The other day while researching for the best dividend stocks and ETF’s to buy for my portfolios, I read a really great article called ‘The World’s Best Dividend Portfolio’.
The title, of course, got my attention immediately, but that wasn’t what really hooked me in.
How to Properly Invest In My Portfolio – What Percentage Should I Allot to Each Stock and ETF?
For ages I’ve been wondering how to properly divide my equities in my portfolio (not my retirement portfolio – that requires a different method and less risk). I’ve already decided on the breakdown of the categories but still had no idea how to focus in on individual amounts:
10% goes to Fixed Income Investments
90% goes to Dividend Paying Stocks, Dividend ETF’s, REIT’s and Index ETF – very diverse portfolio
I am not counting cash, this is separate from my investments, even though many people include it in the actual percentage.
As you can see my decision is to keep my portfolio more on the aggressive side.
Rule of thumb – the higher your Fixed Income Investment percentage is the lower the risk factor and the more conservative your portfolio will be.
DISCLOSURE – You decide what your risk level will be. I’m just demonstrating my own risk tolerance and portfolio type.
So out of the 90% I didn’t know the best way to break that down and decide how many shares of each I’ll be buying.
And this is exactly how the article guided me. The author/investor decided to take $1000 for each chosen stock. And I thought that is simply brilliant!
And as the popular saying goes – Steal Great Ideas
Which is exactly what I intend to do.
I have done this method for my Dividend Paying Stocks and ETF’s, plus for my REIT in my portfolio as well.
I used a bit of a different approach for my Index ETF in my portfolio. Instead of taking $1000 for each one, I decided to do $2000. The main reason is, they are just too expensive and I am barely getting any shares, this way I can have a few more to play with.
The Trader Chick’s Picks for Dividend Paying Stocks and ETF’s
After a lot of researching, I’ve narrowed my selection down. This includes studying charts to see where my entry points will be. It is all explained below.
Basically, in my opinion as of May 2014, the market is overbought and is in a full on bull run. Which is great news for whoever is already in the positions. But terrible for people who want to enter them.
Definitely not one of my best qualities, but as I wrote before – Trading has become my greatest teacher ever – and one thing I am bumping my head on over and over again – my lack of patience.
Since I’m not day trading here and this is for the long haul, I’ve got all the time in the world to get in at the right price. If I buy it when it’s at the highest prices, I will be extremely bummed when it reaches the price I want and then I’m also sitting on a loss.
Starbucks – (SBUX) years ago, when I knew very little about investing I actually bought this stock. But back then I had no idea what I was doing and entered it at it’s highest (for that year). It fell, a lot, and then it crawled out of it’s hole and the minute it was over a couple of points I immediately sold it. I wasn’t in it for the long haul, short haul or any haul. I was just roaming aimlessly.
If I had bought this stock due to all that it represents and all its potential, I would be sitting happily on it right now, cause since then it has gone up over 10 points. And I truly believe it will be going further and further up.
Everything about this company is great with lots of growth and international immersion, plus expansion. This is obviously giving you the super short reason for why I want to buy this company.
It is a dividend stock, but barely enough for that to impact my interest.
BP Prudhoe Bay Royalty Trust – (BPT) – I’m not a big person on the Oil, Gas and Consumable Fuels sector, however, it is necessary to have it in my portfolio for diversification. And even more so when the company is offering almost 14% dividend yield.
At&T (T) – Why this company? For one, it’s a telecommunications company that has been around for ages and is not going anywhere. Plus, its an aristocratic dividend company which means it’s been raising its dividends for over 25 years and is proud of its status. And on top of that, it is a high yielding dividend company.
CenturyLink, Inc. (CTL) – Another Telecommunications stock with great earnings and a wonderful dividend of almost 6%.
Frontier Communications Corp. (FTR) This is another telecommunications company. But that’s not why I wanted to invest in it. First of all, it’s a great dividend stock (almost 7% yield). Secondly, I like to have some stocks that are below $10 that are not your typical penny stock scams. This company has been around for a while. It has a good steady, slow growth.
Windstream Holdings, Inc. (WIN) – this particular company is in the tech sector, even though it is telecommunications, it’s more diverse. But the biggest grabber for me:
Disney (DIS) – Who doesn’t love Disney? I have little regrets about buys and sells I did before I got seriously involved in investing. This is one of them. I had this amazing, hold-forever stock at $40! $40! Now it’s not only doubling in price, but I see it going higher and higher. And it offers a small dividend. Nothing to write home about, but every little bit helps.
Shaw Communications (SJR) – this company, which is actually located in Canada, is part of the consumer discretionary sector. What this means is that when the economy is booming so are discretionary stocks. In other words, the exact opposite of discretionary is staples. However, this company mainly works with cable networks, internet and other similar services. And in my experience, whenever the economy is doing poorly, less and less people go out of their house and are staying at home watching cable or surfing the internet. So to me this company is in the wrong sector. But that’s just me.
Intel Corporation (INTC) – this semiconductor company is probably as well known as Apple, only way way cheaper. They have a great reputation and a healthy dividend (3.5%). For the price, its kind of a must have.
Guggenheim Multi-Asset Income – (CVY) – As the saying goes – ‘Don’t put all your eggs in one basket’. This ETF is perfect for it. Aside from having their hands in practically every sector, it also has a hefty dividend payout of 5%.
iShares Select Dividend ETF (DVY) – This is another one of those ETF funds that has a good mix of the top paying Dow Jones dividend companies. It is a great asset to have in my portfolio for its diversity. Plus the yield is around 3% combined of companies that I would like to own, but are way too expensive for me right now.
Global X SuperDividend ETF (SDIV) – this fund holds stocks from US and international companies with the highest dividend yields in all sectors. This is a bit more risky, so I will have to keep my eye on it. However, the dividend rate is amazing – 6.25%.
Marina 'The Trader Chick' Villatoro