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My Most Recent Portfolio Addition

Whenever I buy or sell shares I will update my blog with the details. I’m doing this primarily for two reasons. First, I want readers to be able to see the types of stocks I’m purchasing, and how I use a dividend growth strategy. Second, I’m hoping that readers will share their thoughts about my recent buys/sells and that this discussion makes me a better investor.

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I haven’t purchased anything in March so far, but back in February I purchased Intel at $20.50. This gives me an entry dividend yield of 4.39%. Intel has increased its dividend for 9 years in a row.

2012 Portfolio Notes

I have a fairly conservative investing approach which means I don’t buy stocks very often. I went through my Questrade account to see all the broker transactions for 2012 and I came up with the following:

  • January 27, 2012 – Bought Bank of Nova Scotia (BNS.TO) @ $52.21
  • February 15, 2012 – Bought Pepsi (PEP) @ $63.00
  • February 29, 2012 – Bought Pepsi (PEP) @ $62.90
  • February 29, 2012 – Bought AT&T (T) @ $30.57
  • April 13, 2012 – Bought SNC Lavalin (SNC.TO) @ $38.47
  • May 21, 2012 – Bought Sysco (SYY) @ $27.22

In 2012 I bought shares in broker account a total of six times which averages out to buying shares once every two months. My most recent purchase was coincidentally two months into 2013, so it looks like I’m keeping with the average.

My purchase of AT&T was for less than 10 shares and to add to my existing position. I wouldn’t consider this a major purchase as I was just trying to get rid of a little cash left over in my account from the Pepsi purchase.

During 2012 I also contributed to my Dividend Reinvestment Plans (DRIPs) on a monthly or quarterly basis. On average I contributed the same amount out money each month for the first 7 or 8 months of the year to:

  • Fortis (FTS.TO)
  • Enbridge (ENB.TO)
  • TransCanada (TRP.TO)
  • Bank of Nova Scotia (BNS.TO)
  • Telus (Non-Voting Shares: T-A.TO. These have since been converted to voting shares: T.TO)
  • Johnson & Johnson (JNJ)
  • Proctor & Gamble (PG)
  • Pepsi (PEP)

In October 2012 I moved to Australia for a one year working holiday. I stopped these contributions a few months before I left so that I could have some extra backup money while travelling for the year. When you contribute to the same company on a regular basis it is called dollar cost averaging. Because these DRIPs didn’t have any fees to purchase additional shares I was able to send a little bit of money to each company and build my position up over time, without spending a lot on purchase costs. (Please note that Pepsi’s DRIP has changed and they now charge fees.)

Going forward I won’t be contributing as much to my DRIPs, unless that specific company is below my target buy price. Over the past year or so I’ve learned a lot more about investing and I’m now more comfortable valuing a company and setting a target buy price. Rather than dollar cost average I have a list of companies I’m interested in buying and I wait for one of them to get below my target price and then I purchase the shares. Dollar cost averaging worked out very well for me, but I’ve moved away from this for now.

Some random thoughts on portfolio fees

Over time fees can significantly erode portfolio gains. This is why I like to try and keep fees to 1% or less. This includes buying and selling the stock. I have a Questrade account which charges $4.95 to buy or sell equities. This means that to keep my costs below 1% I try and buy shares with at least $1,000. A $1,000 purchase works out to 0.5% in fees at the time of purchase and when the time comes to sell the shares I assume that it will be around the same. If you are investing in ETFs, or mutual funds the 1% rule should still apply, but you should be able to find a management expense ratio (MER %) below 0.5% quite easily. Mutual funds in Canada have some of the highest MER%s in the world, so try and avoid the high fee ones.

Final Thoughts & New Pages

By now I feel like you should have a fairly good idea of my investing history for the past year or so. In an effort to continue this trend I’ve created three new pages to give readers full insight into my portfolio and investing decisions:

  1. Dividend Portfolio – this page has the stocks currently in my portfolio. You can also check out recent portfolio updates here.
  2. Dividend Income – this page tracks my monthly dividend income so you can see my progress towards financial freedom. A more detailed breakdown of the dividend income for each month will be shown here.
  3. Dividend Watch-List – this page tracks stocks that I want to own and my target buy price. In order for a stock’s target price to get added to the list a dividend stock analysis (DSA) is completed first so the reader has a full understanding of what I think of the company. As I complete more DSAs this list will grow. You can also see the most recent DSAs here.

Let me know what you think of the new pages, and if there are any specific companies you want reviewed with a DSA. My first DSA was of Johnson & Johnson (JNJ), which is considered a dividend favorite having paid out increasing dividends for 50 years!

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