The recent markets have certainly been tumultuous. Enough that we don't hear of imminent crashes from the crowd. I am not one to hold cash and wait for doomsday to invest. Instead, I invest regularly in strong dividend growth stocks. I recently shared 5 learnings from my dividend investing journey, and one learning I have not shared is that I do not attempt at assessing the fair value of a company's stock price. I will dollar cost-average my holdings over time instead, which has resulted in having a portfolio beating the index so far.
As per my strategy of holding no more than 4.5% of my portfolio in one stock and maintaining a target ratio per sector, I have added another holding from the industrial sector.
I purchased Illinois Tools Works (NYSE:ITW). It completes my number of holdings for the industrial sector for now. Only two more sectors in need of an extra holding. I am considering Texas Instruments (NASDAQ:TXN) for the technology sector and Becton, Dickinson and Co. (NYSE:BDX) or CVS Health Corp. (NYSE:CVS) for the healthcare sector.
The strategy below can really help you out assess how many stocks you should hold, and it can help you understand when to take profits.
|Sectors||Target # of Stocks||# of Stocks in Portfolio|
Sector Diversification - March 2018
The recent market movements have created a gap in the healthcare and technology sector. Both of those sectors are covered by USD stocks in my accounts, and are both sectors where I could, and should, add another holding. I am looking at adding money, and do not intend to sell any holdings at this point to align my sectors to the targets. The new money would also adjust the overall target for all sectors.
My March 2018 dividend income is $1,586.08. The quarter is over, and I registered $4,309.86 for the quarter. All dividends are re-invested where possible. With the amount of dividend I am receiving, I am considering stopping the DRIP to choose which holdings to add the dividends. Some accounts have limits I can contribute annually, and it's not easy to dollar cost-average in those accounts when appropriate.
Disclosure: Please note that I may have a position in one or many of the holdings listed. For a complete list of my holdings, please see my Dividend Portfolio.
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 investment decisions at your own risk - see my full disclaimer for more details.