Saturday, July 11, 2009

* Progress Update - June 2009

Once again it is time for a goals/progress update. I am pleased to report that annualized dividend income rose in June, extending the streak to 4 months after February's decline. Since I began publicly tracking annualized dividend income in November 2007, it has increased in 18 of the last 19 months.

My goals were defined in this December 1, 2007 Investing Goals post and updated in my 2009 Investing Goals post. Below is an updated version of the table found in the original post.
Description Dividend
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 1,952 -0.05%
Div. Changes YTD (371) -0.32%
Sales YTD (1,283) -0.03%
June/2009 5,934 4.88%
Purchases 224 -0.04%
Div. Changes (44) -0.03%
Sales (66) 0.08%
April/2008 5,820 4.87%
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 $114, and Yield on Cost (YOC) increased 0.01%. These changes were a net of new purchases, dividend changes and sales. Let's examine each of the these categories:

Purchases: The $224 increase in annual dividend income and (0.10%) decrease in YOC related to the following purchases (yield at the time of purchase):
  • $59 Johnson & Johnson (JNJ) 3.50%
  • $72 Pepsico, Inc. (PEP) 3.39%
  • $93 iShares Investment Grade Corp. Bond (LQD) 5.77%
All the purchases, except LQD, 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 $44 decrease in annual dividend income and (0.03%) decrease in YOC related to the following dividend changes (a=dividend stated in annual terms, q=quarterly, m=monthly):
  • $3 Johnson & Johnson (JNJ) $0.46q>$0.49q 0.00%
  • $3 Pepsico, Inc. (PEP) $0.425q>$0.45q 0.01%
  • ($18) Eaton Vance Tax-Advantaged Global Dividend Opportunities Fund (ETO) $1.84m>$1.78m -0.01%
  • ($4) Vanguard Dividend Appreciation ETF (VIG) $1.08a>$1.03a 0.00%
  • ($20) Vanguard REIT Index ETF (VNQ) $2.98a>$2.67a -0.02%
  • ($8) Vanguard High Dividend Yield Indx ETF (VYM) $1.38a>$1.29a -0.01%
Sales: The ($66) decrease in annual dividend income and 0.08% increase in YOC related to the following sale:
  • ($66) Vanguard Financials ETF (VFH) 0.08%
Looking at the Dividend Changes section above, it is easy to see why holding ETFs/CEFs in my income portfolio does not align with the portfolio's goal of consistently growing income - 2 individual stocks increased dividends, while 4 ETFs decreased. In June I continued the process of trimming back my ETFs/CEFs income holdings with the sale of VFH. I will continue to reduce my holdings in this area each month.

Based on year-to-date results, I believe my revised estimate of $6,300 of annualized dividend income on December 31, 2009 is still obtainable.

That's it for this time. The next monthly progress update will be on Saturday, August 8th.