Investment Strategy #1

JP

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

Recent Reallocation from Exchange Traded Funds to Deere & Co and Realty Income Corporation

JP

In attempt to streamline my current portfolio I decided to sell all the exchange traded funds I had. The position on those was not significant to begin with and I feel that limited set of dividend oriented stocks is the way to go for now. For this operation I didn’t inject new money but reallocated the funds received.

First I opened a new position on Deere & Co and bought 20 shares for 87,33 USD per share. This was high on my watch list and this reallocation allowed me to open this position sooner than expected. DE seems fairly valued as the P/E is around 10 and it yields about 2.60.

Rest of the money went to strengthen an existing position on Realty Income Corporation. The key factor here was the need to focus on the short term income due to tax reasons as described before so I bought 25 shares for 44,78 USD per share.

Links:  http://seekingalpha.com/symbol/DE, http://seekingalpha.com/symbol/O

Current watch list: LMT and weapons & defense sector in general, OHI (REIT, exposure to the healthcare sector), AFL (reasonably priced company and position I plan to add on)

Recent Buy: Johnson & Johnson

JP

JNJ dropped a bit after posting their latest earnings report. The report itself was actually positive so I decided to use this rare opportunity to add on existing position and bought 15 shares for 100,73 USD per share. This will add 42 USD to my annual income as dividends before taxes. No specific reasoning was needed for this purchase as this is one of the best companies in the world to own a piece of. Personally I wouldn’t consider this price as super cheap but it is acceptable in the current market. I’ll consider adding on this position again in 98-101 USD range but I’m certainly going to invest as much as possible if it drops below 95 USD.

Current watch list: DE (new), AFL (existing), JNJ (existing), LMT (new but a bit far fetched at the moment)

Links: http://www.investor.jnj.com/divhistory.cfm, http://seekingalpha.com/symbol/JNJ

Recent Buy: Baxter International Inc

JP

As much as I dislike buying something when everyone else is buying exactly the same thing, I decided to hop on to the bandwagon and bought 20 shares of Baxter International Inc. for 73,96 USD per share. All the relevant information can be found from the link below. It’s quite obvious that the expected spin-off for 2015 is the key thing here for most of the DGI investors who have had their eyes on this lately.

Recent buy analysis by dividendmatra.com: http://www.dividendmantra.com/2014/06/recent-buy-7/

Recent Buy: Realty Income Corporation & Aflac Inc.

JP

Realty Income Corporation does not really fill the primary criteria I have for passive income stock but there’s another factor that has slight impact on the applied strategy. Due to tax reasons I’ve been forced to maximize the short term dividend income instead of focusing solely on the long term potential to raise the dividend. Therefore I decided to add on the position I opened last month and bough 20 shares for 43,73 USD per share.

I also opened a new position on Aflac Inc. which seems to be one of the few reasonably priced stocks out there. It also allows me to open a position on insurance sector  and provides exposure to the Japanese market. Dividend aristocrat, P/E below 10, low payout ratio and current value well below the 52 week average are properties that do fill the primary criteria I’ve set for a passive income stock. Bought 30 stocks for 61.50 USD per share. This is position I plan to add on in the coming months.

Links:

Tax reasons (only in Finnish): http://www.nordnetblogi.fi/tulo-ulkomailta-syo-verovahennyksen/03/04/2013/

Realty Income Corporation: https://finance.yahoo.com/q?s=O

Aflac Incorporated: https://finance.yahoo.com/q?s=AFL

Recent Buy: Realty Income Corporation

JP

There are few holes in my current portfolio. I didn’t have any direct exposure to realty, banking/insurance or technology but in the current market situation it’s really hard to to find any strong candidates to fill such holes. After  some consideration I decided to open a very modest position on Realty Income Corporation (O). I still have a bit mixed feeling of the company but it has some positive attributes but the most obvious one is the monthly dividend of 0.18USD per share.

Summary: bought 20 shares of Realty Income Corp. for 41,90 USD per share. Current dividend being 0.18 USD per share per month, this will increase my quarterly dividends by 10,95 USD before taxes.

Links: http://www.nasdaq.com/symbol/o/dividend-history, http://www.realtyincome.com

New Toy: Specialized FatBoy

JP

IMG_0128

I accidentally a fatty. Did what? Got myself  a fatty. Specialized Fatboy that is and based on a hour and a half test run in the local woods it’s money well spent. Haven’t really ever done any real mountain biking but this is really something. On a flat surface it’s like driving around with a sofa but in trails it’s something totally different. It’s a funny feeling to drive over fallen trees without lifting your gluteus maximus from the seat. Never done that with sofa neither but I’d imagine it’s just as comfy.

The main idea behind all this is the fact that my current commute is way too long during the winter. I mean anything is doable but it just takes way too long and complicates the clothing (especially feet department). Summer time is easier and I hope to do it with my cyclocross at least occasionally. For spring, fall and winter this new fatty would be the substitute for regular workouts and mental getaways. I really hope that I could pickup the photography as well while floating around on these 4.6 inch wheels. That remains to be seen.

Specialized Fatboy