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 cover my expenses and my time will be completely my own. What could you possibly want to own more than your time?
I’m extremely fortunate 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It’s important to keep in mind that while updating the overall value of my portfolio is important for historical reference and for purposes of keeping track of total return, my main focus is on the rising dividend income stream the Fund provides.
What a month it’s been!
I’ve been busy on the investment side, even while getting married and attending the 2015 Berkshire Hathaway Inc. (BRK.B) annual shareholder meeting. The meeting is the culprit behind me getting this update published so late in the month. Blame Buffett!
I started the month of April off lightly – initiating a very small position in Apple Inc. (AAPL) with some accumulated dividend income and by use of a free trade in my Scottrade account. Just after my purchase, AAPL announced a blockbuster second quarter and a 10.6% dividend increase. I’m currently thinking of increasing my rather small stake here.
But it didn’t stop there. I quickly followed that up by buying shares in W.P. Carey Inc. (WPC), which is also a new position for the Fund. I found the yield, quality, and valuation all compelling across the board. It’s quite tough to find a stock yielding near 6% with a dividend growth rate over 7%. That kind of combination is exceedingly rare, especially across high-quality stocks. I loved that purchase so much that I decided to add to my stake already in early May after the stock took a slight dip.
I finished April off with the initiation of a position in another blue-chip tech firm, Microsoft Corporation (MSFT). MSFT also reported great results just after my purchase, shooting the stock up some 15% shortly after I purchased. I was hoping to quickly add to this stock, but it zoomed past what I’m comfortable paying.
You’ll notice I stayed pretty true to my watch list for last month, which is typically how I operate. I like to find a small basket of stocks in my wheelhouse and pull the trigger opportunistically.
The current market value of the Freedom Fund stands at $196,596.75, which is an increase of 4.1% since last month’s published value of $188,845.55. Overall, the portfolio performed well. I had opportunities where I wanted them, while positions Philip Morris International Inc. (PM), National Oilwell Varco, Inc. (NOV), and Microsoft all had particularly strong runs over the last 30 days or so.
I couldn’t be happier with the performance here. The Fund is performing as expected while I continue to pick my spots in the broader market. I still see value, as I recently pointed out when I released my watch list for the month of May. In addition, REITs continue to slide, which could offer additional opportunities for capital deployment over the coming weeks. It’s crazy as I sit here nearing $200,000. I started out with $5,000 in early 2010 with nothing but a dream of changing my life around. And a dream it has been.
I’ve already started putting capital to work this month with the aforementioned purchase of additional shares in WPC. I expect to be able to make at least one more purchase over the course of the month, with perhaps a third purchase possibly in the cards as well. I see no reason to take my foot off the pedal, so I won’t. Financial independence won’t materialize for me out of thin air. That mountain won’t climb itself. And that’s why I continue to aggressively save and invest every single month.
The Fund now has positions in 56 companies. This is an increase since last month since the three purchases in April were all new positions.
These updates are mainly designed to show the increase or decrease 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. Thus, I don’t put too much emphasis on these monthly updates. 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 find it a helpful exercise 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 AAPL, WPC, MSFT, PM, and NOV.
Did you have a great month of April? Your portfolio performing as expected?
Thanks for reading.
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Edit: Corrected spelling mistake.