Featured image for the DGI For The DIY Portfolio

My Dividend Growth Portfolio

Portfolio History

The ‘DGI For The DIY’ portfolio is a real-time, real-life, dividend growth portfolio that comprises a significant part of the retirement savings for this Do-It-Yourself investor.

I began writing about this investment account after constructing it in the beginning of 2013, and have written quarterly updates about it on Seeking Alpha ever since.

This self-directed IRA account originally began as an assortment of mutual funds recommended to me by the full-service broker that was managing my retirement plan at work. Then, in 2012 the company I worked for shifted from the full service broker to an online broker, and I started putting new cash contributions to work in individual stocks.

Wandering Aimlessly

Unfortunately, I was investing without any sort of plan or direction and fell victim to a problem that plagues many young investors: focusing on risky “high-upside” stocks rather the boring blue chips that “old people” are supposed to own.

Not only was I buying risky stocks, but I was also buying things I really didn’t adequately understand, like MLP’s, commodity ETFs, foreign stocks, biotechs, and basin royalty trusts.

Needless to say, this approach wasn’t working very well for me, and my investment returns badly lagged the market.

A New Approach

Fortunately, in January of 2013 I came across Seeking Alpha and began reading articles from the dividend investing strategy section of the site, and the corresponding comments sections that followed them. I found that many of the successful veteran investors were talking about long-term buy and hold investing, and more specifically, Dividend Growth Investing.

While reading the comments section of an article, I came across a recommendation for a book called “The Single Best Investment” by Lowell Miller. That book and the wisdom shared by some of the seasoned investors on Seeking Alpha likely saved me from myself when it came to building a portfolio that would help me intelligently save for my retirement.

Over the course of the next two months I methodically sold off the original collection of higher risk stocks and mutual funds and built a portfolio of fifty-plus companies that I continue to write about to this day.

I began investing in the stock market in 2005, and it took me seven years of wandering aimlessly before I found out about DGI.  My goal with this site is to provide others looking for a place to start with information on how to be a successful do-it-yourself ‘DIY’ investor, and give them the courage to take control of their future retirements.

I’m hopeful that by sharing my story and providing a running commentary on the portfolio, I can help others who are in a similar situation to where I was just four short years ago.

Portfolio Guidelines

The purpose of this portfolio is to fund a portion of my future retirement. Being forty years old, I have another 25+ years to go until I reach that milestone.

As my approach has evolved, I’ve established some simple investing guidelines that help meet my goal of building a portfolio that produces a consistent and reliably increasing stream of dividend income.

  1. Buy companies that consistently show positive growth in earnings and translate those earnings into increasing dividend payouts to shareholders.
  2. Focus on companies that are investment grade, with S&P credit ratings of BBB or higher.
  3. Maintain a diversified portfolio spread across multiple industries.
  4. Reinvest all dividends back into the companies that pay them.
  5. Consider for sale any company that cuts or freezes its dividend.
 I’ve also established a goal of 10% annual income growth for the portfolio. This income growth will come from organic dividend growth and reinvestment of dividends, as there are no longer any cash contributions being made into this account.
Using $2,000 as a starting point, here is how 10% annual dividend growth will grow over the next twenty-five years. If I can meet that annual growth rate, this portfolio will produce over $25k in dividend income in 2044, the year in which I am sixty-six years old.
Dividend Income Projection
Dividend Income Projection
The column to the right shows my actual dividend income, allowing you to see the progress being made. So far I am ahead of the pace, and exceeding my goals.

My Dividend Growth Portfolio

The portfolio has been a work in progress since it was first created, but I think it has turned into a solid group of quality companies.

Here are the current holdings:

Quarterly Portfolio Updates

As mentioned previously, I have written updates about this portfolio on Seeking Alpha since constructing it in early 2013.

Below are links to the quarterly updates highlighting my portfolio management, including: buys/sells made during the quarter, announced dividend increases by companies I own, and the progress made in income and capital appreciation.

This chronological history of my efforts provides a real-life look into the management of a dividend  growth portfolio:

In addition to the quarterly recaps, I also publish monthly updates that highlight the increasing dividend income the portfolio generates. For those blogs, please check out the portfolio update section of the site.

If my portfolio catches your interest and you would like more information about Dividend Growth Investing, please visit my DGI Resources section to find more places for research on the strategy.

A Site For Do-It-Yourself Dividend Growth Investors

%d bloggers like this: