As normality emerges in various places and the vaccination rate rises, inflation and the interest rate become a talking point. We know today that there have not been any increases, but I believe they will come.
Does it mean changing my strategy? No I continue as before with one exception. When interest rates rise, money is shifted from high-growth stocks to other areas. It is what they call a cyclical process.
My portfolio was nearly 10% in non-dividend stocks, with Disney accounting for nearly 5%, and I want to reduce my exposure to millionaires. However, nothing will change in my dividend investment strategy.
I sold Amazon. It was a short trade as I just picked it up last December and sold half of Twilio. There is nothing wrong with the company. Just reducing presence and focusing on Shopify, Disney and Facebook as my non-dividend payers.
I used the funds from Amazon’s sales in my TFSA to buy Microsoft and Costco. Yes, I’ll pay a tiny 15% tax on the dividend, but I’ll make a lot of money on the stock !!! This is one case where you want to look at the forest, not the trees.
My focus is on saving for my TFSA contributions for 2021. Otherwise not a lot of activities.
I don’t sell my winners. That’s a new rule that I’m following, and in fact, I’ve expanded my winners by adding to Microsoft.
It’s one of the realizations I have that selling your winners and adding to your losers just to rebalance keeps money on the table. It’s not like a balance between stocks and fixed income.
What I want to point out is understanding the weaknesses in the Canadian stock market in order to build a strong portfolio. If you look through my portfolio you can see that my US holdings outperform my Canadian holdings. Below is the sector and industry coverage by US and Canadian stocks.
All graphics are simply put together in order to have a clear overview of my portfolio at all times. You too can build a tracker. See how to create yours, step by step.
My dividend income for May 2021 is $ 3,460. My total annual return is approximately 2.00%. It is a dividend growth portfolio for total returns and not a dividend income portfolio for retirement.
I will repeat that it is not important to balance income per month. When you retire SHOULD NOT Live on income month after month. This is just bad personal finance.
you SHOULD You must have at least 1 year of cash to pay the monthly bills and your monthly dividends reschedule your cash so that you have 1 year of cash anytime.