First steps of my portfolio

[elmagoayulin]

Hello,

First of all I would like to comment about some general "rules" I use to build the portfolio:

- I am not expert in valuation of companies. I usually read a lot of articles mainly in SA and some blogs to decide what is interesting and what not and after this I use finviz screener to track easily all the companies I have decided to watch. 

- The most important parameters for me to take my decissions are P/E, forward P/E, PEG, EPS this year, next year, next 5 years and past 5 years, payout ratio. I don´t have strict rules about this, just a mix of evrything I consider good is enough for me.

- I am adding to the portfolio (or trying at least 2000$) per month, also reinvesting the dividends of my Spanish portfolio (roughly 3000 euros year). 

- I am buying 1000$ each time, so I will make around 25 purchases per year.

- I consider 11 sectors for a good diversification: healthcare, energy, basic materials, technology, utilities, financials, consumer discretionary, consumer staples, telecom, REIT and industrials.

- I would like to have 30-40 holdings.

Please comment if any comments about this general strategy and of course feel free to criticize whatever you may consider!

I will continue with my portfolio in next post

[ChadR]

That's great that you are investing $2,000 per month.

[crimsonghost747]

You'll definitely get the snowball rolling with an additional $2000 per month + the reinvested dividends.

Few things to think about:
-40 companies is a lot to follow. Assuming that you read all the quarterly reports etc, that would be 160 reports to go through per year... or 3 each week. And as you know they tend to focus around a certain timeframe so you'll be busy keeping up. But this is of course something that you can adjust to as you go along.

-If the plan is to live off the dividends at some point, then you need to keep some sort of a balance when it comes to the currencies. If your living expenses are in Euro but the majority of income is in USD, that can create problems. Or it can go the other way and then you'll be smiling, but we never know. This too, is something that you don't need to worry about now but it's something to think about in the long run.

[elmagoayulin]

Hello, as promised here is my portfolio, I list it sector by sector and at the end a summary,

HEALTHCARE --> I have nothing here 

My watchlist is ABBV, PFE, MRK, JNJ, GILD, OMI, DGX, AMGN, ABT, MDT. I will add sometime in this quarter (hoppefully) ABBV but no clear candidate for the second position (for now my idea is to have 2 positions per sector). Any idea is more than welcome!!

ENERGY --> 46% of purchases, 31% of dividends

TGP 57 shares @ 17.56
TK 1447 shares @ 8.31
The big weight of this sector is due to TK that is a value position and at some point I will sell most of the TK to change for DGI companies. In fact TGP and TK are both part of the same value position.
Thinking of adding XOM in the near future

BASIC MATERIALS --> 3.5% of purchase, 4.5% of dividend

EQM 13 shares  74.95
Again not many ideas to add here, any suggestion?

TECHNOLOGY --> nothing here 

I am not very convinced wether I want technology or not. These are the holdings in my watchlist QCOM, CSCO, INTC, TXN, IBM, MSFT, FB, AAPL, GOOGL, V, MA, INTU. Out of all of them I like AAPL if there is a correction and probably MSOFT or INTC.

UTILITIES --> 7% of purchase, 7.5% of dividends

SCG 20 shares @49.55 (I will open a thread about the merger with D, as I am thinking of buying some more SCG)
NWE 17 shares @ 57.5 (thinking of selling this one and buying DUK, what you think about?)

FINANCIALS --> 7% of purchase, 6.6% of dividends

ORI 51 shares @ 19.6
LAZ 22 shares @ 45.1

CONSUMER DISCRETIONARY --> 7% of purchase, 6.7% of dividends

LEG 21 shares @ 47.6
EAT 30 shares @ 33.06

CONSUMER STAPLES --> 7% of purchase, 6% of dividends

MO 15 shares @ 65.01
CVS 14 shares @ 72.46

TELECOM --> 7% of purchase, 9.2% of dividends

T 28 shares @ 35.5
VZ 21 shares @ 47.51

REIT --> 11% of purchase, 26.5 of dividends 

OHI 70 shares @ 28.84
NRZ 58 shares @ 17.16
I will add O this month, as I consider REIT more risky than the others I will probably have more posiions here with less weight

INDUSTRIALS --> 3.5 of purchase, 1.85 of dividends

HON 7 shares @ 143.1
In the watchlist ETN, CAT, FAST, CMI, EMR, UPS, GE, LMT, WM, MMM. OUt of them CMI is the one I most like

That´s all I add an image for an easiest overview. Looking forward to hear your comments!!

   

[ChadR]

Why are you thinking of selling one of your utilities and buying DUK? Any reason you can't own all 3? I'm not a big fan of selling just to sell. If you have a reason for selling one that's great, but I wouldn't sell one just so that I could own DUK.