Saturday, September 4, 2010

* Progress Update - August 2010

Once again it is time for a goals/progress update. I am pleased to report that annualized dividend income increased in August, extending the streak to 2 consecutive months of increases after June 2010's decline. Since I began publicly tracking annualized dividend income in November 2007, it has increased in 31 of the last 33 months.
My goals were defined in this December 1, 2007 Investing Goals post and updated in my 2010 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%
2010 Goal 9,500 5.00%
December/2009 7,274 4.84%
Purchases YTD 2,705 -0.19%
Div. Changes YTD -104 -0.06%
Sales YTD -240 0.03%
August/2010 9,635 4.62%
Purchases 399 -0.02%
Div. Changes -4 -0.03%
Sales -65 0.04%
July/2010 9,305 4.63%

The above information covers the current month and year-to-date through the current month.

For the month, annualized dividend income increased $330, and Yield on Cost (YOC) decreased 0.01%. This month's changes were a net of new purchases and dividend changes (no sales for the month). Let's examine each of the these categories:

Purchases: The $399 increase in annual dividend income and 0.02% decrease in YOC related to the following purchases (yield at the time of purchase):

  • $79 McDonald's Corp. (MCD) 3.12% [Analysis]
  • $81 General Dynamics Corp. (GD) 2.64% [Analysis]
  • $90 Automatic Data Processing, Inc. (ADP) 3.37% [Analysis]
  • $149 iShares S&P U.S. Preferred Stock Index (PFF) 5.67%
Only PFF increased my YOC, while three securities lowered it. 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 $4 decrease in annual dividend income and the 0.03% decrease in YOC related to the following dividend changes (a=dividend stated in annual terms, q=quarterly, m=monthly):

  • ($4) Invest Grade Corp Bond (LQD) $5.53a>$5.48a
  • $1 Long-Term Bond ETF (BLV) $3.94a>$3.95a
  • ($2) Intermediate-Term Bond ETF (BIV) $3.41a>$3.39a
  • ($3) Emerging Markets Sovereign Debt (PCY) $1.65a>$1.64a
  • $4 Clorox Corporation (CLX) $0.50q>$0.55q
Sales: The $65 decrease in annual dividend income and the 0.04% increase in YOC related to the following sales:
  • ($65) AFLAC Inc. (AFL)
This month I exceeded my 2010 goal of $9,500 in annualized dividend income. With four months to go, I am confident of achieving $10,000 in annualized dividend income by December 31, 2010, assuming minimal dividend cuts.

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

(Photo: sanja gjenero)

Tags: [ADP] [AFL] [BIV] [BLV] [CLX] [GD] [LQD] [MCD] [PCY] [PFF]