Dividend Portfolio Sector Allocation September 2016
About once a quarter I like to take a look at my portfolio holdings and examine my overall sector allocations to see if they meet my comfort level as to how my capital is distributed. As we all know, market forces affect certain sectors at different times throughout business cycles which can often throw many portfolio balances out of sync. Not only can portfolio balances be thrown out of sync but dividend distributions can as well. Positions may grow over time because of fresh capital being added, the inevitable dividend cut may occur or recent stock sales can all affect the flow of our dividend distributions. As a dividend income portfolio matures I think it’s very important for one to see which stocks and which sectors are paying out their dividend distributions and see if the current flow matches ones investing risk tolerances. After all, these days who would want an energy heavy dividend income portfolio when potential cuts continue to loom ahead. Of course, this is all a matter of personal preference.
Below you will find my recent asset allocation for my dividend stocks which includes the new Global Industry Classification Standard for real estate stocks. I had mentioned in previous posts my desire to further level out my dividend income so as to not become too dependent on just a handful of dividend paying stocks for the majority of my passive income. This desire has caused me to stop adding to my Canadian banks in recent months in favor of current holdings in my portfolio from other sectors such as the consumer staples and health sector. Names like The Coca-Cola Company (KO), General Mills, Inc. (GIS), McDonald’s Corp. (MCD), V.F. Corporation (VFC), W.W. Grainger, Inc. (GWW) and more were added to. I even initiated two new positions this month to further diversify my dividend income stream by adding Cardinal Health, Inc. (CAH) and T. Rowe Price Group, Inc. (TROW) to my taxable account. In all, the end game remains the same for me… Continue to grow my passive income stream and make sure that no one stock or sector that I’m not comfortable with long term becomes too large and responsible for the majority of my dividend income.
I look at my portfolio diversity from a total perspective meaning that I look at my taxable, ROTH and IRA account as one. Some might question my beliefs in diversity seeing only REITs in my IRA.
Disclosure: Long KO, GIS, MCD, VFC, GWW, CAH, TROW