OVERALL VIEW as of March 1, 2010
Two portfolios are tracked here, the Capital Gains Portfolio and the Dividend
Portfolio.
These are not hypothetical or model portfolios. They contain real stocks
purchased with my own money. They include the frictional effects of commissions
and other transaction costs. No money has been added to or removed from either
portfolio since each was created, other than dividends received. These are
demonstration portfolios designed to illustrate the results that can be achieved by
applying the principles in my books, SENSIBLE STOCK INVESTING and THE TOP 40
DIVIDEND STOCKS series.
SUMMARY REPORT CARD
SEE THE DETAILED REPORT CARD FOR EACH PORTFOLIO BELOW
_________________________________________________________________
CAPITAL GAINS PORTFOLIO REPORT CARD
Since inception, this Portfolio has a gain of 46% vs. the S&P 500's loss of 5%.
Begun in 2001, the Capital Gains Portfolio focuses mainly on stocks and ETFs with the
potential for strong price growth.
Performance since inception:
Stocks and ETFs held in Capital Gains Portfolio as of February 1, 2010:
In the last week of January, an 8% trailing sell-stop on QQQQ (a Nasdaq-tracking ETF),
was hit, selling off about 6% of the portfolio. In early February, an 8% sell-stop on SPY (an
ETF that tracks the S&P 500) was hit, selling off more than 80% of the portfolio. Any
decisions to re-invest that money will depend upon favorable signs from the market and a
positive reading from my Timing Outlook.
Special Note: I provide market commentary and updates to my Timing Outlook in my
free Newsletter. Use the box to the right to sign up for the Newsletter. A new Timing
Outlook is published approximately every other week. To read an FAQ about the Timing
Outlook, click here.
____________________________________________________________________
DIVIDEND PORTFOLIO REPORT CARD
This portfolio (originally begun in 2002 with $40,000) was somewhat unfocused in the
beginning. It was gradually aimed toward generating increasing dividends, which has
become its permanent mission. I completely re-built this portfolio in 2008 using the
precepts of THE TOP 40 DIVIDEND STOCKS series.
A dividend portfolio has two key metrics. One, of course, is total performance. The other,
perhaps more important, is its ability to generate reliable and growing income streams
from dividends and distributions.
Total performance since origination:
Dividend generation / Income stream:
As dividend increases are declared and dividends are reinvested, the yield on the
original investment will rise over time. This is known as yield on cost.
Mathematically, yield on cost goes up because the divisor in the equation, Yield =
Dividends / Price, is fixed at the original $40,000. But the numerator will increase steadily
for the three reasons listed above.
Stocks held in Dividend Portfolio as of March 1, 2010:
The Dividend Portfolio contains almost no cash, as the accumulated dividends were used
in February to begin a new position in Alliant Energy (LNT). Under the rules governing this
portfolio, when the accumulating cash reaches $1000, the funds are re-invested in a
company from the current edition of THE TOP 40 DIVIDEND STOCKS. In 2009, I
purchased more shares of Abbott Labs with accumulated dividends, and now in 2010,
the new position in Alliant has been started. I expect one other opportunity in 2010 to add
to the portfolio's holdings by re-investing accumulated dividends.
It is by means of such re-investments, along with annual dividend increases, that the yield
on cost will rise as described above. To learn more about the combined effect of initial
yield + the stock's annual dividend increases, read this article: "10 by 10: A New Way to
Look at Dividend Yield and Growth."
Dividend History for Dividend Portfolio:
Year Dividends Received Yield on Cost Increase from Prior Year
2008 $1316 3.3%
2009 $1568 3.9% 19%
2010 $1709 [indicated] 4.3% [indicated] 9% [indicated]
The numbers for 2010 are all indicated values, meaning that they are based on current
dividend rates and increases already announced. As more dividend increases are
announced, and as additional shares are purchased with accumulated dividends, the
actual numbers for 2010 will go up.
The 2010 edition of my dividend e-book, THE TOP 40 DIVIDEND STOCKS FOR 2010:
How to Generate Wealth or Income from Dividend Stocks, is now available. Click
the cover image to the right for more information. The Dividend Portfolio here is run
entirely according to the principles and stocks presented in THE TOP 40 DIVIDEND
STOCKS series.
Two portfolios are tracked here, the Capital Gains Portfolio and the Dividend
Portfolio.
These are not hypothetical or model portfolios. They contain real stocks
purchased with my own money. They include the frictional effects of commissions
and other transaction costs. No money has been added to or removed from either
portfolio since each was created, other than dividends received. These are
demonstration portfolios designed to illustrate the results that can be achieved by
applying the principles in my books, SENSIBLE STOCK INVESTING and THE TOP 40
DIVIDEND STOCKS series.
SUMMARY REPORT CARD
- The Capital Gains Portfolio has increased in value 46% vs. the S&P 500's
loss of 5% since the portfolio was created in 2001. That is 54% out-
performance compared to the index. The portfolio has delivered a
significant positive gain during a period when the market overall has
declined. It has not been a "lost decade" for this portfolio.
- The Dividend Portfolio is also ahead of the S&P 500 since its creation in
2002. It has gained 6% in total value vs. the S&P 500's loss of 4% in the
same time period. But its real purpose is to generate growing dividends. It
is doing that: In 2009, the portfolio took in 19% more dividends than in
2008. Its yield will continue to rise as dividend increases are declared, new
shares are purchased with incoming dividends, and occasional stock
swaps are made.
SEE THE DETAILED REPORT CARD FOR EACH PORTFOLIO BELOW
_________________________________________________________________
CAPITAL GAINS PORTFOLIO REPORT CARD
Since inception, this Portfolio has a gain of 46% vs. the S&P 500's loss of 5%.
Begun in 2001, the Capital Gains Portfolio focuses mainly on stocks and ETFs with the
potential for strong price growth.
Performance since inception:
- Portfolio begun April 1, 2001 with $50,000
- S&P 500 at beginning date: 1160
- Current value of portfolio (March 1, 2010): $73,217 (+46%)
- Current value of S&P 500: 1104 (-5%)
- Portfolio vs. S&P 500: +54%
Stocks and ETFs held in Capital Gains Portfolio as of February 1, 2010:
- IBM (IBM)
- Cash 86%
In the last week of January, an 8% trailing sell-stop on QQQQ (a Nasdaq-tracking ETF),
was hit, selling off about 6% of the portfolio. In early February, an 8% sell-stop on SPY (an
ETF that tracks the S&P 500) was hit, selling off more than 80% of the portfolio. Any
decisions to re-invest that money will depend upon favorable signs from the market and a
positive reading from my Timing Outlook.
Special Note: I provide market commentary and updates to my Timing Outlook in my
free Newsletter. Use the box to the right to sign up for the Newsletter. A new Timing
Outlook is published approximately every other week. To read an FAQ about the Timing
Outlook, click here.
____________________________________________________________________
DIVIDEND PORTFOLIO REPORT CARD
This portfolio (originally begun in 2002 with $40,000) was somewhat unfocused in the
beginning. It was gradually aimed toward generating increasing dividends, which has
become its permanent mission. I completely re-built this portfolio in 2008 using the
precepts of THE TOP 40 DIVIDEND STOCKS series.
A dividend portfolio has two key metrics. One, of course, is total performance. The other,
perhaps more important, is its ability to generate reliable and growing income streams
from dividends and distributions.
Total performance since origination:
- Origination date: April 1, 2002: $40,000
- S&P 500 at origination date: 1147
- Current value of portfolio (March 1, 2010): $42,431 (+6%)
- Current value of S&P 500: 1104 (-4%)
- Performance vs. S&P 500: +10%
Dividend generation / Income stream:
- Total dividends received in 2010: 3812
- Indicated dividends over next 12 months: $1709 (Source: E*Trade's Income
Estimator) - The actual dividends received in 2010 will be higher, for three reasons.
- The Income Estimator does not include dividend increases until they are
declared by each company. Therefore, dividend increases to be declared in
2010 are not included yet. - Dividends on additional shares that will be purchased with accumulating
dividends are not included yet. - I may make a couple of changes to the portfolio to increase its yield. The
impact of these changes is not reflected yet.
- Based on E*Trade's $1709 indicated dividends over the next 12 months...
- Yield on present value of portfolio ($42,431): 4.0%
- Yield on original value of portfolio ($40,000): 4.3%
- For comparison, S&P 500's current yield is about 2.0%
As dividend increases are declared and dividends are reinvested, the yield on the
original investment will rise over time. This is known as yield on cost.
Mathematically, yield on cost goes up because the divisor in the equation, Yield =
Dividends / Price, is fixed at the original $40,000. But the numerator will increase steadily
for the three reasons listed above.
Stocks held in Dividend Portfolio as of March 1, 2010:
- Abbott Labs (ABT)
- Alliant Energy (LNT) (new position begun in February, 2010)
- AT&T (T)
- Chevron (CVX)
- Diageo (DEO)
- Emerson Electric (EMR)
- Kinder Morgan Energy Partners (KMP)
- McDonalds (MCD
- Realty Income (O)
- Pepsico (PEP)
- Royal Bank of Canada (RY)
- Sherwin Williams (SHW)
- Telefonica (TEF)
The Dividend Portfolio contains almost no cash, as the accumulated dividends were used
in February to begin a new position in Alliant Energy (LNT). Under the rules governing this
portfolio, when the accumulating cash reaches $1000, the funds are re-invested in a
company from the current edition of THE TOP 40 DIVIDEND STOCKS. In 2009, I
purchased more shares of Abbott Labs with accumulated dividends, and now in 2010,
the new position in Alliant has been started. I expect one other opportunity in 2010 to add
to the portfolio's holdings by re-investing accumulated dividends.
It is by means of such re-investments, along with annual dividend increases, that the yield
on cost will rise as described above. To learn more about the combined effect of initial
yield + the stock's annual dividend increases, read this article: "10 by 10: A New Way to
Look at Dividend Yield and Growth."
Dividend History for Dividend Portfolio:
Year Dividends Received Yield on Cost Increase from Prior Year
2008 $1316 3.3%
2009 $1568 3.9% 19%
2010 $1709 [indicated] 4.3% [indicated] 9% [indicated]
The numbers for 2010 are all indicated values, meaning that they are based on current
dividend rates and increases already announced. As more dividend increases are
announced, and as additional shares are purchased with accumulated dividends, the
actual numbers for 2010 will go up.
The 2010 edition of my dividend e-book, THE TOP 40 DIVIDEND STOCKS FOR 2010:
How to Generate Wealth or Income from Dividend Stocks, is now available. Click
the cover image to the right for more information. The Dividend Portfolio here is run
entirely according to the principles and stocks presented in THE TOP 40 DIVIDEND
STOCKS series.
| SENSIBLESTOCKS .COM |
| Dedicated to the success of the individual investor |
| March, 2010 Portfolio Updates |
| ||||||||||
| Click on either cover image below to learn more about each publication |
| ||||||||||
| SUBSCRIBE TO FREE NEWSLETTER |
Price $39.00
Price $39.00