Well, despite all the decline in the rate of dividend increases our QDV is holding up nicely at just over 20%.
It's been a wild ride, and it may not be over yet. We are tracking dividend news closely, and with dividends being a great barometer of how industry sees the future, things aren't as bleak as it is portrayed in the media.
Hope things are going well for everyone!
Wednesday, May 7, 2008
Monday, April 7, 2008
Finally an update!
Sorry about the dearth of posts. I am trying to finish my MBA, and I haven't made much time for this. We added a couple holdings, such as State Auto Financial (STFC, QDV 36%) and LSI Industries (LYTS, QDV 30%). Both are great dividend growers, and we think they will weather the current market slowdown quite nicely.
We also had a spin-off of Philip Morris Intl (PM) from Altria (MO). Now we have exactly 50 holdings! As my broker mentioned, "looks like you have a mini mutual fund there!"
Since the market has rebounded a bit our relative performance to the Wilshire has suffered. That is the defensive nature of the portfolio. It has not been bad, with an outperformance of 3.5% over the Wilshire since Oct 2006. Keep in mind this excludes dividends, so if we averaged 3% that makes our performance around 6.5% better than the Wilshire so far. Portfolio QDV has remained excellent at over 21% even with some slowing dividend growth for some individual issues. We had one dividend cut, which was Southern Copper (PCU) but it is an ADR and more volatile than many of our other holdings. We are watching closely to see if dividend growth resumes over the next couple of quarters. One of our bank holdings is Suntrust (STI) which is the riskiest bank in our portfolio, but so far, no dividend cut. All in all, we're very pleased at how well our dividend portfolio has held up and we're getting a nice, stable, yet growing dividend stream, that we will use to plow back into attractive dividend growers until retirement. By then we hope to have a large monthly cash flow to fund a very comfortable retirement! I hope the market has been kind to all of you!
We also had a spin-off of Philip Morris Intl (PM) from Altria (MO). Now we have exactly 50 holdings! As my broker mentioned, "looks like you have a mini mutual fund there!"
Since the market has rebounded a bit our relative performance to the Wilshire has suffered. That is the defensive nature of the portfolio. It has not been bad, with an outperformance of 3.5% over the Wilshire since Oct 2006. Keep in mind this excludes dividends, so if we averaged 3% that makes our performance around 6.5% better than the Wilshire so far. Portfolio QDV has remained excellent at over 21% even with some slowing dividend growth for some individual issues. We had one dividend cut, which was Southern Copper (PCU) but it is an ADR and more volatile than many of our other holdings. We are watching closely to see if dividend growth resumes over the next couple of quarters. One of our bank holdings is Suntrust (STI) which is the riskiest bank in our portfolio, but so far, no dividend cut. All in all, we're very pleased at how well our dividend portfolio has held up and we're getting a nice, stable, yet growing dividend stream, that we will use to plow back into attractive dividend growers until retirement. By then we hope to have a large monthly cash flow to fund a very comfortable retirement! I hope the market has been kind to all of you!
Monday, February 11, 2008
Not Doing too bad here
All in all, we are holding up very well, with around a 5% out-performance of the Wilshire 5000. We are hanging in there.
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Wednesday, January 23, 2008
Staying the Course
Needless to say, it's been a difficult time to be in the arena of investments. However, not a single one of our holdings has yet had a dividend cut, and our portfolio QDV remains strong. As planned, relative performance has been outstanding, due to the portfolio's defensive tilt. We are beating the Wilshire 5000 by over 4.5% to date (Oct 2006 to today).
One regret is that during the 2007 fall we added a few too many small caps relative to the overall market weightings. They had already had a pretty hefty pullback after the summer correction. Had we not done so, the out-performance would have been more dramatic. I am particularly impressed that we have held up this well with a portfolio beta of .95.
One can never tell how big a correction there will be until it is in the rear view mirror. It helps that it is happening from a recent history of decent profits and not-excessive valuation. Certainly recessions themselves change the valuation landscape, but recessions do not last forever, and companies that can sustain dividends will emerge strong. We expect dividend growth rates to taper somewhat, but overall we think our excellent dividend growth will continue.
One regret is that during the 2007 fall we added a few too many small caps relative to the overall market weightings. They had already had a pretty hefty pullback after the summer correction. Had we not done so, the out-performance would have been more dramatic. I am particularly impressed that we have held up this well with a portfolio beta of .95.
One can never tell how big a correction there will be until it is in the rear view mirror. It helps that it is happening from a recent history of decent profits and not-excessive valuation. Certainly recessions themselves change the valuation landscape, but recessions do not last forever, and companies that can sustain dividends will emerge strong. We expect dividend growth rates to taper somewhat, but overall we think our excellent dividend growth will continue.
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Tuesday, January 1, 2008
Happy New Year!
It's been a great 2007 for our dividend growth strategy, and we're looking forward to another great year in 2008. Although we're currently expecting a modest year for stocks in general of 8-11%, we expect our total return with dividends to reach 12-15%.
If we get a recession it is obvious that goal will not be met, but we should get superior relative performance in an economic downturn.
My prediction is a flat market for the first four to six months and much stronger in the second half, but it is only a guess. Truth be told, does it really matter? If our holdings maintain a high QDV, then our performance expectations are met. If we get a recession, I expect our portfolio QDV would drop to around 15% from our current level of around 22%. Still, this is a very decent level of dividend growth.
I hope you have a happy and prosperous 2008!
If we get a recession it is obvious that goal will not be met, but we should get superior relative performance in an economic downturn.
My prediction is a flat market for the first four to six months and much stronger in the second half, but it is only a guess. Truth be told, does it really matter? If our holdings maintain a high QDV, then our performance expectations are met. If we get a recession, I expect our portfolio QDV would drop to around 15% from our current level of around 22%. Still, this is a very decent level of dividend growth.
I hope you have a happy and prosperous 2008!
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