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It’s important to keep in mind that while updating the overall value of my portfolio is important for historical reference and for purposes of keeping track of total return, my main focus is on the rising dividend income stream the Fund provides.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 particularly active during the month of October. I had actually planned on being rather passive due to my cautious outlook on valuations, but I instead decided to pick up shares in solid companies at opportune prices when Mr. Market wasn’t feeling particularly optimistic about them.
I initiated a position in Exxon Mobil Corporation (XOM) very early in the month, which rounds out my holdings in oil supermajors quite nicely as XOM is the most super of them all. Then I laid back until I found that Baxter International Inc. (BAX) was still being priced attractively for the long haul, so I increased my position. That was supposed to be my last activity for the month of October, but Digital Realty Trust, Inc. (DLR) took a 20% tumble over the course of a couple days which compelled me to add a little to my existing position.
The current market value of the Freedom Fund stands at $140,603.90. This is an increase of 7.3% over last month’s published value of $131,084.63. Another wonderful month, and was certainly helped by the strong performance of the S&P 500 (up 4.76% over the last month). Although it’s a psychological boost to log in to the brokerage account and see my balance at all-time highs like this, the significant drawback is that the broader market is also at all-time highs and hence there are not a lot of compelling values out there from which to choose from. However, as always, the value investor in me considers it a fun challenge to spot those opportunities when they do occur.
I’m currently invested in 42 companies. This is an increase since last month, as my investment in Exxon Mobil Corporation (XOM) is a new position.
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 XOM, BAX, DLR
How are your funds doing? Was October particularly kind to you?
Thanks for reading.
Photo Credit: Vichaya Kiatying-Angsulee/FreeDigitalPhotos.net