And we are back...and I have to say, I learned a lot in the past year.
I didn't write to much here as I was busy with personal problems but I managed to learn how to build a dividend portfolio.
And ofc with learning it also means to make mistakes.
I always wanted to build myself a dividend portfolio but I always chose other ways to invest and I have to say, today, I 'm sad that I didn't start with it sooner.
I started last year in October with around €5000 and I put aside every month €500. So as you can read, I started 6 months ago, building my wealth. If I had more money, I would invest in other things as well (real estate for example) but for now, I'm going to update this blog on a monthly basis. Giving you insight in what I'm buying and how I'm building my portfolio.
My problem with the portfolio, was really getting started. So, one day I put aside some money and started buying some stocks. Not just any stock but really good dividend stocks. Stocks that are paying on a monthly or quarterly basis. I didn't invest in an ETF which would make it also easy as you can spread your risk very nicely but I rather own stocks. It has more risks but it's the first choice you need to make.
So, one of the mistakes I made, and I hope you learn from it, is that I started buying every month a new stock. So today I own 9 stocks in my small portfolio. It is spreading the risk but if I would start over, I would do it differently. As the more stocks you own, and only putting in €500, it's harder to grow your portfolio. Oke, the risk is lower as you are spreading it over different stocks but I do think that it's better to start with a few stocks (one or 2) and build it from there.
So what would I change?
- I would have invested the first €5000 in 1 stock. Giving me income for that one stock.
- Every €500 that I put in monthly, I would buy it in for a second stock till I also reach €5000 in value for that stock.
- After the second stock reaches €5000, I would invest in a 3rd stock, and so on...
So why would I do this? Because I'm living in Europe and I don't have the possibility to:
- Buy fractional shares
- And not be able to buy fractional shares, it's will also not allow me to do DRIP, only if I have enough dividend I can do this to DRIP in the stock.
For those that don't know DRIP (Dividend reinvestment plan). So basically you reinvest the dividend in the stock, getting more shares and more dividend. Compound this and you will earn a lot of dividends and growth over the long term.
So which stock did I buy? I told already that I have 9 stocks:
- MAIN: Main street capital
- ENG: Engbridge
- TD: Toronto Domimion Bank
- BNS: Bank of Nova Scotia
- JNJ: Johnson & Johnson
- BX: Blackstone
- NEE: NextEra Energy
- ABR: Arbor Realty Trust
- TRIN: Trinity Captical
So why did I buy these stocks?
The answer is simple. They have a great dividend yield, they grow their dividend on a yearly basis between 3% - 15%, they have a large track record of paying a dividend and the growth of (most) the stocks is nice on a yearly basis.
The best dividend stock in my opinion is a stock that doesn't grow a whole lot in value but increases their dividend every year with 5% - 10%. Some will argue this but if I want a good dividend then the lower the price of the stock is, the more shares I get the higher my dividend will be. Of course, stocks that grow their dividend every year will also grow in value as this is the basis of a nice value stock.
So for the 9 stocks i'm having today, a bit more in financials then in other sectors, because of the whole rate hike and high inflation. I will see that I have €5000 invested in every stock before I would even add another one to the list. There are a lot of great stocks and maybe better stocks then that I have selected to pick from but today my return (in these volatile markets) is 11%.
I will see how this play out in the coming years.
In my next post, I will give you more details about my portfolio.
Br,
TT
I didn't write to much here as I was busy with personal problems but I managed to learn how to build a dividend portfolio.
And ofc with learning it also means to make mistakes.
I always wanted to build myself a dividend portfolio but I always chose other ways to invest and I have to say, today, I 'm sad that I didn't start with it sooner.
I started last year in October with around €5000 and I put aside every month €500. So as you can read, I started 6 months ago, building my wealth. If I had more money, I would invest in other things as well (real estate for example) but for now, I'm going to update this blog on a monthly basis. Giving you insight in what I'm buying and how I'm building my portfolio.
My problem with the portfolio, was really getting started. So, one day I put aside some money and started buying some stocks. Not just any stock but really good dividend stocks. Stocks that are paying on a monthly or quarterly basis. I didn't invest in an ETF which would make it also easy as you can spread your risk very nicely but I rather own stocks. It has more risks but it's the first choice you need to make.
So, one of the mistakes I made, and I hope you learn from it, is that I started buying every month a new stock. So today I own 9 stocks in my small portfolio. It is spreading the risk but if I would start over, I would do it differently. As the more stocks you own, and only putting in €500, it's harder to grow your portfolio. Oke, the risk is lower as you are spreading it over different stocks but I do think that it's better to start with a few stocks (one or 2) and build it from there.
So what would I change?
- I would have invested the first €5000 in 1 stock. Giving me income for that one stock.
- Every €500 that I put in monthly, I would buy it in for a second stock till I also reach €5000 in value for that stock.
- After the second stock reaches €5000, I would invest in a 3rd stock, and so on...
So why would I do this? Because I'm living in Europe and I don't have the possibility to:
- Buy fractional shares
- And not be able to buy fractional shares, it's will also not allow me to do DRIP, only if I have enough dividend I can do this to DRIP in the stock.
For those that don't know DRIP (Dividend reinvestment plan). So basically you reinvest the dividend in the stock, getting more shares and more dividend. Compound this and you will earn a lot of dividends and growth over the long term.
So which stock did I buy? I told already that I have 9 stocks:
- MAIN: Main street capital
- ENG: Engbridge
- TD: Toronto Domimion Bank
- BNS: Bank of Nova Scotia
- JNJ: Johnson & Johnson
- BX: Blackstone
- NEE: NextEra Energy
- ABR: Arbor Realty Trust
- TRIN: Trinity Captical
So why did I buy these stocks?
The answer is simple. They have a great dividend yield, they grow their dividend on a yearly basis between 3% - 15%, they have a large track record of paying a dividend and the growth of (most) the stocks is nice on a yearly basis.
The best dividend stock in my opinion is a stock that doesn't grow a whole lot in value but increases their dividend every year with 5% - 10%. Some will argue this but if I want a good dividend then the lower the price of the stock is, the more shares I get the higher my dividend will be. Of course, stocks that grow their dividend every year will also grow in value as this is the basis of a nice value stock.
So for the 9 stocks i'm having today, a bit more in financials then in other sectors, because of the whole rate hike and high inflation. I will see that I have €5000 invested in every stock before I would even add another one to the list. There are a lot of great stocks and maybe better stocks then that I have selected to pick from but today my return (in these volatile markets) is 11%.
I will see how this play out in the coming years.
In my next post, I will give you more details about my portfolio.
Br,
TT
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