Smarty_Pants'  Instablog

For some time now I have been using the Portfolio feature of SeekingAlpha to track the value of my holdings. If you're not familiar with the Portfolio capability, check it out. It is very useful. You can set up multiple portfolios and track each one individually or all of them together. That turns out to be pretty handy.

I have set up a portfolio for my Dividend Growth stocks, one for my speculative stocks, and another one for my list of potential buy candidates which I call my 'Watch List'.

The only issue I have run into is how to represent the cash or money market funds which I have yet to invest in an individual stock. Those funds are sitting there in my account, but the Portfolio feature does not have a "cash" bucket, nor will it recognize mutual fund / money market symbols.

This weekend it finally dawned on me that I could substitute an ETF symbol for my cash and get a reasonably close representation.

Duh!!

After a little research I settled on the iShares Capital 1-3 Month T-Bill ETF (BIL). This ETF has maintained a stable price (within 0.1%) since the start of 2009. The price might vary by a few pennies (out of a $45.80-ish price) over time, but that's close enough for my needs.

One caution is that you can only enter an integer number of shares in any stock. This means that the value of BIL which you can represent in your portfolio might be off by as much as $20 or so at any given time. While the perfectionist in me finds that somewhat annoying, the pragmatist can live with it.

So now my portfolio(s) carry a near-cash balance in BIL and my total portfolio value is pretty darn close.

I hope that helps some of you folks out there on SeekingAlpha. It sure helped me.

Back in January 2011 I undertook developing an experimental Dividend Growth (DG) portfolio after several months of learning about that approach in the Dividend & Income section of Seeking Alpha. In the 18 months since that time, I have been adding and trimming various stock holdings from my DG portfolio as I've continued to learn.

Here's how my 15 stock DG portfolio stands now:

Total = 100.0%

My original plan was to establish 15 or 16 equally weighted positions of around 6% each. Since then I have decided to expand the number of holdings to around 30 over time, with each position being roughly 3.3% of the total. I am currently in the process of trimming and reallocating my holdings as conditions warrant. I am still looking for solid, undervalued DG stocks to add and will determine which shares to sell once a good buy candidate is found.

Since beginning my DG portfolio I have experienced capital gains on closed positions of about 12% of the initial portfolio value for positions I have already trimmed.

The remaining open positions have unrealized capital gains of about 9.9% of their cost (some of which are reinvested capital gains from above).

And the dividends I am receiving are 6.02% of the cost of the shares I still hold. That number will certainly grow as this year's crop of dividend increases comes in.

I have to say that for someone who has spent nearly 20 years chasing capital gains this DG investing stuff is noticeably easier. The profits I've generated using this approach have seemed too large and too easy for the amount of effort I've put in, especially in a lackluster market like we've experienced in the last few years.

I guess it boils down to a simple formula. Find great companies with a history of performance and growing dividends, then buy them at a good price and let them do the heavy lifting.

It doesn't get any better than that in my book. You can be sure I'll be adding more money to this DG portfolio in the future.

Many thanks to the numerous authors and contributors of the Dividend & Income DG articles on Seeking Alpha. They have saved me countless hours of work and helped me to find an investing methodology in which I can have great confidence.

I have collected three dividend payments in the past 7 days!

NUE, HAS, and ABT each sent me my share of their quarterly profits.

How great is that?

Disclosure: I am long ABT, HAS, NUE.