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Saturday, February 7, 2009

* Progress Update - January 2009

Once again it is time for a goals/progress update. I am pleased to say that my annualized dividend income increased for the month, keeping alive the string of 14 consecutive months of increases dating back to December 2007 when I began tracking it. As noted in December, 2009 will be a challenge to keep the string going. January saw Pfsier (PFE) cutting its dividend. With each cut and subsequent sale, my dividend portfolio becomes stronger. In January, I continued to lower my exposure to funds that appear headed to toward a dividend cut.

My goals were defined in this December 1, 2007 Investing Goals post and updated in my 2009 Investing Goals post. I am pleased to note that both of my goals were achieved in 2008 - not may investors can say that. Below is an updated version of the table found in the original post.
Description Dividend
Income
Annualized
Yield
on Cost
2027 Goal 110,000 20.00%
2017 Goal 30,000 10.00%
2009 Goal 8,000 5.00%
December/2008 5,636 5.28%
Purchases YTD 362 0.03%
Div. Changes YTD (77) -0.07%
Sales YTD (205) -0.06%
January/2009 5,716 5.18%
Purchases 362 0.03%
Div. Changes (77) -0.07%
Sales (205) -0.06%
December/2008 5,636 5.28%
The above information covers the current month and year-to-date through the current month.

Click here for a Detailed Historical Progress Table.

For the month, annualized dividend income increased $80, and Yield on Cost (YOC) decreased -0.10%. These changes were driven by new purchases, dividend changes and sales. Let's examine each of the these categories:

Purchases: The $362 increase in annual dividend income and 0.30% increase in YOC related to the following purchases (yield at the time of purchase):
  • $46 MFC (4.56%)
  • $56 BLV (5.16%)
  • $150 ED (5.87%)
  • $49 LLY (5.15%)
  • $61 CTL (9.78%)
All except ED and CTL lowered my YOC. As noted in earlier updates, I generally expect YOC to drop each month since most new investments will yield less than my current YOC, and dividend increases will not be sufficient to offset it.

Dividend Changes: The ($77) decrease in annual dividend income and (0.07%) decrease in YOC related to the following dividend changes (a=dividend stated in annual terms, q=quarterly, m=monthly):
  • ($64) SDY $2.99a>$2.21a -0.07%
  • ($7) CNI $0.2277q>$0.18852q -0.01%
  • $1 O $0.14112m>$0.1418m 0.01%
  • $1 SYY $0.22q>$0.24q 0.01%
  • ($8) ETO $2.15a>$2.09q -0.01%
The decrease in CNI was due to currency conversion resulting from a strengthening U.S. dollar compared to the Canadian dollar. SDY and other ETFs/CEFs dividend volatility continue to concern me.

Sales: The ($108) decrease in annual dividend income and (0.06%) decrease in YOC related to the following sale:
  • ($108) : AOD : (0.06%)
  • ($97) : PFE : 0.00%
As previously discussed, I am over-allocated in AOD and ETO from a dividend income standpoint. I continue to reduce my allocation in each by selectively selling a portion of my holdings. This will position me to better withstand a dividend cut from them. PFE was sold after its January dividend cut.

That's it for this time. The next monthly progress update will be on Saturday, March 7th.

Tags: [AOD] [BLV] [CNI] [CTL] [ED] [ETO] [LLY] [MFC] [O] [PFE] [SDY] [SYY]

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