One Piece At A Time | Week Ended 1/10/2020
My investment strategy has changed a bit now my that my brokerage firm, as well as most others out there, have moved to ZERO commissions. I had typically tried to purchase in dollar amounts that put commissions at 1.0% or less. I've always wanted to implement, at least partially, the dollar cost average method but commissions prohibited me from pursing that. However, now it's very feasible and reasonable to do so.
My focus has always been on quality businesses, but the problem was typically buying shares at good valuations, often I had to settle for good enough. The longer that I've been investing, the more that I've come to realize just how powerful hitching your investment wagon to great companies can be. That's why I've shifted my focus to dollar cost averaging to build up my positions; because the larger your purchases the more attention that needs to be paid to valuation and vise versa.
I'd still prefer to do larger scale purchases, but the problem is that quality businesses don't often trade at good valuations. In general valuations aren't exactly cheap; so I'll just keep building up my stakes in great businesses.
In total I invested $778.58 and boosted my forward dividends by $9.38. That's an average yield of 1.20% across all of the purchases.
For my FI Portfolio I made 3 purchases at an average yield of 1.43%. The two purchases in my Rollover IRA were made at an average yield of 0.99%.
All of the purchases last week, except for Cisco, fall into the low yield/high growth camp. I'd love to add more that are in the "sweet spot" which is somewhere around 2.5-4% current yield with 4-9% annual growth, but I'm seeing better options in higher growth segments.
I fully expect Ross Stores, Stryker, Ecolab and L3Harris to all provide 10%+ annual dividend growth over the longer term. All 4 of them have solid growth prospects for the underlying businesses and low payout ratios.
My FI Portfolio's forward 12-month dividends increased to $7,846.77 with my FolioFirst dividends at $101.17 My Roth IRA's forward dividends remain at $650.65 while my Rollover IRA's dividends are $2,367.93. My taxable accounts can expect to produce $7,947.94 over the next year with all accounts providing $10,966.52.
Are you doing more dollar cost averaging now that most every brokerage firm is at $0 commissions? What do you think of my purchases from last week?