My ongoing coverage of our newest portfolio, BTDP, will now be a separate portfolio from our ETF challenge. Since this portfolio is being actively managed with buy, sell, and add pricing, it requires an update of its own, and I will do a separate one with our ETFOP (ETF Only Portfolio) over the weekend.
Unfortunately this update had to endure a rather volatile week which ended with a very red day Thursday. That being said, keep in mind how this portfolio will work:
- I will add shares and sell shares when I feel I should.
- I will add new positions with cash reserves, or even put additional funds into the portfolio to buy positions.
- I have a simple system of target prices that should be monitored when deciding to add shares to existing positions.
- There are several targets to sell certain percentages of shares when those target prices are met.
- I will reinvest sold shares right back into either existing holdings or open new positions.
- All dividends (stocks going ex-dividend in the following month) will be added as a separate line item, but added to my cash reserves.
In comparison to the ETFOP, which is completely passive and will not be tinkered with unless there is an updated holding list from the ETF manager, the BTDP will encapsulate a dividend growth strategy with a goal of continually increasing income, and a secondary goal of share price appreciation.
The July BTDP Update
The newly updated and re-balanced BTDP consists of the following stocks: AT&T (NYSE:T), Exxon Mobil (NYSE:XOM), Johnson & Johnson (NYSE:JNJ), Coca-Cola (NYSE:KO), Procter & Gamble (NYSE:PG), Altria (NYSE:MO), McDonald's (NYSE:MCD), Chevron (NYSE:CVX), Apple (NASDAQ:AAPL) General Electric (NYSE:GE), Ford (NYSE:F), Microsoft (NASDAQ:MSFT), Wal-Mart (NYSE:WMT) and Pfizer (NYSE:PFE), Annaly Capital (NYSE:NLY), American Capital (NASDAQ:AGNC), and BGC Partners (NASDAQ:BGCP).
This is the "ultimate format" which I will use (and have used) to track performance, my income, my target prices for both buying and trimming, and it absolutely takes the guessing game out of timing the market. The only things you need is discipline and focus.
Income is MY main focus.
I might never get the lowest price on any stock, but I will rarely if ever, pay the highest price. No technical analysis with this sort of portfolio because these dividend winners move in a channel and over the long term, they have always made higher highs and higher lows.
At the same time I am getting paid to actively do my "job" of portfolio management.
Here is an up to the minute chart for the Month of July:
|Buy The Dips Porfolio||52 week low||52 week high||Target Price||Symbol||Shares||OrigYield||Dividend||Annual Income||Cost Basis||Total Cost||Total Value||31-Jul||Target Price||% To Sell||Target Price||% To Sell||Aug Ex-D|
|AT&T||$ 31.74||$ 39.01||$ 35.37||T||200||5.60%||$ 1.84||$ 368.00||$ 31.95||$ 6,390.00||$ 7,118.00||$ 35.59||$ 47.00||25%||$ 64.00||50%|
|EXXON||$ 84.79||$ 103.69||$ 93.41||XOM||50||2.80%||$ 2.76||$ 138.00||$ 90.05||$ 4,503.00||$ 4,947.00||$ 98.94||$ 135.00||25%||$ 180.00||50%|
|Johnson & Johnson||$ 81.71||$ 106.45||$ 93.44||JNJ||100||3.10%||$ 2.80||$ 280.00||$ 86.78||$ 8,678.00||$ 10,011.00||$ 100.11||$ 129.00||25%||$ 174.00||50%||$ 70.00|
|COCA COLA CO||$ 36.83||$ 43.43||$ 40.13||KO||200||3.00%||$ 1.22||$ 244.00||$ 37.21||$ 7,442.00||$ 7,860.00||$ 39.30||$ 56.00||25%||$ 75.00||50%|
|Proctor & Gamble||$ 73.61||$ 85.82||$ 79.72||PG||100||3.10%||$ 2.57||$ 257.00||$ 75.71||$ 7,571.00||$ 7,732.00||$ 77.32||$ 108.00||25%||$ 150.00||50%|
|General Electric||$ 21.11||$ 28.09||$ 24.61||GE||300||3.60%||$ 0.88||$ 264.00||$ 24.35||$ 7,305.00||$ 7,548.00||$ 25.16||$ 36.00||25%||$ 49.00||50%|
|Mc Donalds Corp.||$ 92.22||$ 103.71||$ 97.91||MCD||100||3.50%||$ 3.24||$ 324.00||$ 93.02||$ 9,302.00||$ 9,458.00||$ 94.58||$ 140.00||25%||$ 186.00||50%||$ 81.00|
|Chevron Corp||$ 109.27||$ 131.09||$ 120.55||CVX||50||3.60%||$ 4.28||$ 214.00||$ 111.14||$ 5,507.00||$ 6,472.00||$ 129.44||$ 166.00||25%||$ 222.00||50%|
|Apple Computer||$ 55.01||$ 94.42||$ 75.52||AAPL||75||2.25%||$ 1.88||$ 141.00||$ 75.21||$ 5,641.00||$ 7,170.00||$ 95.60||$ 112.00||25%||$ 151.00||50%||$ 31.00|
|ALTRIA||$ 33.12||$ 38.58||$ 35.85||MO||100||5.20%||$ 1.92||$ 192.00||$ 37.71||$ 3,771.00||$ 4,059.00||$ 40.59||$ 56.00||25%||$ 75.00||50%|
|Ford Motor Co.||$ 12.65||$ 18.02||$ 15.34||F||400||3.20%||$ 0.50||$ 200.00||$ 15.15||$ 6,060.00||$ 6,808.00||$ 17.02||$ 23.00||25%||$ 30.00||50%||$ 50.00|
|Microsoft Corp.||$ 28.51||$ 43.55||$ 35.08||MSFT||200||2.80%||$ 1.12||$ 224.00||$ 40.16||$ 8,032.00||$ 8,632.00||$ 43.16||$ 60.00||25%||$ 80.00||50%||$ 56.00|
|WALMART||$ 71.51||$ 81.37||$ 76.44||WMT||100||2.50%||$ 1.92||$ 192.00||$ 76.11||$ 7,611.00||$ 7,360.00||$ 73.60||$ 114.00||25%||$ 152.00||50%|
|Pfizer Inc.||$ 27.12||$ 32.96||$ 30.04||PFE||200||3.20%||$ 1.04||$ 208.00||$ 32.18||$ 6,436.00||$ 5,740.00||$ 28.70||$ 48.00||25%||$ 64.00||50%||$ 52.00|
|Annaly Capital||$ 9.66||$ 12.61||$ 10.16||NLY||500||10.70%||$ 1.20||$ 600.00||$ 11.19||$ 5,595.00||$ 5,550.00||$ 11.10||$ 18.00||25%||$ 23.00||50%|
|American Agency||$ 18.84||$ 24.58||$ 21.84||AGNC||300||11.30%||$ 2.60||$ 780.00||$ 22.99||$ 6,900.00||$ 6,936.00||$ 23.12||$ 34.00||25%||$ 46.00||50%|
|BGC Partners||$ 5.11||$ 7.72||$ 6.42||BGCP||500||6.30%||$ 0.48||$ 240.00||$ 7.49||$ 3,750.00||$ 3,915.00||$ 7.83||$ 11.00||25%||$ 15.00||50%|
|Div.&Cash||x||x||x||x||x||x||x||x||x||$ 2,623.00||$ 340.00|
|Totals||x||x||x||x||x||4.46%||x||$ 4,866.00||x||$ 110,494.00||$119,939.00||x||x||x||x||x|
The portfolio dipped very slightly from last month as the last few days have been somewhat of a rough patch. How long it will last, if it does is anyone's guess. That being said, we added 3 dividend opportunity stocks; NLY, AGNC, and BGCP to add more income for myself, and these stocks require closer monitoring, but the rewards are worth it for the active manager.
Six stocks are going (or have gone) ex-dividend since our last update: JNJ, MCD, AAPL, F, MSFT, and PFE. I added the $340 to my cash reserves which stands at $2,623 now, and our yield on cost increased to 4.46% annually, with an annual income from the dividends of $4,866 which is more than 20% higher than when we began this portfolio about 2-3 months ago (yep, it's a baby).
The amount invested has increased only slightly since we trimmed some positions to add our 3 dividend opportunity stocks, and as you can see, even after a brutal final week, the portfolio value is still up nearly 9% anyway.
The Dips Have Opened Up Some Bargain Pricing
For those investors seeking to add to core positions or begin positions, based upon my own approach, the following stocks are either at, or ear their target share prices to add or buy shares.
- AT&T: target price: $35.37, now at $35.59. With over a 5% yield, this sort of stock should be considered right now as a buy, based on the mid-point between its 52 week high and 52 week low.
- Exxon Mobil; should be monitored after a 4% drop just today, but it still is another 4% away from its target add price. The earnings and all aspects of the conference call were solid.
- Johnson & Johnson has also been beaten up after a stellar earnings report but is about 5% away from its target add price. I believe both XOM and JNJ should be considered right now.
- Coca Cola is below the target add price and should be considered "on sale" right now.
- Procter & Gamble is "on sale" right now as well.
- General Electric is close enough and should be considered as "on sale" and worthy of consideration.
- McDonald's is below the target add price but I would wait for the China issue to die down. Keep an eye on it though, it IS a dividend aristocrat.
- Wal-Mart is below its target add price and as the yield has ticked up, so can income if you decide to add here.
- Pfizer is below the target add price and a yield over 3%. Consider that one for sure.
Of course there are no strict rules and YOU are the boss of your portfolio, so pick and choose the stocks you happen to like that have sold off.
My personal favorites of these stocks are XOM, JNJ, and GE if I wanted to add shares to this portfolio.
XOM and JNJ blew past earnings with strong forward guidance, and GE is spinning off the finance arm finally, and that will add plenty of cash to its register.
Nothing is risk free, and my strategy is to help individual investors to keep decision making simple, without charts and graphs of technical gibberish that most regular folks get confused with anyhow.
Stay tuned for how our ETFOP stacks up versus this portfolio!
Disclaimer: The opinions of this author are not recommendations to either buy or sell any security. Please remember to do your own research prior to making any investment decisions.
Disclosure: The author is long AAPL, BGCP, CVX, F, GE, JNJ, KO, MCD, MO, MSFT, NLY, T, XOM. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.