01-04-2015, 11:55 AM
Sorry for the long delay, just wanted to update you guys on my transition efforts.
Last summer there was some discussion about the vast chasm between dividend investing for current income (HYLG) and dividend investing for long term dividend growth (LYHG). I realized that, at age 55, my current port of LYHG equities was not going to spray off sufficient income to allow me to consider retirement at 60 without dipping into my nest egg.
So I reconfigured my port. The specific goal was to own high quality equities that I could project to provide 10% return on cost by the time I turned 60.
The result was 12 LYHG equities and 13 HYLG equities.
Before I get to the specific positions, a note about my port. I'm a fairly conservative investor, so only 36% of my port is in equities. I have 26% in individual issue investment grade bonds, 26% cash, and 12% in hedging vehicles.
As I get closer to retirement I will likely take the proceeds from maturing bonds and invest them in equity positions so that I can enjoy an increasing income stream from my port during retirement. I am planning on only withdrawing the dividends.
The bottom line was dividend income of $2.8K in Q3 and $3.8K in Q4. The bonds give me another $1.5K per quarter. I believe that next quarter will be somewhere in between due to slight adjustments in positions and distribution cuts in MLPs as a result of the decline in oil prices. Obviously I could easily double this amount simply by investing my cash, but I am waiting for the right spot to do so.
The LYHG positions are as follows:
ACN
ARG
CHD
CMI
CVX
GE
GWW
MCD
SBUX
SJM
UNP
WBA
The HYLG positions are as follows:
DLR
FSIC
HTGC
KMI
LNCO
MAIN
O
OHI
PFLT
SDRL
STAG
TCPC
VTR
As you can see, this part of the port is concentrated in three industries - REITs, BDCs and Oil and Gas MLP type instruments.
Note that none of of my equity positions makes up more than 1.8% of my TOTAL portfolio and most are around 1%.
It's been.... interesting. The REITs and BDCs have been pretty steady. The Oil and Gas stuff has been spanked. I took two fliers (LNCO and SDRL) and have paid the price. I'm keeping both positions for now, but have learned a good lesson about looking at debt levels more closely.
In general, I'm totally at ease with the LYHG positions but the level of watchfulness required for the HYLG positions is significant. I suppose that is the price to be paid for the income stream
.
Last summer there was some discussion about the vast chasm between dividend investing for current income (HYLG) and dividend investing for long term dividend growth (LYHG). I realized that, at age 55, my current port of LYHG equities was not going to spray off sufficient income to allow me to consider retirement at 60 without dipping into my nest egg.
So I reconfigured my port. The specific goal was to own high quality equities that I could project to provide 10% return on cost by the time I turned 60.
The result was 12 LYHG equities and 13 HYLG equities.
Before I get to the specific positions, a note about my port. I'm a fairly conservative investor, so only 36% of my port is in equities. I have 26% in individual issue investment grade bonds, 26% cash, and 12% in hedging vehicles.
As I get closer to retirement I will likely take the proceeds from maturing bonds and invest them in equity positions so that I can enjoy an increasing income stream from my port during retirement. I am planning on only withdrawing the dividends.
The bottom line was dividend income of $2.8K in Q3 and $3.8K in Q4. The bonds give me another $1.5K per quarter. I believe that next quarter will be somewhere in between due to slight adjustments in positions and distribution cuts in MLPs as a result of the decline in oil prices. Obviously I could easily double this amount simply by investing my cash, but I am waiting for the right spot to do so.
The LYHG positions are as follows:
ACN
ARG
CHD
CMI
CVX
GE
GWW
MCD
SBUX
SJM
UNP
WBA
The HYLG positions are as follows:
DLR
FSIC
HTGC
KMI
LNCO
MAIN
O
OHI
PFLT
SDRL
STAG
TCPC
VTR
As you can see, this part of the port is concentrated in three industries - REITs, BDCs and Oil and Gas MLP type instruments.
Note that none of of my equity positions makes up more than 1.8% of my TOTAL portfolio and most are around 1%.
It's been.... interesting. The REITs and BDCs have been pretty steady. The Oil and Gas stuff has been spanked. I took two fliers (LNCO and SDRL) and have paid the price. I'm keeping both positions for now, but have learned a good lesson about looking at debt levels more closely.
In general, I'm totally at ease with the LYHG positions but the level of watchfulness required for the HYLG positions is significant. I suppose that is the price to be paid for the income stream
.