Saturday, June 29, 2013

Business Plan and Q1 2013 results

Around Christmas of 2012, I decided I needed a business plan.  This would include my goals, as well as my stock selection requirements, and some rules to live by.  Simply put, my plan's goal was to achieve 10% total return and 10% income increases year over year, and end up with greater than $2.5M in dividend paying businesses in 30 years.  I started 2013 with $68,437 and would contribute $400/mo, investing in a minimum of $1k increments.

My portfolio is broken into 3 pieces - dividend growth stocks, growth stocks, and speculative stocks.  The allocation split at this point in my life is 75% dividend growth names and 25% growth/speculative (spec names are limited to 5%).  The dividend companies I buy must meet certain criteria, including an S&P rating of BBB or higher, minimum yields (eg. 4% for telecoms/utilities), consecutive positive annual returns and a chowder ratio of 10% annually.  The growth portion requires P/E's less than 25, min expected growth rates, and potential to be expand growth globally.  Speculative names simply require a catalyst that could double or triple the stock in 2-3 years.  There are selling rules as well which include dividend cuts or dividend growth declines below a certain % for dividend stocks.  For growth stocks, I sell if a stock is overbought/bubbled, or my thesis doesn't play out and I cut losses.

Now lets begin with my portfolio at the start of the year.  I owned the following dividend names coming into 2013: T, BUD, CSX, CVX, MAT, MCD, MFA, PFE, PM, VOD and WMT.  I also held the following growth stocks: AAPL and ATRS, as well as spec names: ACTC, AMRN and PSTI.  

Trades for Q1 2013:
1/1   - sold 8 PSTI covered calls           - 80 premium (these expired in March)
1/23 - bought 5 AAPL shs @ 453        - cost 2275 (added to dividend growth portfolio)
2/1   - bought 1100 ATRS shs @ 3.75 - cost 4125 (added to existing holding, target 20% of portfolio)
2/12 - sold 72.5 NLY shs @ 14.95       - amt 1074 (sold to 0, dividend cut below min requirement)
2/15 - bought 400 ATRS shs @ 3.55   - cost 1430 (added to existing holding, target 20% of portfolio)
2/19 - sold 30 T shs @ 35.45                - amt 1053 (trimmed position to 4% target weight)
2/20 - bought 20 OXY shs @ 85.40     - cost 1718 (added new position to div growth portfolio)

Performance for Q1 2013:

 Total Monthly YTD Port vs. Port vs.
Month End  Value Units Port. NAV  Perf  Port. Perf SPX Mnth SPX YTD
Jan-13 70,630.65 530.50 133.14 2.61% 2.61% -2.44% -2.44%
Feb-13 72,742.97 551.91 131.80 -1.00% 1.58% -2.12% -4.64%
Mar-13 75,411.23 554.94 135.89 3.10% 4.73% -0.50% -5.32%

Port Divs Income % Inc
Yield Paid Change Inc/Dec.
0.56%  422.86  35.15 9.07%


401K     401K Total       Total
Balance     Perf. Retirement       Perf.
101,087 5.68%  171,717 4.65%
101,538 0.45%  174,281 1.49%
103,613 2.04%  179,025 2.72%


Notes:  my performance in my dividend growth names was sound, but the growth/spec piece was dragged down by AAPL being down 17% in January, as well as AMRN being dragged down because of the lack of a buyout or NCE status.

That's it for Q1.  I'll list the Q2 trades and performance in the next few days after my dividend income numbers for June are available.


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