Every few months 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. In the last year or so we have witnessed the halving of crude oil prices as it knocked down all energy related companies and as a result it seemed every dividend income investor was buying an oil major, oil driller or oil services company. With attractive valuations and higher yields being offered many dividend growth portfolios began to skew heavily towards energy related stocks. Too often I read among the other dividend blogs how heavily skewed their portfolio weights are towards energy. More recently, we have seen the cyclical industrial names take a severe beating as Caterpillar Inc. (CAT), Emerson Electric Co. (EMR) and all rails like Union Pacific Corporation (UNP), Norfolk Southern Corporation (NSC) and the like join in the rout. Sure, it’s hard to ignore the much better price, value and yield these dividend stalwarts are offering but one has to be aware that their portfolios do not become too heavily weighted in one or two sectors. Of course, this is a very personal matter as investing is very individualistic as we each have our own investment and risk tolerances which is evident in our slightly different portfolio holdings.

This is why it’s vital to assess your holdings from time to time, if nothing else, to simply decide if your allocations are meeting your needs and comfort level. After all I’m a big proponent of ‘sleeping well at night’ which is why I perform these informal audits of my portfolio holdings. I like to do this every few months or so as my own buying biases have no doubt affected my sector allocations. After all, most of you already know that in about one year I went from having zero exposure to Canadian banks to a “significant” exposure to the sector as I have been slowly adding to my The Toronto-Dominion Bank (TD), The Bank of Nova Scotia (BNS) and Royal Bank of Canada (RY).

In general, without seeking to achieve a specific percentage goal in mind, I plan to make consumer staples my largest sector overall among my three portfolios as a whole. Industrial and health stocks should follow with finance next. I don’t plan to ever hold any tech names in my portfolio nor energy. If I ever pull the trigger on those sectors, it will constitute a small portion of my overall portfolio holdings.

Below you will find my asset allocation for my dividend stocks. A notable change can be seen in my financial allocation in my ROTH account jumping from 36.89% in May, 2015 to 44.52% today. Of course, as I mentioned above, this jump occurred as a result of my monthly buying, since last summer, of three large Canadian banks, TD, BNS and RY. At the time I was looking for additional financial exposure as my only holding was WFC. Mission accomplished. I still may be adding to my Canadian banks going forward but not as aggressively as in months past especially since other names in the industrial sector are looking more enticing. I am still looking to increase my health exposure via my REIT holdings in my IRA as well as other names already in my portfolio such as JNJ, ABT, BDX, BCR among others.

Brokerage Account

ROTH Account

IRA Account

How are your stocks allocated? What is your largest sector holding(s) and how do you feel about having a relatively high overweight sector in your portfolio? Please let me know below.