Here is a review of my Low Yield Portfolio. It is the first account I created when heading down the path of investing for income. Being an IRA I cannot touch the money until I turn 59 1/2 years old (I’m 54 now) therefore all of the dividends received get reinvested. This portfolio is designed to be the least volatile and yield the least. I’m trading safety for returns.
I started this portfolio in July of 2017 when rolling over a defined benefit plan from a company I was running. I set out the main goals of this portfolio to be capital preservation, dividend income, and dividend growth with enough diversity to weather market storms. I have 51 positions in the following sectors.
Admittedly it’s weighted a little heavy in financials as I’m trying to keep any individual sector to less than 25% of the portfolio. I may need to make some moves in this regard but I’m not prepared to just yet.
The annual dividend yield is about 2.81% and dividend growth projected for the last 5 years is about 4.5%. It’s projected because I have only held the account since 2017. This year’s growth is slow so far but that should even out over time.
This year so far
Dividend Growth Rate
The last 5 years
The last 10 years
The value of this portfolio has grown more than I expected. The crazy record stock market rise is mainly responsible for that. I would have been happy with a much slower growth rate. Hopefully if there is a big market downturn the portfolio would have grown enough to make any losses small. As you can see below I’ve done pretty well compared to the S&P 500.
Even though I’m not investing for stock price growth it is something I still watch. I will make moves depending on a company’s long term prospects and their increasing or decreasing dividend yield. Below are my biggest stock price winners.
|Symbol||Company Name||% Gain|
Below are my biggest losers.
|Symbol||Company Name||% Loss|
|EPD||Enterprise Products Partners||-6.83%|
All in all stock price appreciation in this portfolio has been good. Out of 51 different positions the stock price is down on only 8 companies.
The income increase forecast is very good at about 7.5%. Because all the dividends are reinvested into the portfolio a hypothetical annual dividend income of $10,000 over the next 5 years will increase to about $14,356.29.
|Annual Income||% Increase||$ Increase|
|$ 10,000.00||7.50%||$ 750.00|
|$ 10,750.00||7.50%||$ 806.25|
|$ 11,556.25||7.50%||$ 866.72|
|$ 12,422.97||7.50%||$ 931.72|
|$ 13,354.69||7.50%||$ 1,001.60|
|$ 14,356.29||7.50%||$ 1,076.72|
I look forward to turning 59 1/2. The dividends at that point no longer get reinvested and instead supplement the income from my other portfolios.
The complete list of stocks in this portfolio as well as my other portfolios can be found on my portfolios page. I’d be interested in hearing about your portfolios and thought process. You can post questions and comments here, on Twitter @yield_chasing, or send them to firstname.lastname@example.org.