There comes a time when a decision must be done on adding or removing a stock from your portfolio. This week I opted to sell Potash Corporation of Saskatchewan (NYSE:POT), [TSE:POT]. The second dividend drop was a point of no return for me. The company will probably recover over time but it was not meeting my dividend investing rules and it was time to sell this stock. The lack of consistency in the business sector and the potash business, supply and pricing were the key decision points.
Even the largest producer of potash was not immune to make the necessary adjustments just like many oil producers have done over the past year when oil prices dropped. Buy and hold is an intention but it doesn't mean buy and forget as you never know what the world economies will have in store for you.
My July dividend income reached $921.21. The root of my stock selection strategy relies on consistent dividend growth. I hold many of the Canadian blue chip stocks and most of my US holdings are also blue chip stocks as well as dividend aristocrats.
With the funds from my disposition of Potash Corp., I have simply purchased TELUS (NYSE:TU), [TSE:T] to bring back the sector to my target. My next target is the financial sector, followed by the energy sector. I have been waiting on the energy sector to assess all the ramifications of the oil prices.
Another choice I made this week in relation to selling Potash Corp. is adjusting my sector ratio for basic materials. I have come to realize that sector is not one I am fond of. It's a sector where I find it difficult to find many holdings that are matching my investing criteria and it's more important than focusing on a sector allocation for risk management.
Readers: What's your approach to sector allocation?
Disclaimer: Please note that this blog post represents my opinion and not an advice/recommendation. I am not a financial adviser, I am not qualified to give financial advice. Before you buy any stocks/funds consult with a qualified financial planner. Make your decision at your own risk - see my full disclaimer for more details.