My DIVIDEND PORTFOLIO Stock Allocation Strategy (Investing For Dividends)

so. I personally own 36 stocks in my dividend stock portfolio and I’ve been investing for over 20 years I invest for dividends and cashflow and my youtube channel is doing really well I’m getting a lot of subscribers and. I get a lot of questions that are coming my way asking me hey Ian can you share with all of us a little bit more about your portfolio you’ve talked in the past how you set your portfolio up with core positions medium positions and small positions can you talk a little bit about that strategy and how it applies to your portfolio how many of the core positions do you own how many medium how many small how do you divvy up your asset allocation in your dividend stock portfolio well what you see right here that is my stock portfolio I just crunched a bunch of numbers in Excel and I want to share with all of you a little bit more about my personal dividend stock portfolio in today’s article hey everyone welcome this is Ian Lowe puck from PPC Ian calm I am so happy to have you here on my channel this channel is all about investing for passive income in cash flow so that all of us can earn money while we sleep. Now I spent a lot of time before today’s article running some numbers in Excel I got all of my information into Excel wanting to run some pivot tables I started classifying stocks whether their core medium or small and I want to share those statistics with you today I want to share a little bit more about my personal strategy my personal dividend stock portfolio before we get into that I just want to start with some definitions so whenever I buy a stock whenever I have the intention of buying a stock in my personal portfolio I like to think of it is it a core position is it a medium or small position and not only is it going to be core medium or small in the short run. But how do I envision it in the long run is it going to be a core position is it going to be just fundamental to my success in the long run is it going to be a medium-size position it plays a nice supporting role it’s a important position. But it’s not quite core or is it going to be a small ancillary position I want to own a piece of that company I want to be in that company. But I never envisioned it being medium or core that’s how I like to think about things and I like to think about things at a high level as each stock in my portfolio playing a unique role each stock is a member of the team I don’t like to have too many team members that’s why I only have 36 positions and I don’t have the intention of adding too many more positions. Because it’s going to dilute my focus I am very very interested in keeping a focused portfolio where each position on the team can play a major role and when I’m thinking about things at a high level core medium or small I also think in terms of risk reward sometimes there are companies that I want to own in the portfolio. Maybe they carry a little bit more risk or at least perceived risk based on my analysis and therefore they make it into the medium or smaller bucket and so it’s not only a function of hey I want this to be a small position just. Because I don’t see it as a core position. But sometimes it’s just a function of hey it’s smaller medium. Because it carries a little bit more risk so let’s jump right into the numbers I own 36 positions and when you divvy them up by bucket core positions I have 12 stocks medium I have 15 and small I have nine and. So you can see that right here twelve core stocks 15 medium stocks and then nine small stocks and again this medium core small it’s not only based on current asset allocation. But also on future it’s more actually weighted towards future how I bucket eyes my stocks. Because sometimes for example something may be small it may run up a lot and in dollar terms it might be the same weighting as a medium position. But I left it in the small bucket. Because it’s my perception of what this stock should play what role it should play in the long term. Now what I did next is I started running some pivot tables in Excel and I started looking hey let’s look at the dollars when I look at the dollars and I look at core stocks how much of the total as a percentage do they represent my course represent 55% of my portfolio. So you see that here just over half 55% are in those 12 course stocks in terms of medium stocks it’s 33 percent. So you see it right here 33 percent in medium stocks and then small is just 12% and. So you can quickly see how for me it’s a game of focus I like to focus and I have gone all-in on my core positions and. In fact, you already know two of my core positions if you’ve been watching my articles on PPC and two of them are Proctor and Gamble and kimberly-clark I’ll link in the description below to some articles I’ve done on those articles. But both of those are in here in the core bucket. I mean in my opinion I could I would be happy to see this grow even bigger I would have no problem if core represented 60 up to maybe even 70% of my portfolio. Because I am all about focus I’m all about focusing on the stocks that I like them host and. So I was very happy though just to run this calculation to see this mix. Because I feel good about this mix and I guess this is a takeaway from today’s article if you have a stock portfolio or you’re building a portfolio just running this type of analysis from time to time it can help be a sanity check it can help be a nice exercise just to see hey are things as you would expect do things check up properly when I see a chart like this it totally checks up properly I’m really happy that the representation in terms of count in terms of number of stocks is reasonably similar so 12 versus 15 verses 9 they’re all in similar ranges. So I feel good about that it’s not like core is 20 stocks and then I have one medium one small that would be kind of weird. So I feel good that it’s kind of even in terms of the count and then obviously in terms of dollar allocation I would weight it heavier on corn and then medium and then less on small and. So I was happy to see the 55% the 33 and the 12 so just seeing this in front of me I hadn’t run this analysis for a long time was a very helpful checkup so next one thing not represented here that’s very interesting is I took these percentages so core represents 55% of my stock portfolio valley medium 33 small 12 I took these percentages and then I divided by the number of stocks in each bucket the average course stock that I own on average is four point five nine percent so each course stock each of those twelve stocks on average in the core bucket are worth four point five nine percent of the total portfolio value total portfolio dollar value again this is a sanity check I felt pretty good about that that’s a good amount to have in any one stock it’s not too high in my opinion not too low it’s a sizable amount it allows me to focus I felt good about that the average amount of money I have in a medium stock is two point two one percent so an average of the medium holdings each represent two point two one percent of the total and again that’s in this this part of the bucket or part of the pie right here on the small side each stock on average is one point three two percent of the portfolio and. So I felt good about this if you’ve been watching my articles for a while one thing you might have picked up is I really don’t like a messy portfolio I really don’t like small ancillary positions or even medium positions that play a non-existent role on the team each stock in the portfolio has to carry its weight and in my opinion if a stock on average like if my average small stock for example was below one percent and maybe even down like by half a percent these stocks would just have no meaning in the portfolio. So I feel good that each small stock on average is one point three two percent so they have a meaningful piece of the pie each medium one is to point to one that’s reasonable it’s pretty good for a medium stock maybe it would be nice to see it skew a little higher. But that being said it’s. Okay, given that I own 36 stocks overall I think it’s going to at a certain point be impossible to skew it up even even further than it is. Because it would come at the detriment of either core or small. So I feel good about that and then core coming in at four point five nine percent on average allocated to each core stock I feel good about that here’s where things get even more interesting next what I did miss I just looked at all the stocks let’s look at my top three core stocks course stock number one represents eight point one three percent of my portfolio I like that I like taking big bets on the companies that I love the most. In fact, this stock I would be happy if it represented 20 percent of my portfolio quite frankly I’d have no problem with that and it’s one that’s an evergreen stock I’d like to add to pretty consistently and so anyways 8.13 is number one number two it represents six point seven four percent of the portfolio stock number three represents five point six one. So you can see how even within the core bucket it’s interesting that I have prioritized different stocks in the bucket differently based on perceived upside perceived cash flow in the future and perception of being able to raise the dividends keep the dividend strong weather ups and downs of the economy weather cycles of disruption that may come our way that’s how I like to wait stocks and I feel good that my number one stock I’m taking a stance I’m going in at eight point one three percent and looking at the the bottom three stocks let’s look in the small bucket. Now at the stocks number 34 35 and 36 stock number 34 is one point zero five percent of my total thirty five point nine nine percent number thirty six point nine two I felt good about this even the smallest position in my portfolio represents 0.92 percent of the portfolio almost almost a whole one percentage point and so again based on these checks I don’t have stocks in the portfolio that are just wasting space that are not playing an important role that are not holding their own and. So I felt good about understanding that my small stocks on average each one weighs 0.92 percent or more and on average one point three two percent each one thing that I want to point out here. I get questions on my youtube channel why don’t I just go with a mutual fund why don’t I just go with the professionals one of the is that professional money managers face is they cannot do this in many cases having 36 stocks is to focus certainly having 8.13 percent in a single stock in my number one core stock in many cases the bylaws of just institutional management the rules and regulations the investment prospectus it just does not allow this the financial institutions they just can’t do what I’m doing here from the standpoint that it is quote-unquote not necessarily fiscally responsible I can sleep very well at night I know exactly what I’m doing I’m doing everything very intentionally and I feel like I’m definitely not taking on undue risk I’m investing for cash flow I buy stocks I never intend to sell them the stocks that I own raise their dividends year over year and they have a track record of doing so. So I sleep really well at night. But it just so happens at the financial institutions this type of strategy it’s just so counterintuitive it is so outside the norm. I mean even I imagine when when you’re at work talking to peers or certainly when I’m talking to my peers water-cooler talk at work people don’t on average understand this strategy it doesn’t make sense to them it is so different than the norm out there in the financial industry. But anyways my point is that by taking this strategy by very much taking these calculated measures to construct a world-class dividend portfolio where each stock plays its own role I don’t have too many stocks they have a history of raising the dividends they have a very solid financials their world-class brands that have been around forever will continue to be around and they’re companies that love to reward their shareholders I have found a strategy that tends to beat the S&P 500 it tends to do very well. But that being said the goal here on my youtube channel is not necessarily to beat the S&P 500 going forward maybe I don’t maybe it fails every time the fact of the matter is is Mike portfolio is constructed to drive cash flow. Because one day I will have the opportunity to take a early retirement to live the life of financial freedom and this is the dividend stock portfolio that will power that so first and foremost I’m always focused on ways to drive cash flow to drive passive income in each stock in the portfolio pays a dividend pays an increasing stream of dividends in most cases and will contribute towards my financial freedom one thing I want to add today at the end of the article this is actually response to a recent comment that I got I thought this was a really good comment the cost of living in modern society especially in the United States it’s very expensive and a lot of people who are just getting started out with David and investing or asking like hey there’s almost this elephant in the room is it even possible to fully achieve financial freedom well I kind of look at this two ways my lifestyle is kind of expensive I have a family to support we live in the Greater San Francisco Bay Area the cost of living is really high and so the way I approach this is full financial freedom is a very noble and amazing goal. But the fact of the matter is it’s not an either/or it’s a continuum and what I love about dividend investing in building these portfolios like this is the fact that one can achieve partial financial freedom for example what if one works really hard on their portfolio and eventually it ends up replicating half of their income. But what this means is the person. Now has a lot of flexibility. Maybe they can take a different job that is less stressful and work less hours maybe it’s a part-time job maybe one can just keep their job and sleep better at night knowing hey if they got nigut laid off or something happens they’ve got half their paycheck covered and even if it takes a while to find a new job they’re going to be good or even if they find a new job that pays less money they’re going to be really good and so it’s really a continuum in my opinion and. So I I can’t speak for any one situation other than my own. But I know achieving full financial freedom it will it will happen one day. Because that’s my goal and when I set my goal to it myself towards a goal I’m going to achieve it it will take some time and. But the fact of the matter is is I don’t look at it you’re either or for me even right. Now during the journey it’s really exciting. Because I kind of look at it this way each month of living expenses I can earn passively through passive income is a step in the right direction and it’s this fluid continuum towards full financial freedom in the day honestly that one gets starred in dividend growth investing they’re already chipping away towards partial financial freedom in partial financial freedom maybe it’s only twenty five percent of one salary if one can earn passively through dividend stocks twenty five percent of one salary it gives some flexibility in life it frees up some of that stress it frees up some of that concern it lets someone have more options more options ahead of them than when they’re 100 percent dependent on active income which is income that one earns through salaries are consulting through paychecks and replicates it with some passive income through dividend investing so thank you for that question this was a fun article I really have been receiving this question a lot I know I talk about my my core positions my medium my small positions I talk about them a lot I’m in receiving these questions Ian how have you structured all of us. Now you guys know thank you for that question whoever asked that one or the multiple people that asked that one that was a good one before I leave today just a heads up I’m. Now on Instagram if you want to connect with me on instagram i’m literally checking that on my phone throughout the day you want a quick response you want to engage with me pretty quickly that’s a great way to reach me i’m going to link to it in the description below also i want to let. You know. that i truly appreciate all the comments hear the comments drive the articles and. So if you want something covered in a future PP cen article please go ahead and ask it in the comments below or on instagram and also if you want to thank me for this article and for the other articles on my channel please please subscribe to my channel i would greatly appreciate that and one thing i learned recently is when one subscribes there’s this little bell next to the subscription button try to check that as well. Because that will make sure that you are always updated when a new article comes out when you just subscribe may not get the reminder every time. But when you check the bell the reminder goes out every time that a new dividend investing article is published before I leave today in terms of full disclosure I own Procter Gamble kimberly-clark in my personal stock portfolio I also own southern corporation and Realty income and so the ticker symbols on these are PG k mb s o o Procter Gamble and kimberly-clark they’re to my core stocks Southern Company and Realty income they’re two of my medium stocks and. So I own those stocks in my portfolio I’m long on them also in terms of a friendly disclaimer I am NOT a licensed investment advisor and today’s article is not investment advice this article is just for your fun and entertainment if you are going to go out and invest in the stock market or anywhere else please consult a licensed financial adviser first thank you so much for watching I’m wishing you all of the success in the world and your investing in other endeavors out there and I will see you in the next article.

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