I’ve had couple of companies on my watch list and lately few of those have dropped down to really tempting levels. I was considering adding on to existing positions on DE and AFL but in the name of diversification decided to pull the trigger on Lockheed Martin Company. Defense sector was missing from my portfolio and when it comes to defense, LMT can deliver. I wouldn’t call it exceptionally cheap but today’s slight drop was enough for me and I bought 9 shares for 163,10 USD per share as an initial position.
Forward P/E is below 14, current yield is about 3.2o% and payout ratio about 61%. Fits very nicely to my current strategy.
Investement strategy as follows:
- passive income through dividend growth investing
- limited number of high quality companies (eventually in the range of 20-30)
- reinvest all passive income
- inject new capital every month
- target single purchase per month
- be prepared to increase the rate of investments when blood is in the streets
- utilize changes in currencies when possible
- buy & hold, selling something might sometimes be the best thing to do but to try to avoid ending up in that situation
Stock selection strategy:
- diversify, diversify and then diversify a little bit more (focus on global companies or companies operating in large enough market areas)
- home market bias is evil
- target company must be able to benefit from the following: growing population, aging population, people’s fear of death, people’s tendency to kill each other, people’s tendency to exchange long term benefit for short term pleasure
- mix dividend growth stocks and high yielding stocks, target portfolio yield growth close to average inflation rate