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Thursday, April 26, 2018

Recent Market Volatility

With all the recent market volatility I wanted to quickly share my thoughts on the matter. It can be very hard and very stressful for an investor when the market is volatile. If you have a lot of money invested you may cringe when the market drops and the value of your money drops with it. However, dividend growth investors should welcome market volatility with open arms. 




Why do I say this? 

In terms of the history of the stock market - every drop, decline, recession, weakness, etc. has always been followed with an up tick in the overall market. If you had bought into the overall market 5, 10, 15, 20+ years ago then you would understand this. For first time investors this can be a difficult thing to process. If you invested in January of 2018 only to see your money drop the following months you may swear off the market and sell at a loss. However, investors need to have patience with the market. Patience can be a hard thing to come by though, especially in our fast paced world.

Many people are afraid of the stock market for these reasons. The news channels and networks try to strike fear into people and they use buzz words to make it sounds like these market drops are so terrible. They talk about "biggest drop since..." or "the market fell sharply" or "$ billions in market cap have been erased"

This is all because the news outlets knows what sells and people see these words and continue to watch and listen. If you are a long term investor you really shouldn't have anything to worry about. These periods of weakness offer great opportunities for investors to average down. If you can take advantage and buy stock during these periods of weakness then you can effectively make your money go further and decrease the time to retirement.

The one thing about dividend growth investing is that I never really intend to sell stock. What I mean is that I'm not going to build up a large sum of money in the stock market and then sell off my shares and live off the profits. Many people in retirement do just this and that's why they care if the market drops significantly or not. Can you imagine retiring in January only to see the market drop for the next 3 months? It wouldn't be a great sight that's for sure. 

That is why I really love dividend growth investing though. In these 3 months of market volatility not one of my stocks has cut or reduced their dividend. In fact I've had a plethora of stocks actually raise their dividends by 4% or more! These are stocks that have seen their prices reduced significantly and that means their yields have gone way up. 

There are so many stocks that are now undervalued in my eyes. A lot of these stocks are in the consumer goods section. I believe stocks such as Kimberly Clark (KMB), Johnson and Johnson (JNJ), Proctor & Gamble (PG), 3M Company (MMM), The J.M. Smucker Company (SJM), General Mills (GIS), and The Clorox Company (CLX) are just a few of the great companies that are currently on sale. 

They all offer tremendous dividends and most of them have increased their dividends recently. Their stock prices have taken a beating and their yields are at all time highs. It is really hard to imagine these companies not existing 5-10 years from now since they provide such essential products that are used every day. 

I'm continuing to buy and I hope the market continues to be volatile while I pick up shares at a discount. Investors (not just dividend growth investors) should welcome weakness with open arms. Dividend growth investors will see the yields rise and get them to financial freedom that much sooner. 

The only caution I would have is to not invest a large sum of money at once. This is because no one really knows which direction the market is going to go. It could drop more or it could push forward to all time highs. My best advice is to always be investing. If you can invest 1-2 times a month at a lower amount then you will catch the market at its highs and its lows and eventually the market will go up. 


What do you guys think? How do you handle market volatility?

 

Wednesday, April 18, 2018

Recent Buy: Dominion Energy (D)

The second purchase I made this month came right after the first. The market has been volatile, but the most important thing is getting money into the market as often and as fast as you can. There is no point waiting days or even months to try and see if the market will go lower. I try to find stocks that are undervalued or that I think are a good value relative to the market. You can always find value in the market even when it was at all time highs. It may have been harder, but there were still good buys out there. 

On April 6th, I was able to buy 15 shares of Dominion Energy Inc. (D) for $66.90 a share. This adds $50.10 of yearly dividend income to my portfolio! 

Some quick facts about Dominion Energy:
  • EPS of 3.38
  • P/E of 19.45
  • Current yield of 5.08%
  • EPS growth as follows
    • 1 year - -1.9%
    • 3 year - 14.6%
    • 5 year - 6.3%
  • Dividend growth rate as follows
    • 3 year - 8.1%
    • 5 year - 7.5%
    • 10 year - 7.6%
  •  Dividend payout ratio at 89%
The utilities sector has gotten hit hard recently with many names performing very poorly this year. However, all of these companies boast generous dividend yields and will be fine in the long term. I'm actually a customer of dominion energy in northern Virginia. They serve a large number of customers in northern Virginia and will continue to do so going forward. This area is growing rapidly and their business will continue to grow. I don't see any competitors taking over the space anytime soon. 

This was probably my last purchase until June, but I'll keep you guys posted. 


Let me know what you guys think! What have you guys been purchasing?

Tuesday, April 17, 2018

Recent Buy: 3M Company (MMM)

I've made two purchases this month to conclude all my purchasing for the month. I was able to continue to take advantage of market weakness and get shares at a discount! This company has been on my radar for a long time now and I was happy that the market weakness offered a good opportunity to get my hands on it. Every buy is on step closer to financial freedom and it feels absolutely amazing. I look forward to purchasing more and more stock as I know it will get me closer and closer to that sweet freedom. 

On April 2nd I was able to buy 5 shares of 3M Company (MMM) for $210.70 a share. This adds $27.20 of yearly dividend income to my portfolio!

Some quick facts about 3M Company: 
  • EPS of 9.17
  • P/E of 23
  • Current yield of 2.50%
  • EPS growth as follows
    • 1 year - 12.4%
    • 3 year - 7%
    • 5 year - 7.7%
  • Dividend growth rate as follows
    • 3 year - 11.2%
    • 5 year - 14.8%
    • 10 year - 9.4%
  •  Dividend payout ratio at 59%
This is a tremendous company that makes a ton of different products. I'm really happy with this purchase and the ability to add a high quality dividend growth company at a discount. As I write this the stock is already up 4% since I bought it. Now, again I don't really care about price as long as the dividend grows and is a good rate relative to the price. 

Let me know what you guys think! What have you been buying this month?

Wednesday, April 11, 2018

Dividend Income Update - March 2018

I have to apologize as I have been very busy with work and life this past month and it has been very hard to find time to write about my dividend progress. Nevertheless I want to continue writing and posting to try and help others achieve financial freedom. While the market continues to be volatile I continue to buy shares of high quality dividend growth companies.




March was my best month ever in terms of dividend income. It was truly incredible that in only 3 years time I've able to record nearly $500 in one month from dividend income. That number IS a tangible number that can help pay bills or for now simply reinvest in the market!

The companies that paid me this month are as follows:


TRAVELERS COMPANIES TRV $6.48
PEPSICO INCORPORATED PEP $9.66
T ROWE PRICE GROUP TROW $10.50
PRINCIPAL FINANCIAL PFG $26.52
GILEAD SCIENCES INC GILD $7.98
BP PLC FSPONSORED BP $21.00
LOCKHEED MARTIN CORP LMT $10.00
KRAFT HEINZ COMPANY KHC $15.63
GENERAL MOTORS CO GM $12.16
UNILEVER PLC FSPONSORED UL $11.58
QUALCOMM INC QCOM $19.95
DOMINION ENERGY INC D $10.86
VF CORPORATION VFC $9.20
MC DONALDS CORP MCD $15.15
MAIN STREET CAPITAL MAIN $4.94
DOWDUPONT INC DWDP $6.46
JOHNSON & JOHNSON JNJ $26.88
UNITED TECHNOLOGIES UTX $7.00
TARGET CORPORATION TGT $9.30
IBM CORP IBM $22.50
EXXON MOBIL CORP XOM $28.49
EMERSON ELECTRIC CO EMR $9.70
MICROSOFT CORP MSFT $7.56
AMGEN INC. AMGN $19.80
VALERO ENERGY CORP VLO $16.00
SOUTHERN COMPANY SO $12.76
BOEING CO BA $23.94
WELLS FARGO BK N A WFC $12.09
PFIZER INCORPORATED PFE $22.44
KROGER COMPANY KR $6.00
INTEL CORPORATION INTC $9.00
FORD MOTOR COMPANY F $22.88
FORD MOTOR COMPANY F $26.40
CONOCOPHILLIPS COP $6.84
AFLAC INC AFL $6.76

This month I received $494.40 in dividend income! 

This is up from $331.44 for March, 2017. 

This represents a 49.17% increase year over year!

This was truly an incredible month and I'm already looking at close to $550-600 for June! Again, this only took me 3-4 years to achieve and it is incredible the power of dividend growth investing! I can't wait to see where the numbers are in a few years! 

I've already added two stocks in April which I'll write posts about, but that will most likely conclude my buying for this month. The market has been super volatile lately, but all investors should have patience and be happy that you can buy shares at a discount. There are a lot of stocks out there that are at year lows that are sporting generous dividends! 

How did you guys do in March? Let me know!

Friday, April 6, 2018

Portfolio Update - March 2018

I haven't been able to update this blog as I'd like as work has been super busy lately and I haven't had much time to write. I'm still following dividend stocks and actively investing though! This is just another reason why I want to reach financial freedom as early as I can. Having to worry about the stress of work and not having time to do other things like write blog posts is really not ideal. 


With that being said, March was another brutal month for investors and for me as well. I own a lot of Facebook and they got hit hard because of the privacy scandal. I believe they will be fine long term though and think it presents a good opportunity for anyone looking for a non-dividend stock to purchase. They have no competition and have an incredible user base. They also have many other apps that are very popular. 

This March I saw my portfolio value decrease $4,203.54 or -2.15%

It's not fun to see your money go down, but this just presents a good buying opportunity if you have capital to invest. I'm in this for the long term and I will rarely ever sell any stocks so the short term noise does not concern me! As stock prices decrease, dividend yields increase! This means my money is earning me even more while the market is down. 

I was able to make two purchases this month during days that the market was down. On March 7th, 2018 I was able to purchase 14 shares of Exxon Mobil (XOM) at $73.90 a share. This stock has been beaten up lately and I think this is an excellent price for the company. On March 8th, I was able to purchase 6 shares of Home Depot (HD) at $176.80 a share. Again, the market was down and I've wanted to Home Depot for a very long time. They are an excellent dividend growth company and I'm happy to join the team. Overall this added a total of $67.84 of dividends to my annual dividend income. The snowball keeps growing!

This was my 2nd month ever that my portfolio value decreased in a month. I'm not worried since I'm here for the long haul and this just presents great buying opportunities. I'm going to be able to buy another two times in April and hope the market continues to stay lower since the dividend yields are propped up! 

Let me know what you guys think! How did you guys do in March?