Saturday, December 31, 2011

2012 Investing Goals

My goals were originally defined in this December 1, 2007 Investing Goals post and last updated in my 2011 Investing Goals. Like last year, I will greatly exceed my 2011 goal of $15,500 in annualized dividend income. Looking at my long-rang goals, I am still on track to reach my 2017 goal of $30,000 and based on my latest model, I could reach it as early as 2014. The 2027 goal of $110,000 is not as clear. Given the increased prices and lower yields of new investments, my model continues to indicate this will be difficult to make.

After the turbulent years during the financial crisis, 2011 was a relatively smooth ride. During the year we experience several dramatic declines, which is always exciting to a value oriented long-term investor. My dividend growth portfolio's 2011 risk rating will end lower than 2010's 1.66 rating.

Looking to 2012, I don't see it much differently than 2011. Hopefully, we will have a few deep corrections in 2012. I always welcome a correction as a buying opportunity. 2011 had fewer dividend cuts, I anticipate a similar level in 2012. I also suspect 2012 will see fewer companies failing to raise their dividends (dividend freezes). 2011 will be the first year that dividend increases exceed dividend cuts since I began publicly tracking my investments.

I will no longer provide goals for Yield-On-Cost (YOC). It is nearly impossible to project and often runs counter to my primary goal of an ever-increasing stream of dividend income. With that as a backdrop here are my updated goals going into 2012:

Description Dividend
on Cost
2027 Goal 110,000 n/a
2017 Goal 30,000 n/a
2012 Goal 20,500 n/a

I left the income goals for 2027 and 2017 goals unchanged. I am setting my 2012 annualized dividend income goal at $20,500. To achieve this goal, I anticipate more robust dividend growth in 2012 than what we experienced in 2012.

I am confident that I will finish 2012 with higher annualized dividend income than where 2011 ended. In addition, I feel good that my string of sequential months of higher annualized dividend income will continue through 2012.

If it were easy, everyone would do it and success wouldn't be nearly as satisfying. Here's to a prosperous 2012!

(Photo: sanja gjenero)