Disclaimer: I am not a finance professional and all materials below are for informational purposes only. I do not endorse any of these companies and you need to do your own research before investing in any stocks.
I’m a buy and hold investor. I am too slow to react to the market news and by the time I decide to sell, I’m usually too late. This approach may not be optimal when the market dropped 8%, but it’s the strategy that I can stick with. Buy and hold works well for me when the stock market goes on a roller coaster ride like it has been doing lately. I knew I could ride it out and didn’t give myself an ulcer. Since I can’t sell at the right time, I will buy when the market is down and average out my price per shares.
I am also slowly moving most of our stock market investments toward dividend stocks. This is going to take a while, but I think now is a great time to pick up some dividend stocks for a great price. We liquidated some investments earlier this year and have been hoarding cash for the 4 plex down payment. The short sale is taking so long that we have extra cash left to buy some stocks.
I picked up a few shares of LLY. The yield is very good and the PE is quite a bit lower than their competitors.
Here are the stocks in my dividend portfolio
|Eli Lilly & Co.||Pharma.||5.60%|
My goal is to build up our dividend income to about $6,000/year to help with my early retirement. $500/month doesn’t sound like a lot of money, but I think it will make a big difference. I’ll probably try to stick with less than 10 stocks/funds because I can’t keep track of the investments if I own more than that. To increase yield, I’ll try writing covered call options soon. For this to be effective, I need to build up some volume first so the transaction fee won’t be a big % of the profit.
This portfolio currently yields about $1,900/year. We’ll have to add quite a bit more dividend stocks to increase the yield to $6,000/year. I think we’ll need to add some utilities, energy, and REIT.
What do you think we should add to the dividend portfolio next? I also like Pfizer and might pick up a few shares if the market drops further.
Disclaimer: This is not a recommendation. My stock picking track record isn’t great so you need to do your own research. This post will help us keep track of the gains and dividends to see if they meet my passive income goal. If you need help with financial planning, consider signing up with Personal Capital. Personal Capital will help you keep track of all your investments in one place and can hook you up with a personal financial adviser as well.
Disclosure: If you sign up with Personal Capital, we may receive a referral fee depending on the size of your portfolio.
Passive income is the key to early retirement. This year, Joe is increasing his investment in real estate with CrowdStreet. He can invest in projects across the U.S. and diversify his real estate portfolio. There are many interesting projects available so sign up and check them out.
Joe also highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help DIY investors analyze their portfolio and plan for retirement.