Erik Sorensen's  Instablog

Erik Sorensen
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I am twenty-something investor who has a great interest in Dividend Growth Investing. Currently I am in the process of rebalancing my portfolio to more of a DGI approach. I began investing (admittingly foolish investing) when I was 20 and have learned so much in a short span of five years. I... More
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The Mask of Sorro
  • What's A 25-Year Old To Do? (Introduction) 6 comments
    Jul 14, 2013 10:46 PM

    The introduction of this journey asks WHY?

    There are a few "firsts" in life that people typically don't forget; your first kiss, your first job, and your first beer (Michelob Golden Light). Well I'm going to add to this list, my first trade. In the Spring of 2009 I graduated from college with a finance degree. As you are probably thinking right now, not the most opportune time to hop on the finance bandwagon. Luckily, I was able to find a job at a national bank branch located in my hometown. Although my situation did not include some outrageous Wall St. salary, it did provide me with two invaluable advantages. One) Rent, food, cable and laundry was paid in full by my roommates….thanks Mom and Dad. And Two) I was able to open a brokerage account through my employer with access to 100 commission-free trades each year. Although the free trades are now a blessing, back then it was a curse. I had suddenly acquired the mindset of Charlie Sheen & Shia LaBeouf, wanting to place orders left and right, and believe me, my money never slept.

    My first trade executed March of 2010 coincidentally in an MLP, Atlas Pipeline Partners (NYSE:APL). The order was for 100 shares at around $13. One of the company's senior managers was actually on the board of my university and that is how I had first learned of the company. This was not an investment, it was a trade based off a recommendation from one of my marketing professors before I graduated the spring prior. I had done no due diligence and just wanted to use my free trades! The stock eventually rose to around $22 in late 2010 and I sold most of my position because I saw "green" in my portfolio. When tax time came around in early 2011 I immediately sold my remaining position after I received a Schedule C form from APL. Admittedly, I had no idea what the Schedule C meant; I just knew it made filing my taxes more difficult. Looking back now, if I had developed a strategy, done proper research and made an investment, not a trade, my original investment of $1,300 with distributions reinvested would now be worth over $4,000

    Seeking Seeking Alpha

    Through my first 4 years I have made trades totaling original investment amounts of nearly $15,000. Positions held during those years included Ford (NYSE:F), Alcoa (NYSE:AA), Bristol Meyers Squibb (NYSE:BMY), Yahoo (NASDAQ:YHOO), and some mindless penny stocks. To this day the only remaining position I hold is Intel (NASDAQ:INTC). While I never gained or lost more than $800 on these trades, not one position was held more than a year. Those first years I had been a careless trader-again nothing I was doing could be considered investing. I had no investment plans and found myself wandering across the vast financial universe; rocket propelled by Mr. Market himself. This realization brings me back to the title of this article.

    What this 25-Year Old is Doing

    The past year delving into DGI articles has opened my eyes to the benefits of investing for income growth and getting a head start while I'm still young. Heck, if I had known even 20% of what I know now about DGI and invested that $15,000 equally in three DGI stalwarts, Wal-Mart (NYSE:WMT), McDonald's (NYSE:MCD), and Coca-Cola (NYSE:KO) my original investment of $15,000 from March 2010 would now be worth over $24,000! I like the idea of investing into a core group of companies who have consistently raised dividends and implemented dividend policy into their everyday corporate culture.

    My hope is that this journey will not only provide me with supplemental retirement income in my later years, but also allow others to view my shortfalls and successes as a younger investor. I hope you will follow me on this journey and keep me accountable with periodic updates and constructive portfolio criticism. Part two of this three-part series will delve further into my portfolio strategies and investing business plan. In part three, I will reveal my current portfolio with quarter 1 updates and alignment with my business plan. Stay tuned for the next article!

    Disclosure: I am long INTC, WMT, MCD, KO.

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Comments (6)
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  • Eric Landis
    , contributor
    Comments (3433) | Send Message
    Thanks for sharing your story, mine is somewhat similar.


    I started investing in 2005 and went with the theory that I was going to cast a wide net with fast growing stocks and try to find a few huge winners. I had decent success with names like TIE, HANS, BIDU and BEXP but also lost a lot of money on others (BRLC, BBC, CHNG come to mind). Like you I rarely held a stock for as long as a year and didn't have much for a game plan.


    I found SA earlier this year and after reading a few recommended books and works of some of the DGI stalwarts here on SA I jumped headlong into dividend growth investing.


    You have nearly 10 years more compounding to take advantage of in your investing, but I'm thankful I discovered this site when I did as I believe I am now on the right path towards my retirement.


    Best of luck!
    16 Jul 2013, 11:19 PM Reply Like
  • Erik Sorensen
    , contributor
    Comments (70) | Send Message
    Author’s reply » Eric,


    Thank you for also posting yours! I have a feeling many younger investors start down the path we both took and unfortunately may never find Seeking Alpha (Dividends & Income section of course).


    Best of luck to you as well!
    21 Jul 2013, 01:18 AM Reply Like
  • Chowder
    , contributor
    Comments (15419) | Send Message
    Almost everyone starts down the same path as you. The saying goes, you can't succeed until you fail. Nobody, and I mean nobody enjoys success without some failures along the way. The key is to learn from them quickly and not repeat them.


    You're off to a good start when you understand building the core, the foundation of your portfolio, with companies like WMT, MCD and KO.


    Boring? Yeah! So what? ... Sometimes it takes boring to be successful. It's why those of us who have management experience often tell others to stop thinking so much. Keep it simple. ... Ha!
    8 Aug 2013, 04:07 PM Reply Like
  • jmsims2
    , contributor
    Comments (38) | Send Message
    Good luck Erik. I, like you, started young. Luckily, I somehow found value investing and became a huge Warren Buffett fan. That kept my trades to a minimum and had me thinking longer term from the beginning. It was a natural transition into DGI investing for me. Now, at 30, my wife and I have a healthy "escape fund" going and hope to have it develop into a nice little third income in the next 5 to 10 years. Future you is going to thank past you!
    8 Aug 2013, 06:34 PM Reply Like
  • JTgolf
    , contributor
    Comments (8) | Send Message


    I'm right there with you. A twenty something that made a few trades I would like to take back. I just wanted to get out there and get started. I jumped in. It didn't take me quite as long to find my "plan". I 've slowly been getting rid of anything that isn't part of that plan. I'm almost in the position I want to be going forward. And it includes core positions in dividend growing companies.


    I look forward to following your progress. Like you I've been reading the articles of the older investors focusing on that phase of life. I have been considering putting together some articles of my own capturing the growth of a younger investor. I'm glad you took the step to writing something out.


    Good luck to you.
    11 Aug 2013, 10:01 PM Reply Like
  • Colin Lea
    , contributor
    Comments (606) | Send Message
    Ended up here from your article's link. What Chowder said - Boring is good. Good luck with the investing Erik and I look forward to seeing future articles on your progress.


    Regards, Col
    25 Aug 2013, 11:51 PM Reply Like
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