02-27-2017, 12:14 PM
rayray,
Thanks, glad you enjoyed the site!
I don't really see the $500 investment amount changing in my public portfolio as it is based on the amount of contributions going in, and that won't be changing much going forward. I reinvest all dividends back into the companies that pay them, so the only source of funds for making buys is from fresh capital or by trading out of an existing position. The $500 amount allows roughly two purchases per quarter.
As to returns, the 12% is based on capital appreciation plus dividends. So roughly speaking a 4% yield would require an 8% growth rate while a 2% yield would require a 10% growth rate if valuations remain on a level basis. Of course, buying stocks below fair value gives a boost to return potential as stocks normalize to fair value levels.
However, the 12% number is far from set in stone, there are plenty of companies I hold that don't meet those numbers every year. It's just something I keep in mind when making new purchases, and is something I've put a bit more focus on lately after getting the core of my portfolio built. Generally speaking, I'm not going to sell out of a position just because it doesn't meet the 12% goal, but for new purchases its something I consider when putting together my watch list of potential buys.
Thanks, glad you enjoyed the site!
I don't really see the $500 investment amount changing in my public portfolio as it is based on the amount of contributions going in, and that won't be changing much going forward. I reinvest all dividends back into the companies that pay them, so the only source of funds for making buys is from fresh capital or by trading out of an existing position. The $500 amount allows roughly two purchases per quarter.
As to returns, the 12% is based on capital appreciation plus dividends. So roughly speaking a 4% yield would require an 8% growth rate while a 2% yield would require a 10% growth rate if valuations remain on a level basis. Of course, buying stocks below fair value gives a boost to return potential as stocks normalize to fair value levels.
However, the 12% number is far from set in stone, there are plenty of companies I hold that don't meet those numbers every year. It's just something I keep in mind when making new purchases, and is something I've put a bit more focus on lately after getting the core of my portfolio built. Generally speaking, I'm not going to sell out of a position just because it doesn't meet the 12% goal, but for new purchases its something I consider when putting together my watch list of potential buys.