The Dividend Guy’s April Dividend Portfolio Review
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Time is your friend; impulse is you enemy. This quote from John Bogle really sums up the necessary thinking during the first quarter of the year and the start of quarter two. After the market drop we saw to start the year out and then in the last couple of weeks the market trying to rally and adding significant value it confirms the importance of not acting on impulse. The market is going to go down, and then it will go up, and then it will go down, and then it will go up….you get the picture. While watching the news or reading the paper, it is important not to get worked up and make decisions that are not based on research and confirmed facts. Investing is nothing more than time and having the patience to wait things out. Of course a properly diversified portfolio will help with the swings, but over time history has shown us that markets go up.
In terms of my own personal portfolio, volatility was as high as I have as I have seen it for a long time. Once again this volatility was driven by the financial markets, however the earnings surprise by GE didn’t help.
I am not happy with GE’s action and feel that hey are rightly being punished in the markets. Above all else the stock market likes consistency and doing what you say you will. When one month you give a positive outlook and then the next month you come out with a very different story, then your stock deserves to take a dive. Trouble is I own the stock and my portfolio has suffered some exasperated short-term paper losses that I think could have been avoided. Wake up GE and start managing your news releases better.
I completed a couple of transactions this month as I wrote about here, here, and here. As a summary, here is what happened:
• To assist with my overweighing of Canadian stocks and to avoid having too much in my employer shares, I sold some Talisman Energy.
• Sold my holdings in Epcor Income trust. I was not tracking this stock and wanted to have only index funds as my income trust holdings.
• Initiated a position in the Vanguard U.S. REIT ETF (VNQ) to broaden my REIT holdings to include both Canadian and U.S. properties.
• Initiated a position in the Vanguard Emerging Market ETF (VWO) to broaden my global holdings away from just large-cap developed global locations.
• To further diversify my small-cap holdings, I bought some iShares Russell Midcap Index ETF (IWC).
• To add some diversification to my bond holdings, I took a position in the iShares Canadian Real Return Bond Index fund (XRB).
The purpose of these transactions was diversification. It is my hope that with the additional diversification I have achieved, my portfolio returns will be better with less volatility.
So what does my portfolio look like this month. The following tables and charts will give you a clear picture of how this shape up. Of course, as a reminder this is my portfolio and it works for me but may not work for you. I do not suggest you copy it in any way!!!!
The Portfolio
Click to EnlargeMy Asset Allocation
Click to EnlargeMy Sector Allocation
Click to EnlargeThere you have it – my heart on the table so to speak. Please feel free to comment away…
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5 Comments on this post
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Jonathan said:
Hey Dividend Guy – What software do you use for your portfolio you displayed in this post and the asset allocation you displayed?
April 28th, 2008 at 10:40 am -
Dividends4Life said:
I’ve held VNQ since last August. It is currently my best Income ETF performer, but it has also been my worse at times (i.e it can be volatile). VWO sounds interesting. I too need to increase my international exposure.
Best Wishes,
D4LApril 28th, 2008 at 10:59 am -
Silicon Prairie said:
Impulse can be your friend – you just need to listen to the right one. If you plan to keep investing in a particular stock/index/sector for decades to come before you need to start taking money out of it, the impulse you should feel when it gets 10% cheaper is to find all the cash you can spare and buy while the price is low! Of course that may be more difficult with individual dividend stocks than with a large-cap index but as long as you’ve made a long-term commitment to keep investing, there’s no better time than when people are practically giving away good assets.
It’s always hard to know where the bottom is (by some estimates the US stock market may have a couple more years of declining values before it reaches its true value) but as long as you’re in buying mode it’s a great sign when things are sinigificantly cheaper than they were a day, week, month, or quarter earlier. Anyone who feels bad when the price of something they buy continually goes down needs to re-think their plan!
April 28th, 2008 at 12:45 pm -
Dividend Growth Investor Carnivals, Festivals and Blogs - April 29, 2008 said:
…[The Dividend Guy reviewed his portfolio in The Dividend Guy’s April Dividend Portfolio Review]…
April 29th, 2008 at 8:42 am
Disciplined Stock Investing…
Be wary of investing processes which rely heavily on the \”tea leaf\” reading of stock charts or graphs. Technical analysis can be valuable but ultimately there should be a foundation of solid, clearly understood metrics….