Weekend Reading – July 9, 2011

This week was a 4-day work week since we had Monday off for the 4th of July celebration. Although it was a shortened week, it was still incredibly long for me. I’m glad it’s over! Having Monday off was nice, but I definitely look forward to the time when every day is a day off! On a separate note, the markets have been very volatile over the past week. The unemployment numbers released on Friday were very disappointing, and I expect the markets to be very turbulent over the short term. I can smell an opportunity.

Here are some excellent articles from fellow dividend growth investors, frugalists and personal finance bloggers from the past week.

Best Dividend Stocks for 2011-Q2 Update
Dividend Growth Investor updates us on his picks for the best dividend stocks of 2011. These four stocks are the result of a stock picking contest he entered at the beginning of the year between other bloggers. All four are solid picks, and I’m long all four.

Portfolio Addition: Power Financial Corp. (PWF)
The Passive Income Earner adds PWF to his portfolio and advises us as to why he did it. This seems like a pretty solid pick to me, with a very healthy yield. It lacks dividend growth over the last couple years, so that’s definitely something to think about before you initiate a position with this company.

Dividend Income Progress Update – June 2011
D4L provides us an update to his dividend income from the month of June. These are my favorite articles, as they serve to be quite an inspiration for me. I have a long time before I get anywhere close to the level of passive income D4L has attained, but I’m excited to be on the journey.

Step 8: Prune and Grow
Dividend Monk continues his 9 steps to build and manage a dividend portfolio series. This is an excellent article that highlights why it’s important to continually monitor your portfolio and prune any positions that may not meet your investment thesis or have become severely overvalued. Good stuff!

How To Build a 6 Figure Income Dividend Portfolio with $600 per month
The Dividend Guy shows how it might be possible to eventually build a portfolio large enough to throw off a 6-figure income in dividends by allocating only $600 per month. I personally plan on allocating quite a bit more capital than this to my own portfolio and hope to add $1200-1800 month (2x-3x) in new capital. It’s an interesting exercise, but if you’re actually looking to produce this much passive income I would recommend investing a lot more than $600 per month.

ConocoPhillips Dividend Stock Analysis
The Dividend Pig analyzes ConocoPhillps, an energy company I have had my eye on. He comes to the same conclusion he did with many other energy companies; he doesn’t find them attractive opportunities. There are incredible pros and cons to investing in energy companies. You have competition, a declining resource base, government regulations and national energy companies…but you also have a very captive audience. The world’s need for energy isn’t going away soon, and until a reliable and cheap renewable resource comes along…oil is going to rule. I find Big Oil attractive as a medium-term investment with higher than average risk.

Why You Should Stay Away From Airline Stocks
Buy Like Buffett defines why you should stay away from airline investments. I think he highlights many reasons why airlines make horrible investments. I personally agree 100%. The lack of an economic moat, low margins and high costs all make these very unattractive opportunities.

My simple stock selection rules of thumb
My Own Advisor highlights his entry criteria. He likes big companies he can understand that pay dividends. I think he has a few things in common with me!

The voluntarily dispossessed
Jacob asks if you are job dependent, and if you are: why? There are alternatives to being a “wage slave” and I’m pursuing what I feel the best alternative is.I’m living frugally and with purpose trying to save most of my income so I can live freely after a voluntarily shortened career.

Thanks for reading.