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Market is cheaper. There are some good deals around, wish I had more cash. Each dollar invested now pushes my annual dividend up much higher than before's purchases.
Bought $1200 of 3M
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The last two weeks have been a godsend for me. I am seeing 10% discounts across the board for some high quality companies that have absolutely no change in fundamentals. I have no idea why the market is reacting the way it is. Some say it's because of rising interest rates. Others say it's due to margin calls due to over leverage on the volatility derivatives. To me, the companies I own have still the same fundamentals a month ago as they do now, and I do not see any danger in any of the companies I own in regards to their dividend payout ratios. All that has changed for me is the lower purchase price which makes buying a lot easier as yield % have gone up on every single company. This makes every single dollar that I put to work now much more effective than the dollars I deployed a month ago. Everyone is panicking but I do not understand the mindset. I am finding the opportunities given in this period to be positive especially given the tail winds many of these companies are experiencing (i.e. lower tax rates and repatriation and expanding markets and weaker dollar).

My strategy this time is to load up on the highest quality dividend paying companies in sectors that I am too underweight in. Since I have around 1/3 my portfolio in consumer staples, I want to pay less attention to that sector. I will focus on industrials (6% weight) and healthcare (14% weight) first. Since these more cyclical sectors tend to have a higher beta, they should have larger pull back percentages than pullbacks seen in the consumer staples space. Materials (1% weight) and Tech (2% weight) are sectors I will also be looking at but those are sectors I do not have such a high priority in. I only have so much money to go around when buying. For financials (9%) I will be only looking at Visa and Mastercard which to me are very expensive and I already have quite a lot of both (their yields % are quite low for me), so those two are lower priority.

For REITs, I do not plan to add more in the short term. I will only reinvest the high % dividends. REITs do not do so well in rising interest rates and I have enough position in "O" to make me happy. I do want more utilities, it's one of my favorites sectors. However I think there is more room to fall given the headwinds and negative narrative of rising interest rates. The companies in that sector are just way too overvalued given the rising rate environment. There's better names elsewhere to get with a higher growth rate for the same P/E ratios than sticking to the overvalued companies in the utilities sector. The only exception I would say is NEE which I always am looking forward to add. I prefer to prioritize purchasing companies that I feel have a higher propensity to "spring" back up due to a positive growth environment (industrials and defense companies for example) instead of companies that will have a negative narrative (rising interest rates) looking forward for a long time.

Today I bought:
$457 - MMM
$422 - GD
$322 - ITW

All three are industrials that pulled back recently.
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APD yields 2.60% when I bought it. I bought 6 shares so around $1014.

APD just raised its dividend a massive 16%. They also just announced earnings. The guidance going forward was boosted as expected due to tax changes. Revenue was up 18% Y/Y. And they beat by 14cents out of 1.79$ which is impressive. The shares were down 2.75% when I bought them so I took the opportunity to add more to a dividend aristocrat after a beat and raise, I never can understand the logic or moves of the market.
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I bought JNJ after the 4% dip when announcing earnings. I felt the report was good and JNJ continues to excel, as usual.  One of the highest quality companies on Earth. AAA balance sheet.
I added 9 shares at around $142 or $1278 total.
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These shares were purchased last week on 1/19/2018.

SO was sold in taxable account: $2579.
T was bought in its place: $2698
SO yields a bit lower than T when I bought T.
Commission for above was $0

WEC: $1400 bought in 401k
Commision for this transaction was $7.95

Rest of purchases are in taxable account. The trades are free with due to the balance of my account with my broker.

TJX: $157
T: $111
HD: $200
MKC: $100
WEC: $126
XEL: $135
MA: $167
MMM: $248
ITW: $172
ADP: $121
NEE: $150
D: $75
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I'm a little late with my 2017 year end portfolio summary post. So I will post using data as of today. My portfolio is growing and 2017 was a very healthy year for the market. New policies from the new Trump administration have benefited businesses. From lower regulation, repatriation, and lower corporate taxes, the stock market is surging to all time highs. The cyclical business names are on fire and rising every day, it is nearly impossible to buy these types of companies at fair prices anymore. The more defensive sectors have not run as quickly but have benefited no doubt. Due to the growth in 2017 of all sectors, my portfolio has reached all time highs. Buying companies at previous old price target numbers is now impossible. Almost everything is expensive and I have to now re-calibrate my price targets with future outlook in mind, since most American companies are now having huge tailwinds from the tax cut. The economy of the world has also grown very nicely in 2017 and the outlook for 2018 is positive, which fuels the growth.

For 2018 I am expecting higher dividend raises due to the lower tax rates and repatriation and more buybacks to fuel earnings per share growth. Also for 2018, I am expecting rates to go up as the Fed is going to have to start hiking due to all the growth in the economy. As rates go up, I expect high yielders and debt heavy industries like Utilities and REITs will see their prices fall (although utilities I have to say will benefit a lot from the reduced tax rate from high 30%s to low 20%s), presenting good buying opportunities. In 2018, I am expecting my portfolio's average yield to go down. It has already moved from an average of 3.0% yield when I started to 2.5% right now. As prices rise above the rate of dividend payout increases, the yields start to fall which makes me sad because each of my stock purchases in 2018 won't be able to contribute so much dollar in income as they used to.

I will start off with a chart of the S&P500 this year. The chart is quite incredible. Although I am more after the income stream my investments can generate for me, I cannot lie and say I am not enjoying the large rise of my assets on paper. From the chart above (Jan 20 2017 to  Jan 19 2018), the S&P500 has gained a massive 24% and this does not even include the dividends.


For new readers, the goal of this blog is to document my investing progress. This portfolio is based off the dividend growth investing philosophy. My goal is to achieve a high level of passive income from corporate stock. I want the companies to grow their dividends each and every year, at a rate healthy to their rate of growth. I want my companies to have a healthy payout ratio and be financially secure. The health of the dividend and the growth of the dividend is of highest priority. Capital gains is icing on the cake for me. 2017 had quite a lot of icing in addition to good dividend growth. All of my portfolio holdings pay a dividend to a degree, some large some small.

My net worth has increased from $280,000 in the beginning of 2017 to around $440,000 as of today (January 19, 2018). A large part of this is from my income and savings. But another significant portion is from the portfolio doing work on its own. I have a large goal milestone in 2018, the 1/2 million dollar mark. It is starting to seem that each next $100,000 is becoming easier to achieve than the previous one. The first $100,000 was definitely for me the hardest.

When I began investing, large percentage increases in the market did not really affect me since my portfolio value was small relative to how much I was adding every week (see the Jan 2014-Jan 2016 period, the portfolio basically moved up predictably as my contributions were so large relative to market gains). Since my portfolio is a chunky 6-figure size right now, market moves that are high (like the S&P500's 24% gain mentioned earlier) make huge impacts on my net worth. A 24% gain on $440,000 will be $105,600 which is visible.


In terms of dividends, the trend is more predictable. Dividends are based off what a company is capable of paying its shareholders so this trend tends to be more stable and predictable. As of 2017 I have increased my dividend output from $6800 a year to now $10,800 a year. All of the companies that I held in 2017 increased their dividend. On average in 2017, my dividends were increased (average of whole portfolio) by 9.49% and the average yield of my portfolio was 2.62%. All dividend cash received was reinvested back into the portfolio. In total my portfolio was able to increase its income by 9.49+2.62% which is around 12% which is exceptional.

To summarize this year's dividend growth performance with my earlier years I summarized my performance in this table:
Year Dividend Growth Dividend Yield Total Income Growth
2014 10.30% 2.81% 13.11%
2015 9.68% 2.94% 12.62%
2016 10.11% 2.76% 12.87%
2017 9.49% 2.62% 12.10%

For the portfolio, here are my holdings as of 1/19/2018:

Name Ticker Sector       Value   Weight        Divies      Yield S&P Fin VL Fin VL Safety
Altria Group Inc MO Staples $38,690.84 8.80% $1,436.22 3.7120% A- B+ 2
Philip Morris International Inc PM Staples $35,699.13 8.12% $1,402.79 3.9295% A B++ 2
Johnson & Johnson JNJ Health $27,326.07 6.21% $623.07 2.2801% AAA A++ 1
Home Depot Inc HD Discret $25,540.16 5.81% $451.61 1.7682% A A++ 1
Visa Inc V Financial $24,303.16 5.53% $154.49 0.6357% A+ A++ 1
Becton Dickinson and Co BDX Health $18,254.00 4.15% $233.52 1.2793% BBB+ A++ 1
NextEra Energy Inc NEE Utilities $16,972.60 3.86% $444.21 2.6172% A- A 2
PepsiCo PEP Staples $16,378.69 3.72% $438.87 2.6795% A A++ 1
Ross Stores Inc ROST Discret $15,266.48 3.47% $116.65 0.7641% A- A 2
3M Co MMM Industrial $13,821.96 3.14% $261.76 1.8938% AA- A++ 1
AT&T Inc T Telecom $13,801.68 3.14% $741.83 5.3749% BBB+ A++ 1
Realty Income Corp O REIT $13,637.13 3.10% $674.93 4.9492% BBB+ A 2
Mastercard Inc MA Financial $13,424.83 3.05% $80.47 0.5994% A A++ 1
McCormick & Company MKC Staples $11,880.57 2.70% $249.13 2.0970% A- A+ 1
Procter & Gamble Co PG Staples $9,338.12 2.12% $283.00 3.0306% AA- A++ 1
Kimberly-Clark KMB Staples $8,990.05 2.04% $302.03 3.3596% A A++ 1
Illinois Tool Works Inc. ITW Industrial $8,852.09 2.01% $160.18 1.8095% A+ A++ 1
Dominion Resources, Inc D Utilities $8,844.07 2.01% $363.25 4.1072% BBB+ B++ 2
Automatic Data Proc, Inc ADP Tech $8,760.40 1.99% $181.79 2.0751% AA A++ 1
The Coca-Cola Co KO Staples $8,621.89 1.96% $270.58 3.1383% AA- A++ 1
Medtronic plc MDT Health $8,302.31 1.89% $176.24 2.1228% A A++ 1
Xcel Energy Inc XEL Utilities $7,874.03 1.79% $251.24 3.1908% A- A+ 1
Starbucks Corporation SBUX Discret $7,733.36 1.76% $151.49 1.9589% A A++ 1
Church & Dwight CHD Staples $7,504.68 1.71% $114.28 1.5227% BBB+ A+ 1
Clorox Co CLX Staples $6,982.66 1.59% $163.09 2.3356% A- B++ 2
TJX Companies Inc TJX Discret $6,619.98 1.51% $104.89 1.5845% A+ A++ 1
Air Products & Chemicals, Inc APD Materials $5,911.09 1.34% $133.86 2.2646% A A+ 1
McDonald's Corporation MCD Discret $5,736.88 1.30% $131.60 2.2939% BBB+ A++ 1
WEC Energy Group, Inc. WEC Utilities $5,625.02 1.28% $196.98 3.5018% A- A+ 1
Kraft Heinz Co KHC Staples $5,165.78 1.17% $162.12 3.1383% BBB- A 2
Colgate-Palmolive Co CL Staples $4,857.44 1.10% $100.28 2.0645% AA- A+ 1
Stryker Corporation SYK Health $4,694.60 1.07% $54.72 1.1657% A A++ 1
General Mills, Inc. GIS Staples $3,849.36 0.88% $127.64 3.3159% BBB+ A+ 1
Abbott Laboratories ABT Health $3,577.83 0.81% $67.56 1.8884% BBB A++ 1
General Dynamics Corporation GD Industrial $3,345.60 0.76% $53.76 1.6069% A+ A++ 1
Southern Co SO Utilities $44.22 0.01% $2.31 5.2205% A- A 2
Misc Type ……….. Partial Totals Weight Yr Dividends  Avg Yield …..832 …..9 …..82
Equity Stocks $426,228.77 96.91% $10,862.43 2.5485%
Investable US Dollars $8,170.60 1.86%
Miscellaneous Assets $5,400.00 1.23%
. .. Equity + Misc Weight …..2 ….. …..222 …22 …..223
Total $439,799.37 100.00%

I now have a lot of 5-figure portfolio positions. Some of them are getting quite large. For example, MO and PM are over $30k. JNJ, HD, and Visa are all over $20k. I have not really expanded into many new companies in 2017. I have mostly already found which companies I like best to invest in and tend to stick to those. I did add General Dynamics to my industrials in 2017. Overall, most of the portfolio was business as usual. Dump extra money into whatever looks like a good buy and reinvest the dividends. Rinse and repeat.


Most of my portfolio is saturated in consumer staples companies. Since the 2017 rally was predominantly technology, industrials, materials, and discretionary, I did not participate as fully in the rally due to my over weighting in staples. However, my portfolio's focus is not on capital gains but in the growth of the income. All the consumer staples companies I held increased their payouts handsomely in 2017 and they all have good yields compared to the more cyclical companies. I also want to invest with the long term outlook. A good year is a good year, but I do not have to chase growth in order to achieve my goals. As long as the income stream flows in every month, I am content. The sector distribution of my portfolio will not have such a large alpha during cyclical good years; however, it ensures a less volatile price trend when things do go bad. And on good years, this portfolio sector balance still benefits with a healthy dividend payout ratio. It is a balance between volatility and reward that I have decidedly settled on when I began investing.

Best wishes to all investors in 2018. I will post my recent buys for January 2017 soon.
-YD
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One may have their own personal opinions about Trump. But one thing is certain. He is making me a lot of money at the moment. He is a businessman and his approach to running the White House definitely is benefiting big business. When businesses succeed, the owners of those businesses (the shareholders) succeed. I expect large dividend increases, M&A, earnings expansion, and large buy backs in the coming months or years.

Under the new president, tax rates are now 22% (or something much lower) compared to the high 30%s that used to burden USA businesses. I ran through my portfolio checking what the average taxes paid for each my companies are. The numbers are averages, and I tried to ignore one time expenses or charges (one offs).

I found a lot of companies that are centered in the USA (not so much international) will benefit severely from this tax change. I expect they will profit handsomely and my price targets have changed quite drastically for these names. A lot of these are brick and mortar, utilities, restaurants, or companies that operate solely in the US and are based in the US (no shady tax dodging overseas setup).

Name Ticker Sector       Value   Weight        Divies      Yield Tax Rate
TJX Companies Inc TJX Discret $6,297.55 1.45% $102.39 1.6259% 38%
WEC Energy Group, Inc. WEC Utilities $3,886.67 0.90% $135.10 3.4759% 38%
Ross Stores Inc ROST Discret $15,017.97 3.47% $116.42 0.7752% 37%
Home Depot Inc HD Discret $24,501.88 5.66% $448.05 1.8286% 36%
Visa Inc V Financial $23,736.68 5.48% $154.49 0.6509% 36%
Altria Group Inc MO Staples $37,889.92 8.75% $1,423.10 3.7559% 35%
Southern Co SO Utilities $2,669.53 0.62% $136.87 5.1271% 35%
Church & Dwight CHD Staples $7,423.49 1.71% $114.28 1.5394% 34%
Xcel Energy Inc XEL Utilities $7,395.83 1.71% $233.96 3.1634% 34%
AT&T Inc T Telecom $10,904.35 2.52% $597.83 5.4825% 33%
Starbucks Corporation SBUX Discret $7,574.30 1.75% $151.49 2.0000% 33%
McDonald's Corporation MCD Discret $5,647.95 1.30% $131.60 2.3300% 33%
Dominion Resources, Inc D Utilities $8,302.07 1.92% $335.53 4.0415% 32%
Automatic Data Proc, Inc ADP Tech $8,290.95 1.92% $178.30 2.1505% 32%
Clorox Co CLX Staples $6,891.90 1.59% $163.09 2.3664% 32%
Colgate-Palmolive Co CL Staples $4,672.54 1.08% $100.28 2.1462% 32%
General Mills, Inc. GIS Staples $3,782.93 0.87% $127.64 3.3741% 32%
NextEra Energy Inc NEE Utilities $16,860.53 3.89% $440.28 2.6113% 31%
Kimberly-Clark KMB Staples $8,717.29 2.01% $300.12 3.4428% 31%
Mastercard Inc MA Financial $12,788.33 2.95% $79.47 0.6214% 30%
Illinois Tool Works Inc. ITW Industrial $8,468.05 1.96% $156.33 1.8462% 30%
General Dynamics Corporation GD Industrial $3,288.16 0.76% $53.76 1.6350% 30%
Philip Morris International Inc PM Staples $34,320.42 7.93% $1,400.83 4.0816% 28%
3M Co MMM Industrial $13,252.73 3.06% $257.06 1.9397% 28%
Kraft Heinz Co KHC Staples $5,001.72 1.16% $162.12 3.2413% 28%
McCormick & Company MKC Staples $11,956.95 2.76% $246.24 2.0594% 27%
Becton Dickinson and Co BDX Health $17,517.72 4.05% $232.72 1.3285% 26%
PepsiCo PEP Staples $15,822.45 3.65% $435.90 2.7550% 25%
Abbott Laboratories ABT Health $3,556.11 0.82% $67.56 1.8999% 25%
Procter & Gamble Co PG Staples $9,243.78 2.14% $283.00 3.0616% 23%
The Coca-Cola Co KO Staples $8,417.12 1.94% $270.58 3.2146% 23%
Air Products & Chemicals, Inc APD Materials $5,987.53 1.38% $133.86 2.2357% 23%
Johnson & Johnson JNJ Health $26,849.50 6.20% $623.07 2.3206% 19%
Medtronic plc MDT Health $8,211.31 1.90% $176.24 2.1463% 18%
Stryker Corporation SYK Health $4,616.59 1.07% $54.72 1.1854% 17%
Realty Income Corp O REIT $13,619.44 3.15% $651.83 4.7860% 1%

I think this corporate tax policy will benefit greatly all corporations that are over 30% tax rate which is the majority of the portfolio. From 36% to 22% tax rate is a huge boost to margins. That extra money is such a huge windfall for these large companies that opens the doors for numerous possibilities for growth. I expect a huge spike in earnings and this will likely result in more expansion, M&A, higher dividends, and large buy backs. All excellent for shareholders! Companies that are based overseas with low taxes (like MDT) or not tax impacted (like REITs) will not benefit.

There seems to be a large sector rotation away from defensive names (like staples and utilities) and more towards super cyclicals, think industrials and energy and materials and discretionary and technology. This has led to a lot of companies I consider Core to fall back to levels I am particularly interested in, especially considering the major tax cut. I am specifically eyeing the Staples and Utilities sectors, but will consider minor additions to other sectors.

Happy investing
-YD
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Bought $600 of D and $500 of XEL today.

Utilities seem to be undergoing a sector rotation and are getting cheaper. D is offering to buy Scana, which caused its share price to lower. I think an acquisition here will really help increase D's earnings growth profile further which will support the dividend growth. The initial cost will be a hit though.
-YD
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December was a decent month for dividends. I got $959 from a wide range of companies. TJX usually pays in December but for this quarter they paid in late November for some reason. I think for March 2018, my dividends from this quarter cycle will be over $1000 in monthly dividends.

Ticker      Total    Taxable         401k
JNJ $154.85 $149.48 $5.37
HD $111.47 $86.34 $25.13
NEE $93.77 $67.24 $26.53
D $83.11 $42.47 $40.64
KO $67.11 $67.11
MMM $63.95 $63.95
BDX $58.18 $58.18
O $53.99 $53.99
KHC $40.22 $40.22
V $38.56 $27.77 $10.79
SBUX $37.68 $27.69 $9.99
SO $33.83 $33.83
MCD $32.71 $32.71
WEC $31.55 $31.55
ROST $29.10 $29.10
CHD $28.45 $16.45 $12.00
INTEREST $0.30 $0.30
$958.83 $774.09 $184.74

For the coming January I am expecting somewhere in the high $1100 in dividends. And February around $500.


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November dividend received was $465. Below is the breakdown.
Note that TJX usually pays in December. For some reason they paid out at the end of November. The HRL's dividend are the vestiges from fractional shares after I sold off the position.

November is a light month for me. Not many companies I own pay in November.

Ticker      Total    Taxable         401k
T $141.57 $141.57
PG $70.17 $59.75 $10.42
O $53.79 $53.79
CLX $36.35 $36.35
APD $33.47 $33.47
GIS $31.63 $0.02 $31.61
TJX $25.49 $25.49
CL $24.93 $24.93
MA $17.47 $7.05 $10.42
ABT $15.99 $15.99
GD $13.44 $13.44
INTEREST $0.51 $0.14 $0.37
HRL $0.14 $0.14
$464.95 $358.34 $106.61


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