Building Income: My Retirement Accounts Update - January 2015

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Includes: AGNC, KMI, MO, MTGE, PM, PSEC
by: Dividends#1

Summary

I sold 1/3 of my KMI position near its all-time high and used the proceeds to buy PM, which is currently yielding 4.9%.

I sold another 1/3 of my KMI position near its all-time high and used the proceeds to buy MTGE, which is currently yielding 13.6%.

My dividend retirement portfolio is currently yielding 7.8%.

I funded our 2015 Roth IRAs (my wife's and mine) $6,500 each for a total of $13,000 on the first trading day of 2015.

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

Introduction:

This article is an update of my public retirement portfolio. It is my actual retirement portfolio. It was initially presented on 7/22/2014. I scaled the portfolio to $1M. The initial portfolio consisted of 3 stocks.

They are listed below:

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%

There have been many changes in my retirement account since 7/22/2014. I sold PSEC in two main lots. The first PSEC lot was sold on 8/11/14 for $10.69. The last PSEC lot was sold on 8/26/14, I sold it for $10.60. I made about a 10% profit on the PSEC shares. Since I sold PSEC it has dropped almost 20%. I sold PSEC because Scott Kennedy sold his shares of PSEC and I trust his judgment. I then bought shares of KMR using the proceeds from PSEC. KMR was converted to 2.48 shares of Kinder Morgan Inc. (NYSE:KMI). All of these transactions were documented in my previous articles that updated this portfolio.

Recently, I sold 2/3 or my (KMI) position to buy Philip Morris (NYSE:PM) and American Capital Mortgage (NASDAQ:MTGE). I documented this in an Instablog. My favorite Seeking Alpha author Scott Kennedy is long MTGE. In my opinion his analysis is exceptional. I will be following his future analysis very closely.

My current portfolio as of 1/9/2015, which yields 7.8%.

I would appreciate any comments regarding my portfolio. I will do my best to answer any questions regarding my buy or sell decisions. I actively manage my portfolio and have been successful doing so. I hope this helps other investors to see an actual portfolio.

Final Thoughts:

If my portfolio is not diversified enough for most investors, it is my hope that readers can use the general principals of my investing strategy to expand on. Each investor must be comfortable with their investments. Know your risk tolerance and decide how many stocks you need to sleep at night. Some need 15-20 stocks, some need 30-40 stocks and some need 200 or more. I know many believe in owning bonds, commodities, annuities and other investments. Personally I am content with dividend growth stocks and a couple of high yielding dividend stocks to meet my retirement income needs and goals.

Lastly, as a result of writing this update I have come to realize that my current portfolio is much stronger than my initial portfolio. I initially owned AGNC, MO and PSEC. I now still own MO and AGNC, however, the % allocation has increased for MO from 38.3% to its current 41.4% and AGNC's % allocation has dropped from 40.3% to its current 35.43%. More importantly I have traded PSEC for PM, MTGE and a little FSC. I hope this helps my readers. It has definitely helped me to make my portfolio public here on Seeking Alpha.

Disclosure: The author is long MO, AGNC, MTGE, PM, KMI, FSC.

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.

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."