Hey there and welcome to the second of my “Portfolio and Dividend Updates”! Although I’ve been working on this site for a few months now, I only recently felt comfortable putting the word out… so it’s likely you’re new here. On that note, I obviously value any support and hope you find something interesting here – my goal, time permitting, is to have 2 posts a week. But enough with the social graces, let’s start the fun.
(skip this section if you read last month’s instalment)
I’m fairly new to dividend investing. Up until a few months ago, I was buying stocks mainly for gains, while dividends were hardly even an afterthought. I had been investing like this for almost 8 years, and while I came out ahead, the effort was just too great. I decided sometime last year that I wanted something simpler that didn’t require that I look over my entire portfolio every few days to figure out the best time to sell. With the dividend growth method, I felt I could accomplish this. While the gains might not be as great, I felt the stress and effort would be considerably less. Since making this decision, I’ve gutted my former portfolio and put the money into a high interest account (which means pretty much no interest, lol) and have slowly built a new dividend growth portfolio. So far, I gotta say that I prefer this way of investing.
Here’s my new strategy in point form:
- Limit my exposure to $2000 per company.
- Find companies that have dividend yields of more than 2% but less than 6%.
- Make sure said companies have a history of increasing their dividends of at least 5 years.
- Look over financial statements for steady increases in revenues, profits, etc.
- Scour the media for opinions/POVs to get a general sense/consensus on the stock.
I bought 105 shares of Manulife Financial Corp this month for around $2000. You can read about this purchase in more detail here.
Manulife is a staple in many Canadian portfolios and is generally considered to be a safe bet. They manage over a trillion dollars in assets and are experiencing rapid growth in Asia while seeing steady growth in Canada. From a dividend growth perspective, they’ve increased their dividends by 20% in the last year alone, and despite recent problems due to low interest rates and lower oil prices, many analysts believe that the company will emerge healthier than before.
Gains / Losses
Six words: I am back in the black!
Although I don’t really worry about gains and losses anymore, since I’m in it for the long haul (and dividends), I still like to look at them every so often to get a general sense of where the market is going. On that note, it’s great to know that my overall investment portfolio is back in the black. At the beginning of the month I was behind by about $500 and have managed to bounce back with a relatively healthy surplus of $350-$450.
So why the upswing? From what I understand, it’s mostly due to oil recently rebounding to pre-2016 prices — although that seems to have changed today as investors once again focus on the oil glut, bringing down the price of crude and the market along with it. I think most will agree that 2016 has been a rollercoaster ride. Needless to say, I think it’s a safe bet that the “oil problem” isn’t going to be solved any time soon.
On the positive side, most of my losses from the Shaw/Telus fall out from a few months ago (as described in my previous Portfolio & Dividend Update) is slowly fixing itself — at least on the Telus front. While most of my loses with Telus have been eliminated, Shaw remains a minor blight in my portfolio. Thankfully Shaw is on the upswing as well, sitting at just over $25 a share from a previous 52wk low of $22.55 in February.
On the American front, both Caterpillar and Johnson and Johnson are performing remarkably well! At first I was worried that I had made a mistake buying into Caterpillar, since the stock dropped by a considerable amount almost immediately after buying it. Thankfully, it has recovered since then and is back in the black. JNJ on the other hand has been a solid performer ever since I bought it. The only negative point is that my gains are being offset by the increasing value of the Canadian dollar. In fact, the CAD has gained almost 10 cents against the USD in the last two months alone! My biggest question now is if it’s a good time to start buying American companies again?
Since last months’s Portfolio and Dividend update, only the Royal Bank of Canada has announced a dividend increase — and a very modest 2.53% at that. While I would normally be disappointed by such a low amount, RBC has a tendency to increase their dividends every 6 months, which means I should expect another increase sometime in the fall. Provided this happens, and it’s of the same amount, I’ll be more than happy with the overall 5% increase.
On the payouts front, February was a bit of a downer since I only made about $25. I was expecting to make more in February, but unfortunately I missed the deadline for two of my stocks by a week or so. Had I bought these stocks sooner, I would have made more than $70 like I did in January. Thankfully March was a better month overall, since I’ll make around $50 once Shaw pays it’s monthly dividend in the next couple of days. My hope is to make more than $100 in a single month sometime in 2016. I’m pretty sure I’ll be able to achieve this.
So this concludes this month’s portfolio update. I’m pretty happy with how things are going, especially when you consider the rollercoaster ride that 2016 has been up until now. Sadly, I don’t think the ride is over, and things could potentially get worse in the coming months. There’s no way to really tell, however, and I’ll just wait and see what happens. In the meantime I’ll continue buying into one or two more companies every month and see where that takes me.
How about you? How is your portfolio doing? Are you worried about where 2016 is headed? Feel free to leave a comment below.
As always, thanks for reading!