Wednesday, April 23, 2014


I’ve found one of the problems with sticking to any investment
plan is to avoid distractions.  In my case, I’m always coming
across stocks I think would be great investments and am
tempted to take positions in some of these stocks, but it doesn’t
fit with my current plan.

My plan was to pick 20 dividend paying investments, with a
mix of individual stocks and mutual funds, some quarterly
payers and some monthly payers.  This part of the plan I’ve
completed.  Now I’m in the phase where I’m increasing shares
in each of my holdings through additional cash investments
and re-invested dividends.  The only reason for me to open a
position in a stock not included in my current portfolio would
be if I decided to sell one of my current holdings.  This could
happen if future dividends were endangered for some reason
or if the stock or fund begins what I judge to be an unrelenting
decline for whatever reason.  Then I would sell the shares and
look for a replacement.

My current strategy has been working extremely well, so it’s
not the time to stray from the plan.  While it’s good to be
flexible in investing, if you don’t have a plan, you just end up
spinning your wheels, becoming a trader instead of an investor.
While being a trader is not bad, unless you’re very good at it,
you’re not likely to make much money.  I prefer those dividend
payments rolling in every month over trying to figure out the
next big gain in stocks.  That’s what my plan is all about and
I’ve rededicated myself to stick with the plan.

All that being said, I realized I could boost returns by opening
a position in AOD which increases monthly cash flow by 4%,
beating my 20% goal for the second quarter.  To stick to the
plan and keep my holdings at 20, I’ve decided to sell GE and
re-invest the proceeds in PSEC.  I’m currently sitting on a nice
capital gain from GE which is held in my IRA account, so
selling the shares and re-investing in PSEC, which I also hold
in my IRA account, will not create an immediate taxable event.
I’ll collect the unrealized gains from GE and boost monthly
dividend income an additional 7% per month.  Since 2 of my
mutual funds have GE stock as part of their top ten holdings,
I’ll continue to benefit from future growth in what I believe to
be a great company.  I’ll reduce redundancy in investments,
collect on unrealized gains and boost dividend income.  With
other moves I’ve made in March and April, I’ve boosted
dividend income nearly 30% during the second quarter and I
still have the month of May to go!  May just cool my heals until
June and work on strategies to meet my goal of increasing
income by 20% in the third quarter.  I’ve got a feeling the
market will slow during the summer and may present some
good buying opportunities, so it could be to my advantage to
hold back until then.  It’s all about sticking with the plan.

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