Saturday, July 5, 2008

* Progress Update - June 2008

It is the first Saturday of the month, so it is time for a goals/progress update. A month like June makes you appreciate being a dividend investor. While other investors are focusing on their market losses and negative total returns, I and other dividend investors are able to look at net positive metrics such as an increase in annual dividend income. That's not to imply that we escaped the losses (I didn't as I will discuss next Saturday), but the day-to-day gyrations of the market is not how we measure success. Instead, our goal is steadily build a stream of dividend income over the years. To that end, progress was made in June. Now onto the numbers.


My goals were defined in this December 1, 2007 Investing Goals post. Below is an updated version of the table found in the original post.
DescriptionDividend
Income
Annualized
Yield
on Cost
2027 Goal110,00020.00%
2017 Goal30,00010.00%
2008 Goal4,0004.90%
Dec/20073,0545.00%
Purchases YTD1,7470.22%
Div. Changes YTD500.07%
Sales YTD(120)0.06%
June/20084,7315.35%
Purchases133-0.08%
Div. Changes-32-0.04%
Sales00.00%
May/20084,6305.47%
Net Changes4240.27%
April/20084,2065.20%
Net Changes188-0.06%
March/20084,0185.26%
Net Changes4610.13%
February/20083,5575.13%
Net Changes2770.14%
January/20083,2804.99%
Net Changes226-0.01%
December/20073,0545.00%
Net Changes2280.12%
November/20072,8264.88%

For the month, dividend income increased $101, and Yield on Cost (YOC) decreased -0.11%. These changes were driven by new purchases and dividend changes (no sales in June). Let's examine each of the these categories:

Purchases: The $133 increase in annual dividend income and -0.08% decrease in YOC related to the following purchases (yield at the time of purchase):
  • $27 PEP (2.51%)
  • $52 BP (4.57%)
  • $54 VYM (3.40%)
All three purchases lowered the YOC. As noted in earlier updates, I expect YOC to drop monthly since most new investments will yield less than my current YOC, and dividend increases will not be sufficient to offset it.

Dividend Changes: The -$32 decrease in annual dividend income and -0.04% decrease in YOC related to the following dividend changes (a=dividend stated in annual terms, q=quarterly, m=monthly):
  • $6 JNJ : 0.415q>0.46q : 0.00%
  • $2 VYM : 1.65a>1.67a : 0.01%
  • ($7) VFH : 1.67a>1.56a : (0.01%)
  • ($34) VNQ : $4.05a>3.05a : (0.04%)
  • $1 VIG : 0.98a>1.00a : 0.00%
The erratic ETF dividends continue to be problematic. I have opted to convert to a trailing 12-month convention for measurement. Some of the above decreases related to my conversion, while others are true year-over-year decreases in dividends. I am making some other changes in my ETFs which I will discuss in a later post.
Sales: I did not sell any income portfolio investments in June.

The next monthly progress update will be on Saturday, August 2nd.

(Photo: sanja gjenero)

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