Saturday, September 12, 2009

* Progress Update - August 2009

Once again it is time for a goals/progress update. I am pleased to report that annualized dividend income rose in August, extending the streak to 6 months after February's decline. Since I began publicly tracking annualized dividend income in November 2007, it has increased in 20 of the last 21 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 2,844 -0.13%
Div. Changes YTD (417) -0.36%
Sales YTD (1,651) 0.22%
August/2009 6,412 5.01%
Purchases 542 -0.06%
Div. Changes (15) -0.01%
Sales (252) 0.15%
July/2008 6,137 4.93%
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 $275, and Yield on Cost (YOC) increased 0.08%. This month's changes were a net of new purchases, dividend changes and sales. Let's examine each of the these categories:

Purchases: The $542 increase in annual dividend income and (0.06%) decrease in YOC related to the following purchases (yield at the time of purchase):
  • $112 Genuine Parts Co. (GPC) 4.42%
  • $53 Automatic Data Processing Inc. (ADP) 3.48%
  • $133 iShares iBoxx $ Invest Grade Corp Bond (LQD) 5.57%
  • $105 Vanguard Intermediate-Term Bond ETF (BIV) 4.41%
  • $139 Vanguard Intermediate-Term Bond ETF (BIV) 4.38%
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 $15 decrease in annual dividend income and (0.01%) decrease in YOC related to the following dividend changes (a=dividend stated in annual terms, q=quarterly, m=monthly):
  • $3 Clorox Co. (CLX) $0.46q>$0.50q 0.00%
  • ($18) Eaton Vance Tax-Advantaged Global Dividend Opportunities Fund (ETO) $1.71m>$1.65m -0.01%
Sales: The ($252) decrease in annual dividend income and 0.15% increase in YOC related to the following sale:
  • ($66) Vanguard Dividend Appreciation ETF (VIG) 0.09%
  • ($76) Manulife Financial Corporation (MFC) 0.02%
  • ($110) Royal Bank of Canada (RY) 0.04%
In August I continued the process of trimming back my ETFs/CEFs income holdings with the sale of VIG. I will continue to reduce my holdings in this area each month. MFC cut is dividend in August, so I immediately liquidated my position. Also during August, RY announced another C$0.50/share dividend. This ensures that 2009 will be flat with 2008. As such, I just sold my entire position in RY. Ironically, this is one of the few sells resulting from a flat/cut dividend that I recognized a gain on.

Based on year-to-date results, I am going to raise my revised estimate of annualized dividend income on December 31, 2009 to $6,700 from $6,500.

That's it for this time. The next monthly progress update will be early October.

(Photo: sanja gjenero)