purchasing power isn’t what I’m after, even with the bigger entry yield.

      And the business model ultimately isn’t my favorite. Competition is pretty strong, and the service they provide is basically a commodity. The contract-based business is essentially going away, and there’s also the rise of the MVNOs. I’m basically concerned about any pricing power businesses like T might have, and I’m just not sure it’s there. That being said, once might expect a decent return because of the strong entry yield. And the dividend is well-covered here.

      So I’m just mixed on it. I love the yield and the consistent small raises, but I’m not sure about how this business will look a decade from now. And there’s also the questions surrounding how the DirecTV acquisition. I’m still watching.

      I hope this helps!

      Best regards.

  62. ST says

    For the past couple of years, the market has been performing well. However, sooner or later another recession will emerge which will take a toll on equity heavy portfolios regardless of a given portfolio’s past record and diversification. Are you concerned about such events, especially given the fact that such events will adversely affect your gains and dividend income?

  63. Jake says

    Jason,

    I was wondering if you’ve given any thought to DE (Deere & Co.). It has a low P/E of under 10 right now, the yield is 2.71%, and thr div growth rate has been pretty sweet over the last few years (at least). Also, the payout is less than 30%, so it looks like it could continue growing the dividend very easily. I’m seriously considering pulling the trigger, but wondered if there was anything that caused you concern about DE, since I don’t see it among your holdings.

    Thanks,

    Jake

    • says

      Jake,

      That’s a really timely question.

      I actually initiated a position with Deere this past Friday. I was going between DE, GE, and IBM for my second purchase this month, and eventually settled on DE. A low valuation with cyclical stocks isn’t always an indication of strong value, as the P/E is most compressed at the top of the cycle when earnings are strong and future growth looks weak (prompting a low multiple based on sentiment).

      But I think there’s pretty limited downside risk to DE right now. The next couple of years might not provide a lot of upside, but after thinking about my position as a long-term investor and DE’s likely prospects over the next couple of decades I decided to buy shares here. The yield is pretty attractive, the valuation is low enough to cushion some shocks to EPS, and the company has been aggressively raising the dividend. The most recent raise gave me the confidence to go ahead and invest here.

      I hope that helps! I’ll be releasing the article on DE next week. :)

      Cheers.

  64. Jake says

    Jason,

    Wow! I guess great minds think alike, huh? Thanks for the great, detailed response. I feel even better about pulling the trigger now. Look forward to your post next week.

    Thanks.

    Jake

  65. Scubatoad says

    Jason,

    Really cool how transparent you are with all of this.

    A couple of quick questions about the creation of that chart. Do you calculate you yield from your cost basis or your current market value?

    Do you manually enter all of this information each month or do you export it from something?

    Do you offer your spreadsheet as a download anywhere?

    -Scubatoad

    • says

      Scubatoad,

      Thanks for stopping by. Glad you enjoy the transparency. When I first started this blog there was nothing really like it out there. There have been quite a few blogs pop up since I started this that are also transparent, and I’d like to think I had something to do with that. It’s really a wonderful community now.

      As far as the yield goes, that’s current market yield. I don’t find value in YOC, and thus do not track or post it.

      I manually enter this information. I could probably automate it, but I like entering it myself. It allows me fresh perspective on what’s really going on. I think automating everything makes it easy to lose track and perspective.

      You’re more than welcome to copy and paste this spreadsheet, but I’d have to change the format to make it downloadable from what I know of Google Drive.

      Cheers!

  66. DaytonaDan says

    Mantra, I don’t mean to be rude or abusive but just looking at your photo, you look quite insane. However, after reading many of your posts and commentary, I have decided that you are not, and are actually intelligent ! Now that we/ I have cleared that up, why have you not added companies like T (at&t) to your port, it pays over 5%, and maybe a company like WIN, that pays in the high 9% to over 10% and is rated at 4 stars by S&P ??? Many of your companies pay fairly low dividends compared to other equally stable and growing companies.

    • says

      DaytonaDan,

      I look quite insane? That’s funny. In which picture do I look insane? That’s the first time I’ve heard that. :)

      I do have AT&T in my portfolio. You can see that at the bottom. Positions are categorized in alphabetical order based on the ticker.

      I don’t have WIN in my portfolio, however, because the metrics look horrible. Earnings aren’t growing, the dividend isn’t growing, and the payout ratio exceeds 100% by a wide margin. Furthermore, the stock is pricey because profitability is so low. Finally, I don’t like the business model.

      My portfolio has a blended yield of about 3.4% last I looked, which isn’t bad. I have a number of stocks yielding less than 2%, but I also have a number of stocks with attractive yields like ARCP, DLR, T, OHI, and O.

      I hope that helps!

      Cheers.

  67. says

    Hi Jason,
    quite an impressive portfolio you’ve got.
    You should change the 47 to 49 my friend.
    And I invite you to take a look at my portfolio – there are some stocks we both own…
    Would be an honour to get a short message by you on my blog.
    Best regards from Germany
    rickrack

    • says

      rickrack,

      Sent you a message over there. :)

      Thanks for the support. Really appreciate it!

      This portfolio is the result of a lot of hard work over the years. A lot of blood, sweat, and tears. I’m really grateful to be in this position. The me of today is so glad the me of more than four years ago took a different path.

      Hope all is well in Germany!

      Best regards.

  68. dividend dan says

    I just stumbled on your blog and I am very impressed ! Love reading about your start because I am just starting myself I have been in the market since March and average just over $100 a month in dividends . Like any new comer there are purchases I wish I could change to more of a dividend instead of growth like ba and sbux but I am long on both stocks so I am still ok with my standings. I know you don’t like index funds but have you looked at dnp they have paid 6.0 yield since 1987 on a monthly dividend payout .

    • says

      dividend dan,

      Glad you found my humble little spot on the internet! :)

      I just now took a quick look at DNP. Not my cup of tea. I love the idea of a great yield and monthly payouts. But the payout isn’t growing, from what I can see. And no growth leads to little or no appreciation in the asset. And you can see that here with DNP. I like high yield, but I want growth in my income to keep up with inflation. A high yield is wonderful, but you’ll eventually lose purchasing power to inflation. Of course, if you’re 60 or 70 years old this might not matter much. But as a 32 year-old investor I’d prefer a more attractive blend of current income and growth in that income.

      Cheers!

  69. Jason says

    DM,

    just curious if you are putting any money into a Roth IRA so later in life you can enjoy tax free income? thank you!

  70. says

    Congrats for your portfolio and for this amazing site DM.

    I’m trying to do the same as you, but with spanish companies (I live in Spain). I think that the best thing in this adventure is look back and see your evolution.

    Now, my next step is add some US companies to my portfolio. I’m thinking in Target or Pfizer, but what is your recomendation for a foreign investor?

    If you wanna take a look to my blog and select spanish stocks for your portfolio it will be a pleasure for me recomendate some companies: http://divindependencia.blogspot.com.es/

    Best regards,
    Fernando.

    • says

      Fernando,

      Thanks for stopping by from Spain! It’s wonderful to have readers from across the pond. :)

      If you’re looking at US companies, I would probably begin to build around really high-quality blue chips. So I’d be looking at maybe a KO and JNJ and go from there. I would prefer JNJ to PFE due to diversified operations and a better dividend growth record. TGT is a solid pick and I’m long, but I bought TGT after I already had a substantial portfolio built up.

      Best of luck. And happy shopping!

      Take care.

  71. says

    Hi Jason,
    Really like the site, I’ve spent a lot of time reading your stuff, so thank you for making quality dividend stock info available. My portfolio approach has been similar to yours – focusing on the dividend growers. As you mentioned you try to get a few higher yielding stocks in there….I see about 7.6% of you portfolio has stocks that yield 5% or more. My question Is this – How do you decide what percentage to devote to the high yield ? Was the 7.6% intentional or is it just gut feel for you? I’m thinking of adding a few of these type of stocks for the same reason….since i have a few more years until i achieve complete financial independence. Thanks again.

    • says

      Kevin,

      That’s a great question there.

      It’s a gut feeling for me. I don’t target a specific % allocation to higher-yielding stocks, but rather I focus more on individual companies and their valuations at any particular time. I usually find the most attractive risk-adjusted returns with stocks that have a ~3% yield and 7-10% growth rates, so that’s where most of my focus and allocation lies.

      Appreciate you stopping by!

      Take care.

  72. says

    Your yield is about the same as the Small Dogs. Wouldn’t it be simpler and cost effective with just 5 stocks than the 49 you currently have?

    • says

      peter,

      It wouldn’t be more cost-effective to invest that way, as I still invest excess savings every month. So paying $7 a pop to invest in the same 5 stocks over and over again or paying that same commission to diversify would cost the same over the long run.

      However, I’d never want my portfolio to be concentrated in 5 stocks for a number of reasons.

      I explained my goal of 50 stocks here:

      http://www.dividendmantra.com/2014/04/why-i-eventually-want-to-be-invested-in-50-companies-income-diversification/

      Take care!

      • peter says

        Small Dogs is about a maximum of 10 trades/year, on the last trading day of the year.

        You’ll be paying $7 X 49 vs. $7 X 5 if you were to exit or switch.

        How many buys do you make it a year?

        • says

          peter,

          I buy between 12-24 stocks per year. But quibbling over an extra $14-$84 per year when I’m after hundreds of thousands of dollars seems like missing the forest for the trees. However, it’s really a moot point as that strategy isn’t for me. I don’t confine myself to a small basket of stocks like that, and I buy based on value, fundamentals, and qualitative aspects…not a particular index and what’s trailing or not trailing.

          But I understand some people have done well by it and have been able to build solid dividend income streams. Which is really the name of the game. Best of luck if you follow that strategy! :)

          Cheers.

  73. Dana says

    Nice site! I’ve been following you for awhile and have a similar portfolio. Back on the question of higher yielding stocks, what do you think of NPK? It has a great yield and is down to an attractive pricing right now. Obviously a riskier investment, but the stock seems to have some good fundamentals. What are your thoughts about the company and its single big yearly dividend? Thanks!

    • says

      Dana,

      I looked at NPK a while back. Last I knew, there was a lot to like. Big insider ownership, and very prudent with capital. Plus they have that huge annual special dividend.

      But the big payout depends on earnings, so it isn’t always going up. In fact, I believe it’s been going in the opposite direction. And their operations are kind of weird. Last I looked they were into ammunition and diapers. It could be a great investment, but I just didn’t really “get” the business.

      I think I looked at them a few years ago when they were trading well above $100. Looks like they’re trading well below that now.

      Wish you luck if you invest here. But it just wasn’t for me.

      Best regards.

  74. Scott says

    Jason,

    I just read your article on the 50 stock strategy and generally agree with your conclusion.

    On a related topic, it appears by looking at your holdings that rebalancing is not something you feel is necessary. Most research shows that rebalancing reduces risk and also boosts performance. Any thoughts on rebalancing you could share?

    Scott

    • says

      Scott,

      Rebalancing is a form of market timing, in my opinion. And it also involves selling, incurring additional fees, incurring additional taxes, and trying to move in and out of stocks. If I were to rebalance I probably would have sold stocks that had run up, like AFL, ITW, NSC, and JNJ. And they continued to run long after I should have rebalanced. I don’t try to maneuver like that. I simply invest in great businesses and let their business performance make my decisions for me.

      Now, if a business isn’t doing well and I think I could do better elsewhere then that’s quite another story. But rebalancing as it’s traditionally known is based around stock prices and market performance. And that’s just allowing noise to creep into your life.

      I’d rather not try to dance that dance. I’d rather let great businesses continue to profit year after year and send me increasing dividends.

      Best wishes.

  75. says

    Hi DM,

    Been doing some reading online about holding REITs in taxable accounts and the sentiment is don’t do it. It is very tax inefficient and that all REITs should be kept in retirement accounts. The dividends on REITs are taxed at a very high rate in taxable accounts. I see you own quite a few REITs, ARCP, DLR, O, OHI and all are in your one taxable account. Just want to get your opinion on this matter as it seems that REITs can be great investments, great growth and great dividend payers but not tax efficient in regular accounts. Why do it? Why not open a retirement account for the REITs/MLPs, etc.?

    • says

      DivHut,

      That’s a great question there.

      I plan to keep REITs as a very small percentage of my portfolio. Probably within 5-10%, and preferably on the lower end. So with the majority of my dividend income coming from qualified sources and my overall dividend income quite low I think I’ll end up owing very little taxation. We’ll see.

      I’ve discussed my thoughts on retirement accounts ad nauseam. However, if I were to invest substantially in REITs I would probably shift my strategy a bit.

      Cheers!

      • Dividend Income Project says

        oh Dividend Leader,

        I think I know how you can be tax efficient with regard to ROTH IRAs..

        If you have REITs in a Roth IRA you could withdraw amounts any time without penalty as long as principal amount stays in the ROTH IRA. So let say you have REITs in your ROTH IRA. By 40, if your annual dividend income is say $5500, you can withdraw that amount and not pay taxes as you should be having the principle value of the investment still in the ROTH IRA.

        • says

          DIP,

          Absolutely. A Roth IRA is a great tool. You can withdraw contributions at any time. So installing some REITs in a Roth means you can start withdrawing those hefty dividends as soon as you want, as long as you don’t exceed your own contributions.

          But it’s not based on principle. It’s based on your contributions. There’s an important distinction there. Appreciation or depreciation affecting your principle is separate from the contributions you actually make.

          But I discussed taxable vs tax-advantaged accounts (and why I use a taxable account) here:

          http://www.dividendmantra.com/2013/08/why-i-hold-100-of-my-equity-investments/

          Thanks for the suggestion!

          Cheers.

          • Dividend Income Project says

            Thanks oh dividend leader… I have a ROTH IRA and recently I was thinking of whether to double it as a plan b emergency fund apart from my plan a emergency fund.

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