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Dividend Harvesting: Building The Portfolio Brick By Brick On $100 A Week, Week 5 Update, CEFs Galore

Apr. 07, 2021 9:15 AM ETPTY, T, THQ, UTG75 Comments
Steven Fiorillo profile picture
Steven Fiorillo
28.12K Followers

Summary

  • In week 5, I added 3 Closed-End Funds PTY, THQ and UTG while adding another share of AT&T.
  • After my week 5 investments, my annual dividend income grew to $30.51 prior to compounding which is an overall yield of 6.27% from my 12 investments (excluding cash).
  • I now have 6 companies that are paying dividends in April and my dividend/distribution reinvesting journey is about to begin.
  • I have organically created a portfolio with monthly dividend income and income being paid in 40 weeks out of the year.

Piggy Bank, Stack of Coins and New Year 2021
Photo by Cn0ra/iStock via Getty Images

I want to say thank you to everyone who has been reading this article series and to everyone who has been commenting. I have many of you to thank for piquing my curiosity about Closed-End

This article was written by

Steven Fiorillo profile picture
28.12K Followers
I am focused on growth and dividend income. My personal strategy revolves around setting myself up for an easy retirement by creating a portfolio which focuses on compounding dividend income and growth. Dividends are an intricate part of my strategy as I have structured my portfolio to have monthly dividend income which grows through dividend reinvestment and yearly increases. Feel free to reach out to me on Seeking Alpha or https://dividendincomestreams.substack.com/

Analyst’s Disclosure: I am/we are long PTY, THQ, UTG, STWD, MO, AGNC, STAG, T, ENB, KO, SO, OHI. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Disclaimer: I am not an investment advisor or professional. This article is my own personal opinion and is not meant to be a recommendation of the purchase or sale of stock. Investors should conduct their own research before investing to see if the companies discussed in this article fits into their portfolio parameters.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (75)

mikelmore2000 profile picture
I've got some catching up to do. I caught the 1st article and somehow missed the others until today. If you aren't worried about premiums and discounts, check out STK
Brian Soule profile picture
Love the series, Steven. I just “binged” all five. I recently started writing what I expect will be a very similar series of articles though I don’t believe we have any of the same securities...yet.

Check out DNP. Sounds very similar to UTG, but it is my most recent addition. Might be overkill since you already have a utility CEF, but you might love it also. Never know.

Now following you. I love some of the stuff you picked up. Cheers!
d
You should check into: Yield Hunting: Alt Inc Opps. They are the masters of CEF's and offer daily info on a wealth of information. I have been a member for about 7 months; and have NO financial benefit from mentioning them.
d
There is also a high probability that the PIMCO funds, i.e., PDI, PCI, PTY will cut their distribution in the near future. Again, the price will drop a great deal. Do your research!
d
OPP is NOT a good CEF in which to invest right now. The Discount is about 1%. There is a high probability that OPP will become an OPEN ended fund, sometime in May +. If this happens, the price will drop a great deal.
F
I hope you are looking at the details of these CEFs. PTY is trading at a 31% premium to NAV as of 4/7. It also has a pretty high leverage ratio of 39%. This should lead to high price volatility.
THQ sells at a small discount and has less leverage at 19%. The problem there is that most of the distribution is return of your own capital. I hope you know what you are doing. Good luck.
O
@RFoscolo PTY has averaged a premium over 27% for the last 52 weeks. It's built in due to the superior performance. SPY has done better than THQ. www.portfoliovisualizer.com/...
Steven Fiorillo profile picture
@RFoscolo Thanks for reading and commenting. When I read up on CEF's I read the details of how they work. Based on the fund perspectives I am good with the investments.
m
@Steven Fiorillo Thanks Steven for helping the little guys that can only buy one share of stock. I know that I do appreciate it. The advance traders and who can purchase 1000 or more shares at a time should be trading BRK.A stocks. Keep up the good work we do appreciate it. The haters going to hate, hate, hate. Shake it off.
O
Good start, but looks like a bunch of future paperwork. Are you DRIPing all of these? Also, are you doing it in a Roth for tax free growth and eventual tax free retirement income?
L
@Opt4living I think he already has other accounts, this is just to showcase how creating this type of passive cash flow is relatively easy. And yes I believe he is DRIPPING
Steven Fiorillo profile picture
@Opt4living Thanks for reading and commenting. Yes, all of these are DRIPing. This is in a regular taxable account so I will not be adding any MLPs or LP's that issue a schedule K-1. This is a separate account I set up specifically for this idea and article series. I don't think it will be too much paperwork. As long as its just regulars dividends and 1099 its just a piece of paper I hand to my accountant.
O
@Steven Fiorillo I turn 61 this year. I sure wish I had a Roth to put these in 25 years ago, with tax free compounding and tax free withdrawals. You inspired me to pick up some PTY, PCI, and PKO today. They all go ex dividend tomorrow. I heard they reinvest at a 5% discount, but I need to test the waters to see for sure. Can I do MLPs or LPs in a Roth or does that still mess things up?
k
kpalms
08 Apr. 2021
Look at OPP and RIV
Steven Fiorillo profile picture
@kpalms Thanks for reading and commenting. I will add them to my watch list
B
Thank you for your transparency. I wish I had known about this strategy 27 years ago when I graduated from college. I converted over half of my IRA to this strategy about 3 years ago in an effort to create my own “pension fund”. It is working!! It is exciting to see what dividend investing and the power of compounding can do for your income stream and portfolio.

Have a Blessed Day!!
Robbie
Steven Fiorillo profile picture
@Big Hutch Thanks for reading and commenting. Good luck with your investing, What are some of your favorite dividend stocks?
LordNelsonPT profile picture
Where can I make that chart with the green bars, to calculate the estimated annual income from dividends? Thank you so much! :)
Steven Fiorillo profile picture
@LordNelsonPT Thanks for reading and commenting. Its a function in TD. Many brokerages have a similar function
G
Bravo! Love the format, and the frequent feedback. I follow a few of the people that you mention, and I also include Dividend Sensei (and his partners). He makes a case for individual stocks, primarily to avoid the expenses that come with funds. His posts can be long-ish, but they are chock-full of information. I think he repeats it, to help us remember;-) Colorado Wealth Management does a similar thing with his partners for BDC/mREITs/Preferreds. There is so much to learn, but keep up your great work! I don't want to leave out PendragonY, or Trapping Value (and F&G Trader, Jeff Miller), the late, great Regarded Solutions, and others. Try to absorb one at a time, and gather additional insights...GLTA!
Steven Fiorillo profile picture
@Gyponolan Thanks for reading and commenting. @Dividend Sensei puts out great research.
B
By far the best series on Seeking Alpha in my opinion, no slander or just going for views or comments just the educational value that the articles and comments bring are just refreshing.
Steven Fiorillo profile picture
@BumonaXbox Thanks for reading and commenting. I appreciate it, I have bene writing quite a few articles lately and honestly I am just doing it because I enjoy it. I try to be down the middle and form my viewpoint based off of the facts
dr futures profile picture
I've funded a cash account with $5,200 ... and I've been buying each of your selections. I haven't disagreed with any of your choices ... yet ... lol.
Steven Fiorillo profile picture
@dr futures Thanks for reading and commenting. That's great, hopefully you like the future picks as well!!
dr futures profile picture
@Steven Fiorillo you may want to consider RFI instead of RQI. Both Cohen & Steers funds ... very similar holdings ... RQI uses a moderate amount of leverage (~24%) vs RFI uses little leverage (~1.5%) ... Expenses: RQI: 2.22% vs RFI: 0.88% --- RFI has also been around a lot longer ... RFI inception: 9/27/93 vs RQI: 2/28/02. I like UTF ... a lot.
Hi Steven! The platforms I'm using for trading (eToro and Trading212) do not have the CEFs or some of the ETFs you are proposing. What stocks should I buy as a replacement? Other than the T.
EuroInvest profile picture
@SYAOnline just a suggestion maybe WPC 6% yield, BTI 7.7% yield, MO 6.7% yield. Good luck
Steven Fiorillo profile picture
@SYAOnline I think it depends on your goals. I like everything I have purchased and would look at MO, OHI, STWD, ENB to start
Monthly Income Investor profile picture
Take a look at HTD, GDV, ETO, CSQ, CHW, and BSTZ. I think they will be interesting for you to look at, based on what you investing in..I am doing a similar thing as well in my blog. Man I love seeing those monthly dividends roll in!
Steven Fiorillo profile picture
@Monthly Income Investor Thanks for reading and commenting. I will look into these and throw some on my watch list. Thanks
J
Good article. I especially like your weekly spreadsheet, and I've even started making one for myself using your format! One minor point- I believe the T dividend will be paid on the 3rd so it would go in the May 2nd to 8th column.
Steven Fiorillo profile picture
@JMatthewh Thanks for reading and commenting. Your correct it looks like 5/3. I will update
d
This has become one of my favorite stories to follow on SA. Rome wasn't built in a day. It was built brick by brick. Here's to high yields & capital gains! 🍻
Steven Fiorillo profile picture
@davidcruse87 Thanks for reading and commenting. I am glad your enjoying the series
poochpatch profile picture
Thank you brother. You've made my day. Imo, great additions. Loving it. Bless you and wishing you all the best. 👏👏👏
Steven Fiorillo profile picture
@poochpatch Thanks for reading and commenting. I am glad your enjoying the series
a
Whf
b
Great start. Really do not think you can go wrong with either UTG or UTF. In the last year I decided to hedge my bets and go with several mutual funds for overall growth. I picked 4 from the American Funds family. Looked at the returns of each over 1, 5 and 10 years and made my choices. Also looked at the dollars under management in each fund - every one was substantially above and beyond several equities I had held for years - O, WEC, NEE, MDU, WPC. I have seen very little comment on SA about mutual funds, wonder why.
Steven Fiorillo profile picture
@bayfieldcounty1972 Thanks for reading and commenting. O, NEE and WPC are on my watch list
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