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It’s important to keep in mind that while updating the overall value of my portfolio is important for historical reference and for purposes of keeping track of total return, my main focus is on the rising dividend income stream the Fund provides.
December was yet another very quiet month for the Fund. I’ve been rather short on capital lately, as I disclosed the purchase of a car that, hopefully, should last me a decade or more with very little cost requirements beyond normal maintenance, insurance and gas. That purchase was quite large, and so I’ve been unable to spend as much on equity transactions as I’m used to. Nonetheless, I still found time and money to add to my burgeoning position in Kinder Morgan Inc. (KMI) mid-month. Other than that, it’s been business as usual as I continue to scan the market for attractive opportunities and let the dividends from the portfolio pile up in beautiful fashion.
I also made a change to the portfolio table on the blog. Many readers have asked me to include my cost basis for all of my positions, and I was happy to oblige. Although I’ve publicly disclosed my cost for every transaction since this blog went live in March 2011, it’s not realistic to go hunting down articles to figure out how much I paid for a certain stock. So I’ve now published my cost basis for every single equity holding I own, and I’ll continue to update this information going forward as I add to holdings or initiate new positions. I hope it’s a change you readers find value in!
The current market value of the Freedom Fund stands at $146.930.61. This is a 2.6% improvement on last month’s published value of $143,198.49. Although it feels good to be closing in on a portfolio value of $150,000, I’d much prefer a natural correction in the stock market which would allow my current capital (which is more limited than usual) to go further by being able to purchase cheaper equities with higher yields. Of course, it’s a fool’s errand to try and predict where the stock market is headed so I’ll just continue to dollar cost average my way into positions, monthly as usual.
And though I would prefer a cheaper market, it is pretty amazing to sit back and reminisce about what happened for my portfolio over the course of the last year. In the January 2013 update for the Freedom Fund, I listed my portfolio value as being $87,985.11. Here we are a year later and it’s now just a few strides away from the mid six-figures. It’s really amazing what seemingly small steps every single day can add up to. It’s been my mantra all along that saving more than half of one’s net income and investing intelligently in companies that continue to hike dividends regularly is a surefire path to success and wealth. If this isn’t the proof in the pudding, I don’t know what is.
I’m currently invested in 43 companies. This is the same as last month, as my only investment was into a company I already owned a piece of.
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 KMI
How are your portfolios doing? End 2013 on a high note?
Thanks for reading.
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