Wednesday, April 30, 2014


Completed my purchase of a stake in AOD, although I missed
the ex-dividend date to collect the dividend for April.  I’ll
receive my first dividend May 30th, increasing monthly cash
flow by another 4%.  AOD came to my attention as one of the
top ten holdings in two of my mutual funds.  It has a yield of
8% and pays monthly dividends, so it seemed like a good
candidate to add to my portfolio.  This brings my total number
of stocks and funds up to 21, which means at some point I’ll
have to sell one of my investments to stick with my 20 stock
plan.  For now I’m just going to hold on to all 21 investments.

I had intended to collect on gains to my stake in GE and
reinvest the cash in one of my monthly paying funds, however
I’ve decided to hang on to GE and avoid the commission costs.
So far my commission costs are way down as a percentage of
dividend income compared to last year.  I’d like to keep it that
way.  One of the goals in my annual investment plan was to
significantly reduce costs.  While increased earnings reduce
cost percentages automatically, too much trading and
reinvesting can run up costs pretty quick.  So I’m going to have
to limit these types of transactions to allow for continued cash
investments.  I’ll be making cash investments less frequently
but will increase the dollars invested.  Since the commission is
the same reguardless of the amount, larger investments made
less often will also help reduce cost percentages.

Talk continues to fly about a possible market setback.  Should
this come to fruition, I intend to view it as a buying
opportunity and add to my investments.  Part of my research
when picking investments for my current portfolio included
reviewing their past performance to see how well they fared in
2008.  All my current holdings continued to pay dividends
through the worst of the market crash, although some did
reduce payouts.  Many have since increased payouts to near
pre-2008 levels.  Should we face another disaster in the
markets like 2008, I wanted to be sure I was holding issues that
had survived the last collapse.  A large paper loss in the value
of your portfolio is much easier to swallow if you have a steady
stream of dividends rolling in each month.  I never sold any
shares during the last collapse, in fact I bought more while the
market was near its lowest levels which really paid off in the
end.  So that’s what I plan to do if faced with the situation

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