My Retirement Portfolio's 2-Year Performance Update: My Strategy For The Next 2 Years

| About: Altria Group, (MO)


This is my actual Retirement Portfolio scaled down to a $1M portfolio, initially presented on 7/24/2014 here on Seeking Alpha to demonstrate its performance and how I actively manage it.

My projected dividend income has decreased from $58,803 to $44,212 because I sold all of my EEQ and used the proceeds to buy MO. I am now 100% MO.

My challenge is to resist the temptation to trade shares of MO. I intend to Hold MO and look forward to the annual dividend increase past history implies.

I am considering selling about 15% of my MO position and buying AGNC or EEQ at some point in the future to increase the dividend income. More deliberation is needed.


This article is an update of my public Retirement Portfolio. It is my actual Retirement Portfolio. It was initially presented on 7/24/2014. I scaled the portfolio down to $1M**. The initial portfolio consisted of 3 stocks. My most recent update can be found here.

My initial retirement portfolio published on 7/24/2014 is listed below,

I used the closing prices on 7/22/2014:

American Capital Agency (NASDAQ:AGNC) = 40.3% = $403,000 = 17,230 shares, price = $23.39 the current annual dividend = $2.60 = Income = $44,798

Altria Group (NYSE:MO) = 38.3% = $383,000 = 9,134 shares, price = $41.93 the current annual dividend = $1.92 = Income = $17,537

Prospect Capital (NASDAQ:PSEC) = 21.4% = $214,000 = 19,705 shares, price = $10.86 the current annual dividend = $1.325 = Income = $26,109

Total value of the portfolio = $1M Total Income = $88,444 = a yield of 8.8%

What has happened since my last report of my Retirement Portfolio:

1) I sold all of my EEQ (NYSE:EEQ) shares and bought them back several times for cheaper prices {I made several trades and got lucky*, increasing my EEQ share count after each trade}. My last EEQ trade was on 5/31/2016, I sold all my shares for $21.90/share and watched the price rise, so I decided to use all the proceeds to buy MO.

2) I used all the proceeds from the EEQ sale on 5/31/2016 {sold at $21.90/share} to buy MO on 6/2/2016 for $64.13/share.

3) MO paid its quarterly dividend on 7/11/2016 and I reinvested it back into MO.

* = The reason I recognize I was lucky when selling a position and buying back more shares at cheaper prices is because I have not had the same success in my non retirement accounts.

My Portfolio as of 4/22/2016, with a yield of 5%

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My current Portfolio as of 7/22/2016, with a yield of 3.3%

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Some Of My Thoughts Regarding Investing In Altria (NYSE:MO)

I have 100% of my Retirement portfolio invested in MO as of 6/2/2016. I am not recommending anyone else follow my investment decision to be in MO 100%. I do believe that MO is an excellent investment. Each investor should decide for themselves what % of their portfolio should be in MO. I also understand that some investors do not want to own MO based on their personal feelings, and that is fine with me, each to their own. We must all live with our decisions.

I have asked myself what is my strategy for my MO investment! I have decided that I will HOLD my MO shares in my Retirement accounts at this point in time. I was tempted to sell about 1/2 of my MO position when it hit $70 and then buy it back at a cheaper price, which would allow me to buy more shares and therefore increase my share count.

HOWEVER, I know I would go crazy waiting for the drop in price and if MO continued to go higher into the mid 70's, I would be very upset. I might buy back at a higher price and end up with less shares. If MO did drop in price, how long would I have to wait to complete the trade? The time spent waiting for the drop would drive me nuts and I would be a TRADER, not an investor! I have done some of these trades very successfully with EEQ and a portion of my MO shares in the past, however the stakes are now higher due to the fact I have more shares and would be trading with larger amounts. I have lost money trading in my taxable accounts and I do not want to make the same mistake in my Retirement accounts.

I am going to take a long range view of my MO position in my Retirement accounts. I believe that MO will at least double in the next 5 years. I see MO has returned about 231% the LAST 5 years according to the following link:


Currently our Roth IRAs comprise about 97% of our Retirement Portfolio and my SEP IRA comprises about 3% of the Retirement Portfolio. My goal is to have 100% of the Retirement Portfolio in Roth IRAs. I plan on doing another Roth conversion in 2017 and 2018.

I am determined to reach my goal. I will continue to cut my expenses to help pay the taxes I owe for my 2016 Roth conversion. I will also take the MO dividends as distributions when needed and use them to pay the taxes and meet expenses.

I closed all of my non retirement taxable brokerage accounts on 7/8/2016. I used some of the cash to pay down my taxes and will use the rest for a nice trip and other expenses.


1) Since 7/24/2014* when I initially made my dividend Retirement Portfolio public, my projected dividend income has decreased from $88,444 to its current projected dividend income of $44,212, a decrease of 50%. The reason for my substantial decrease in projected dividend income is because I sold all of my AGNC and PSEC positions. I now have a 100% allocation in MO. I have made many changes to this portfolio, however, the one constant is my MO position and its increased allocation.

2) MO is my Retirement Portoflio and I am willing to take the risk. It is a very stable and reliable stock, in my opinion.

3) The value of my Retirement Portfolio was $1,000,000 (scaled down) on 7/24/2014*, the date I made it public here at Seeking Alpha. The value at the close of trading on 7/22/2016 was $1,347,108. Additionally, I took several penalty-free distributions from my Roth IRA this year (2016 distributions) for a total amount of $112,975 (scaled down). Therefore, my initial portfolio value of $1M (scaled down) has increased by $347,108 + $112,975 for a total of $460,083 or 46% over a 2 year time frame {since I made my Retirement Portfolio public}. I am very happy, satisfied and proud of my personal management of our Retirement Portfolio.

4) The S&P 500 closed at 1,984 on 7/22/2014. It closed at 2,175 on 7/22/2016. My Retirement Portfolio has outperformed the S&P 500 substantially since I made my portfolio public 2 years ago.

5) My main focus is on the DIVIDEND INCOME meeting our living expenses going forward.

6) Writing for Seeking Alpha has helped me immensely regarding my management of this portfolio. It keeps me accountable and honest.

7) If the price of MO increases 5-10% as the prices of EEQ or AGNC decrease 5-10%, I might sell 15% of MO and use the proceeds to buy EEQ or AGNC depending on the yields. This would of course increase the projected dividend income. I will continue to monitor and analyze what is the best strategy to meet our goals and needs.

* = 7/24/2014 is the date my Retirement Portfolio was published here at Seeking Alpha; 7/22/2014 is the date used for the closing prices of my Retirement Portfolio.

Disclosure: I am/we are long MO.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: This is my portfolio. I am not recommending anyone buy the stocks I own. Please do your own due diligence to decide which investments meet your individual goals and income needs. I take 100% responsibility for my decisions to buy or sell stocks and for managing my portfolio. I advocate all investors do the same with their investments and portfolio. " Each investor's BUY, SELL, or HOLD decision is based on one's risk tolerance, time horizon, and dividend income goals. My personal holdings may not fit each investor's current investing strategy."