Summer time is a great time for investor to take a moment as it marks a relative pause in the stock market. The stock market continues to go up and down but we all have more time to think about our investments as vacations approach. I also like to take a look at my portfolio after 6 months to verify my performance and see where I’m going and if I’m aligned with my investing goals.
My Investing Goals for 2013
I had 3 simple but straightforward goals for my portfolio in 2013:
#1 Buy more consumer stocks
#2 Set up DRIPs to increase my positions
#3 Buy a US ETF (following the S&P 500)
I previously mentioned that my asset allocation was too concentrated in techno stocks. At one point, I held Seagate Technology (STX), Intel (INTC), Apple (AAPL) and Telus (T). I sold STX to increase my position in consumer stocks in order to meet my first investing goal and reduce my portfolio volatility. With this money, I added 2 great consumer stocks with McDonald’s (MCD) and Walt Disney (DIS). I also updated my dividend holdings and this is what my asset allocation look like right now:
As you can see, I’m still heavily invested in techno stocks but I increased considerably my position in consumer stocks since my last asset allocation update back in 2011. With such movements within my portfolio, I wanted to build a solid core where stock values would be more stable and provide strong dividends. Companies such as Coca-cola (KO), Johnson & Johnson (JNJ) and McDonald’s (MCD) are keepers for several years if not for life. The key is also to buy diversified sub-sectors. For example, KO and MCD are in the food industry but DIS and JNJ are far from it. It should bring great stability and strengthen my asset allocation.
I included Telus (T) in my techno stocks but I could have put it in telecoms as well since their business is mostly related to mobile services. Techno stocks were great to me as I had made over 60% on my trade with STX and both Telus and Intel give pay dividends and show value appreciation at the same time. I took a mid-term bet on Apple since I believe the company will continue to grow its dividend and looks like Microsoft (MSFT) in term of sales growth and liquidity management in the upcoming years.
My position in financials has also dropped greatly and this is because I fear a Canadian housing bubble burst. I now hold only two positions in ScotiaBank (BNS) and National Bank (NA) and I don’t expect to add any financials for the moment. I might look at some US banks now that they have cleaned up their balance sheets though…
Energy and resources are still an important part of my portfolio since Chevron’s (CVX) value has greatly increased since I bought it. 5N Plus (VNP), my only non-paying dividend stock, has come back slightly due to a dispute settlement and better financial results. The company is still not doing as well as expected but recent news is opening the door for hope in this case.
I have failed so far to start DRIPs on my main holdings and this was due to pure procrastination. I guess this is probably one of the most common investor flaws; not acting right away when they establish investing rules for themselves.
It’s the same thing with my ETF goal. However, I’ve ran through several ETFs tracking the S&P 500 and I’ll likely go with the biggest ETF of all, SPY. Due to its size, management fees linked to it are minimal. I will eventually sell my position in the Altamira US index fund and use this money along with cash in my account to purchase the ETF. This should be done during summer time.
How Were My Predictions for 2013?
As you know, I am tracking my best dividend stocks for 2013 at the beginning of each month. In my latest update, I beat the US market by almost 9% and I’m slightly over the Canadian market by 0.70%. I believe this isn’t luck as I stuck to the US index and beat the Canadian index by over 6% in 2012 with my selections. This year, I’m looking at beating both markets. I’ve spent the past four years establishing a solid and easy-to-follow method to select dividend stocks and manage my asset allocation. I want to make money with my investments but I’m like you, I don’t have all day to spend in front my computer to make it happen!
These stock selections were made based on strategies detailed in my book; Dividend Growth; Freedom Through Passive Income and from The Successful Investor newsletter, a very effective investing newsletter covering Canadian stocks.
How’s Your Portfolio so Far?
Have you made any chances in your asset allocation lately, any interesting trades?