It’s been a while since I published an article here. The reason for that is very simple, I haven’t been doing any major investments. Months ago the word around was that the market was going to drop. At that time I just started accumulating funds to wait for the DIP. I figured that it would be an excellent time to expand my holdings.
Well, for me, the DIP never materialized, My portfolio increased an average of 29%. I’m not complaining but I was looking forward to picking up some larger quantities of the EFT’s I own. But they’ve been going up steadily. My REIT’s have been my best performers. ABR & ACRE have increased in market value by 84% & 46%, respectively. And all of my holdings are still paying dividends at the same level as before or better, and I’m still reinvesting those dividend funds.
Even my 401K has been doing well. VFIAX has had a gain of 30% while VVIAX has gained 12%. And my money market account gained 27% since I purchased them. It’s great to see those gains but I have a long way still to go to reach my goal. But I’m happy my investments are going in the right direction.
I’ve decide that it was time to modify my investment strategy. Not because it was wrong but because it wasn’t moving things along fast enough. Again, as I’ve stated before I have a timeline that is considerably shorter than the normal “rule of thumb” timeline of 30 years. My timeline is only 5 years, albeit a rolling 5 years. One cannot turn back the clock and try to redo the past so all we can do is work with what we have. My goal is still to stop working and live off of the dividends. To do so I have to have a extremely larger amount of money invested than I do presently. To this end I am putting any discretionary funds into investments.
I have outlined my strategy previous but now I’m going to be adding another point. And that is that I will be focusing on companies and funds that pay dividends on a monthly basis. Quarterly payouts are nice, but monthly is much better. If you are a believer in compound interest then you know what I am getting at. Why wait for the quarterly dividend in order to re-invest when you can re-invest the dividend on a monthly basis. All other criteria in my strategy still holds.
My focus will be Exchange Traded Funds (ETF). This will allow me to diversify and to minimize my risk. I get to own a little bit of everything instead of trying to own everything all at once. I also don’t have to keep a constant eye on the market value to determine when the stock no longer performs to meet my goals. Someone else does that. Yes, I’m willing to pay someone to do that…to a limit. I still have my criteria of not getting ETFs that charge over 0.6% in costs. There is a high yield ETF that has a dividend yield of 7.77%. Seems good. Except that the Expense Ratio is 1.25%. Morningstar rates the Risk as Above Average and rates the Returns as Low. So, I am not going to blindly invest just on a high dividend yield. I am not a great risk taker. Especially with an abbreviated timeline. I like my risks to be Average or Below. The returns should be rated Average or Above.
So, what caused me to tweak my strategy? I had viewed the video 5 Monthly HIGH Dividend ETFs (5%+) ETFs that Pay Monthly Dividends that I had posted on my blog previously. This video is put out by Learn To Invest. He does put out quite a few useful tutorial videos about investing. This one got me to thinking that his presentation of ETFs could help me accelerate my investment activity and thus increase my investment values at a higher pace. So, I have to determine if I should liquidate all or some of my individual stocks and put the proceeds into ETFs or do I just invest my money solely into ETFs going forward from now on, leaving the individual stocks untouched.
So, follow my blog to learn what I end up doing. Maybe you’ll get something out of this taht you can apply to your investment strategy.
I am fairly pleased with my current portfolio since I developed my own investment strategy. My investment activity is still not as accelerated as I’d want it to be but slow and steady is good. I got rid of all but one of the first stocks I bought before I really knew what I was doing and have been focusing my effort on investing in dividend stocks.
I have been investing at least $200/month. I wish it could be more but reality is a bitch. Reality is what we normal people have to deal with regardless of what the so-called “investment experts” on the internet say.
But so far, my portfolio as increased 13.51%. My holdings:
I’m also looking to diversify my portfolio a bit more by buying some bond EFT’s (i.e. either $VTIP or $VTEB). Also, with the current pandemic it might be good to invest in a pharma company. But which one? I might look to buy some $VHT, an ETF that invests in pharma companies within the Healthcare sector.
Here’s another video tutorial from Learn To Invest that I found interesting and informative. As I watch this video I can see that my investment strategy has to change. I learned something else to help me attain my goal.
If you’re interested to learn how to put together a portfolio for big dividends then you need to start with this video. Like you, I’m in the process if learning everything I can about dividend investing. As I go through them I’ll feature the ones that I feel are the most useful and informative. If you want to see what other videos are available from Learn to Invest, click here. Enjoy the video.