Dividend Growth Investing

Recent Buys

Posted by FI Monkey

So I’m on vacation, but I’m not dead. Before I go out and swim for a bit, I decided I’d execute some orders (sounds so much cooler than it is) on the stocks I’d been comparing/eyeing this weekend. As usual, I will preface this by saying I am new to this whole thing and if there were a gradient from completely green to Warren Buffett, I would be firmly in the green still.

That being said, I actually did my own analysis on the stocks I did purchase today, albeit nothing too deep or intensive. For example, I’m not to the point where I’m using P/E to determine whether I should invest. I’m sure I’ll get to that point, but for the moment I’m not going out on any crazy limbs by establishing myself with these companies. I’m keeping it simple.

So far, I’m using these metrics (which could be absolutely terrible, I’m sure) which I took largely from David Fish’s CCC list:

  • Reasonable dividend payout (2 – 5% yield)
  • Long history of increased dividends
  • An upward trajectory in stock price over the past 5 years

Feel free to point out my terrible strategy. I am completely open to learning — that’s what this whole thing is about. For now, I’ll get into which stocks I bought!

Realty Income Corp (O)

Realty Income Corporation

I’m sure many of you are quite familiar with this one. I read that it is described as the “Monthly Dividend Company” on its Wikipedia article. Honestly, I didn’t even comprehend that this was a REIT stock until after I purchased it. But hey, it looks strong to me. The company was founded in 1969 and was recently added to the S&P 500. It’s had 22 years of consecutive dividend growth and its current dividend yield is at 4.85% from what I can tell. I bought in at $47.12 with 10 shares. This was my second out of three commission-free trades on Scottrade (yay!).

Target Corporation (TGT)

Target Corporation

Last of my commission-free trades was Target. While I do own Walmart stock, it’s Target my family visits 4-5 times per week. Like Diet Coke, we have a personal stake in the success of this company and based on how it’s done previously, it seems like it will keep going strong for years to come, so by that measure I had no qualms going forward. It’s been around for over 100 years now and is also included in the S&P 500! Although I read that Target Corp’s dividend growth wasn’t so hot in recent years, it has still continued to climb over the last 32 years. The dividend yield is presently 2.46%, which is good enough for me. I bought 6 shares at $84.48.

This brings my total number of stocks owned up to seven (7) for a stock portfolio currently worth about $3,450.00.

Picking Products, Watching Stocks and Generally Hoping for the Best

Posted by FI Monkey

I’m taking a break from cleaning my house to post an update on my recent activities, partially as a reward but also to help me get some of my thoughts down.

How do I ... business?

How business makes me feel.

This past week, I’ve been trying to choose a product to start my side business with. As I mentioned recently in my post on making money on the side, I am in the process of getting things rolling with Amazon FBA and, subsequently, an e-commerce business. Featured prominently in that post was Kermit as I was trying to make it clear that I am very green to the process from the business side, although I have spent years working with various e-commerce shops from the engineering side.

So the first step in any commerce-based business, as far as I can tell from what I’ve been studying, is to choose a product. Well, for some that may be easy, but for me picking products has been nearly impossible. There are so many things to choose from and I definitely don’t want to recreate the wheel here. I have a list of products I plan to start with and later I will narrow that down by setting up a score for each — essentially going with the product that I think will sell best while maintaining a decent profit margin, all while being something that I can pivot off of for similar products.

All the things on my list are of high quality, which is extremely important to me. As I mentioned previously, I wouldn’t want to sell anything to other people that I wouldn’t sell (okay, give) to my mother. That qualifier has sort of narrowed my list of possibilities way down, which is nice, but there are still hundreds to choose from. It could take forever.

This is exactly why I’ve given myself a deadline. I have to have chosen five products by this Monday. And that’s after choosing many and narrowing down the list based on a series of factors both of my own and sort of plucked from various posts and videos I’ve been watching. I don’t want to take forever on this. The next goal is to find a supplier for said products, foreign or domestic. Either way, it has to be done and soon!

Another interesting thing has been watching my individual stocks and comparing them to my index funds. Obviously there hasn’t been enough time to compare them in a meaningful way, but still — the index fund has been killing the individual stock selection. Luckily, I’m a buy and hold kind of fellow and won’t be selling my stocks any time soon.

Despite the downward trend my stock selections have already entered, I have transferred another $1,000 to Scottrade for some buys on Monday. That money is to take advantage of my free trades which, inconveniently, have an expiration date. For me, I see that as free money.

At this point, I don’t think I will invest more into the companies I already have. Once I have a decent selection, perhaps 10 or 15, I think I will do that but while I have 5, my plan is to diversify my selection a bit more. I don’t have a hard and fast rule here, it just feels like what I should do. Maybe some of you fine people can weigh in on this with your valued opinions.

For now, I should get back to work. This place needs to be clean before I go (I hate returning to a dirty house). For this next week, I will be out of town on a much-needed vacation so I’m not sure how often I’ll be posting, but rest assured I will be back to keep you posted on where I take my portfolio and my side business.

Recent Buys

Posted by FI Monkey

Ha! “Recent buys.” Am I doing this right?

So as I mentioned in my last post, I purchased several more stocks after my first one, which was for Coca-cola!

The research behind these was essentially the same, meaning I stood on the shoulders of some of the DGI Giants in our circles and moved forward based on their hard work. I’m thinking that my next stock purchase will take some actual hard work and due diligence on my part, so I’ve already started putting some legwork into that. But meanwhile, I figured I’d update on what I actually got going.

Please excuse the smaller number of shares. I realize some of you have 10X or more what I have here, but remember I’m just getting started:

5X UNP @ $97.5899 for $494.95

5X WMT @ $73.5599 for $374.80

5X MMM @ $156.719 for $790.60

5X PG @ $82.379 for $411.90 (this was a free trade)

So, as you can see on my portfolio page (which I promptly updated after buying up the stock for Proctor & Gamble), I have updated my total stock equity amount to $2,460.35 from $2,048.40. My trades for UNP, WMT and MMM all came with the $7 trade fee from Scottrade, but luckily my referral situation finally got figured out. I had signed up through a referral link but something went wrong in the process. All it took was a quick call to customer service and they were quick to help me out (very nice!). So now I have two more free trades to make within the next 30 days!

I’ve also added another $2,500 to my Vanguard SEP IRA which brings its value to about $15,270!

All these recent moves have pushed me over the $40k mark in combined brokerage + investment accounts, which is … such a good feeling.

I think as I move toward the $50k mark, my goal is to start adjusting my portfolio to include a higher percentage (which currently sits at 0%) of both bonds and international stocks. Most likely, I’ll go with the Vanguard index funds that track both those markets.

What do you guys think of VBMFX and VGTSX? Should I buy into those next? Should I wait until I have $10k for each and go with  VBTLX and VTIAX for a decreased fee?

As always, your input is appreciated!

First Stock Purchase: Coca-Cola (KO)

Posted by FI Monkey

Coca Cola It’s official! I have purchased my first stock ever!

After going over all the fine advice offered in my last post (thanks so much, guys), I’ve decided to go with 10 shares of Coca-Cola Company.

Honestly, it was a huge help reading the Coca Cola (KO) Dividend Stock Analysis post from Div4Son. While I’m getting my own analysis sheets going, it definitely helps to have friends!

Jason from Islands of Investing also gave me a great link to dig into PE ratio to remove some of the mystery from that term, so I also appreciated that.

Oh, and to give a few details, I bought just 10 shares of KO at 41.1599 ($411.60). Combined with the $7 trading fee, it cost me $418.60. Man, I can see how that starts to add up. Still, it’s better than the $20/trade I’d have to pay with Vanguard after the honeymoon period is over.

What an exciting day! And, of course, it went way more smoothly than I thought it would.

Now I’m looking into what to purchase next, but apparently there are only certain hours where trades can happen (I tried buying some Union Pacific stock as well). I’ll wait to see what the price looks like in the morning and perhaps give that a shot then.

Thanks for all the help, guys. I’ll update once I figure out what to buy next!

Update: After buying 5 shares each of UNP, WMT and MMM (in that order), I just created a Portfolio page like all you fancy people!

Learning the Ropes – Starting up my Brokerage Account

Posted by FI Monkey

Hey guys. So I’m still focusing on building my side business this week, but I also don’t want to let my primary goals go either.

Today, I’ve been getting things set up for taxable investing. Last week, I set up a brokerage account with Vanguard for this very purpose and went through the trouble of transferring some money over only to learn that, for an account the size of mine, they only allow $7 trades for the first 25; after that, they become $20 each. So I decided to use Scottrade in the mean time while my Vanguard + Brokerage add up to more than $50,000. After that point, the trades become $7 each with no limit.

Once that happens, my plan is to consolidate everything over to Vanguard so that both my taxable and non-taxable accounts are there. Whether that will actually happen is up to future me and how much it will cost me. Ideally, it would be nothing since I’d want to hold on to the same stocks and such. Worst case, I can keep trading with Scottrade.

On the other hand, the reason I’d like to keep things with Vanguard is that once you have $500,000 with them, all trades become $2! I’m sure there’s something even more amazing out there, but for someone who’s as green as I am to stock trading, that seems like a pretty great deal.

And as some of you are probably paying close attention, you’ll note that I already have a brokerage account through Chase, but my plan is to also consolidate that. I hate having so many accounts all over the place. I’d rather have everything set up simply so there’s less for my simple mind to worry about.

All that being said, my account with Scottrade should be ready for funding this week and I should be ready to get things started with some dividend growth stocks. From what I’ve read recently, Coca Cola isn’t a bad one to start with, so I’ll probably go with that and a few other familiars just to get things rolling. I’m only starting with $2500, so I’ll probably invest in a handful of stocks in addition to KO (most likely borrowed from the amazing Dividend Growth blogs I follow). I’m still trying to come up with my own vetting process which, admittedly, is also largely borrowed from the blogs I read.

For those of you who I’ll be stealing from, please accept it as flattery more than outright theft! I just want to be more like you fine people.

I’ll probably update once things are actually set up and I’m ready to start buying, but while we’re on the subject…

Any recommendations for my first five or so stocks?

Any links to a checklist I should go over to vet each one before buying?

Any general advice?