Tuesday, September 29, 2015

Recent Buy - ABT

Money is really tight for me this month. However, I managed to scrape enough capital to make a final purchase for the month.

On Monday, I bought around 26 shares of Abbott Labs (ABT). This is a new position.

Action
Security
Price
Quantity
Amount
Buy
ABT
$39.24
26
$1027.19

This purchase increases my forward dividends by $24.96..

Sunday, September 27, 2015

Relationship between Fed balance sheet and the S&P 500 index

The intervention of the US Federal Reserve Banks has been useful to get the US out of the recession. There has been a huge excess of liquidity poured in the financial market. You can read the details of the “QE” and “LSAP” efforts from the Fed here: https://www.stlouisfed.org/publications/regional-economist/january-2014/the-rise-and-eventual-fall-in-the-feds-balance-sheet

Whether intentional or not, there is now a tight correlation between the S&P index (i.e. the market) and the Federal Reserve Banks.



Sunday, September 20, 2015

Analyzing CCC List - Dividend Growth vs Years of Dividend Growth



David Fish’s CCC list is a wonderful resource. You can access it here: http://www.dripinvesting.org/Tools/U.S.DividendChampions.xls


As a quick summary, the CCC lists the Dividend Champions, Contenders and Challengers. It is  updated monthly with the name of every U.S.-listed stock that has raised its dividend each year for at least the past five years in a row, or in the case of the Champions, 25 years in a row.


There’s a wealth of information hidden in the data. For this article, I am looking at the relationship between the dividend growth and the years of dividend growth

Thursday, September 17, 2015

Metric: Dividend Growth Rate

Another important metric I look for is Dividend Growth. This is a key component in DGI investing. 

Without it, then I might as well invest in bonds. (Okay - maybe not.) However, when we get Dividend Yield and Growth together, we get the engine of DGI investing. Add compounding with reinvestment and you’ll have a very powerful and yet simple strategy for investing.

Let’s see some simple Dividend Growth examples.

Wednesday, September 16, 2015

Weekly Purchase 4 - UL


As you may know, I am now using Capital One's Sharebuilder plan for my weekly investments. I am doing this to enforce my strategy for regular investing. This method also helps me filter out some of the market noise which is quite loud these days. Lastly, it is helping me spread out my purchases.

For this week's purchase, I bought around 25 shares of Unilever (UL).

Action
Security
Price
Quantity
Amount
Buy
UL
$39.67
25.1116
$1000 + fees

This purchase increases my forward dividends by $32.65.

Monday, September 14, 2015

Portfolio Building Part 3 - Risk


As per my previous article (portfolio building part 2), my goal is to build a diversified portfolio with dividend growth stocks.

Risk

My diversification plan is to build a portfolio with 30 companies or more to reduce risk. In my simple mind, it is quite possible even for the bluest blue chip to go bust. 

Friday, September 11, 2015

Weekly Purchase 3 - IVZ



For this week's purchase through my weekly sharebuilder plan, I bought around 24 shares of IVZ. As you know, I am trying to improve and balance my holdings in my portfolio.(I am overweight with PG, XOM, TROW etc.)


Also, IVZ showed up in the September screen which looks for companies with lower than median P/Es and higher than median yields with good credit ratings and excellent chowder numbers.


Tuesday, September 8, 2015

Recent Buy - KMB


Per my earlier post, one company which has been in my watchlist since the beginning is Kimberly Clark (KMB). I believe it is currently trading close to fair value.


The current TTM P/E is around 60 which is a bit misleading since this is due to a one time charge of around 544 million. This is why you need to check the investor relation website to double check the numbers.

Sunday, September 6, 2015

Metric: Years of Dividends Growth

 

Years of Dividends Growth


When I analyze companies for inclusion in my portfolio, one useful metric is the number of years of dividends growth. The higher the number, the better. This little piece of data tells you a lot of things.

Friday, September 4, 2015

Opportunities


As I submit my weekly order for next Tuesday (since Monday is a holiday), I see quite a few opportunites. 

Ever since I implemented my weekly investment plan (to bulk up my smaller positions) I've been ignoring the market noise. But today, I had to check it due to deadline to submit the order. 

One candidate which has been in my watchlist since the beginning is Kimberly Clark KMB. I believe it is trading close to fair value. 

Tuesday, September 1, 2015

Weekly Purchase 2




The market went down again today, but I didn’t pay much attention. With my weekly purchase plan, I initiated the transaction on Monday. I had already planned out my weekly list in advance - so I didn't check the market until I received the email showing the trade.

The advantage of such a plan is that it takes me away from the market. The drawback is that CapitalOne seems to pick sub-optimal prices. Luckily, I am not too worried for not picking the best price for the day.

With my capital still low this week, I only bought a few shares of UTX

My decision is based on my new September Screen as well as current holding of UTX in my portfolio which is relatively low compared with my other holdings. I want to build up the other positions and diversify as well.