Well, the time has come to update the Freedom Fund once again as we start another month. The Freedom Fund is my portfolio, and I think it’s aptly named. My portfolio is my way to freedom; freedom from a job I don’t desire to purchase goods I don’t need to impress neighbors I don’t care about. This journey is all about freedom and flexibility. One day the dividend income this portfolio generates will fully replace my day job’s income and my time will be completely my own. What could you possibly want to own more than your time?
I feel extremely fortunate and thankful that I’m able to post these updates every single month which shows the power of monthly contributions to investments because of the high savings rate I maintain. It shows how a relatively large sum of money can be built through the power of time, patience and perseverance.
It’s important to keep in mind that while updating the overall value of my portfolio is important for historical reference and for purposes of keeping track of total return, my main focus is on the rising dividend income stream the Fund provides.
The Fund was extremely active last month as I managed to purchase equity in high quality companies at what I felt were opportune prices at opportune times. This was actually one of the busiest months my portfolio has ever had, and I didn’t actually intend it to be so. But as I recently discussed, my addiction to dividends sometimes gets the best of me!
During the month of August, I added to my position in Digital Realty Trust, Inc. (DLR) and then proceeded to purchase additional shares in Altria Group, Inc. (MO). Next, after some reader feedback and encouragement I decided to initiate a position in American Realty Capital Properties Inc. (ARCP). Finally, just when I thought I was done for the month I decided to initiate a position in what I thought was an attractively valued blue chip in International Business Machines Corp. (IBM).
The current market value of the Freedom Fund stands at $124,203.41. This is an increase of 0.8% over last month’s published value of $123,154.37. This increase is due to a combination of a massive fresh capital infusion along with the reinvestment of August’s dividends, with which I used to make the equity purchases I listed above. Seeing as how the S&P 500 is down 4.49% over the last month, it’s only because of all the purchases that my portfolio actually increased in value. Of course, I’d be happy with continued 5% drops in the broader market so that I can put fresh capital to work at better prices, and hence valuations.
Looking forward, I’m excited to continue adding fresh capital to the Fund and making purchases at appropriate valuations. The broader market’s continued decline has brought the valuation of some high quality companies down a bit, which is something I’m rather happy to see. Hopefully this decline continues a bit further. I was a bit more active than I planned on being during the month of August, so due to this I don’t have a lot of excess cash to work with in September. However, I should have enough capital for two purchases if the prices are right.
I’m currently invested in 39 companies. This is an increase from last month as there were no sales, and the initiation of two new positions as discussed above.
These updates are mainly designed to show the increase in the value of the underlying equities I’m invested in, but the main purpose of investing in dividend growth stocks is for the rising stream of dividends over time. So with that said I don’t put too much emphasis on these monthly updates on the value of my portfolio. I think it is a good idea, however, to keep track of the rising (or falling) value of one’s securities and be aware of where they are in terms of the marketplace and whether or not certain stocks are attractively priced. It proves to be a useful exercise, for me at least, to update the values monthly. It gives me fresh perspective on which equities are performing well and which aren’t, and from there I can make educated decisions (based on further due diligence) on which stocks I’d like to add fresh capital to (while considering portfolio weight as well).
Full Disclosure: Long DLR, MO, ARCP, IBM
How are your portfolios doing? Looking forward to further pullbacks?
Thanks for reading.
Photo Credit: Vichaya Kiatying-Angsulee/FreeDigitalPhotos.net