Portfolio: January 2019

The January Dividend Farmer update witnessed a notable shift in relative portfolio weight since December.  There were no new additions or deletions to the portfolio.  However, the REIT holdings sufficiently outperformed my health and energy holding to shift the weighted distribution a couple of points at the high end of the portfolio.

The portfolio holdings toward the low end gained or lost a few tenths of a percent respectively, but nothing changed by a large enough margin to shuffle the rank order within the basket of firms.

In general, the holdings bounced up nicely, but not enough to overcome the December slump in which case the total value hasn’t recovered; but it was a solid effort.  Otherwise, none of the holdings experienced events, good or bad, compelling me to alter any of the positions in a material way.  I’ve been investigating several possibilities including SO, GD, MSFT, UTX, and GIS as additions to the Farm, but nothing has tripped the buy wire yet.

The yield relative to current price bumped up from 3.75% in December to 3.94% in January due to dividends received from a couple of the higher yield holdings.  All dividends are automatically reinvested with no transactions fees.  Unweighted average yield on cost crept up to 4.7%; still comfortably above the current yield on price of 3.94%.

The average monthly dividend growth from this basket continues moving upward standing just above $1,150.  Fortunately the supplemental income hasn’t been needed but property tax season could change that fact temporarily.  The trailing twelve month growth rate was 16.5% primarily due to the high yield dividend holdings paying out during the month.  That kind of growth rate, if maintained, results in doubling the income stream within about 4.5 years.  Although that rate is unlikely to be sustained it provides a margin above the 10% figure which is highly desirable. 

Given the horizon to retirement, trends like this offer the potential for multiple doublings before I hand up the corporate badge.  Each month generates additional income stream growth through the power of compounding in a slow, steady manner.  The Rule of 72 post offers further detail about the power of compounding.  The remarkable thing about compound growth is that if you’re patient you’ll eventually reach a point at which critical mass is reached and growth in your dividend stream takes off.  That’s why this Dividend Farmer is such an advocate of dividend investing.

The thoughts and opinions expressed here are those of the author, who is not a financial professional.  Opinions expressed here should not be considered investment advice.  They are presented for discussion and entertainment purposes only.  For specific investment advice or assistance, please contact a registered investment advisor, licensed broker, or other financial professional.