This page lists all of my investments that I have in my investment portfolio. I favor investing in mutual funds, index funds, and ETFs. I have three investment portfolios, a brokerage, a Traditional IRA, and a Roth IRA. I recommend investing at least 15% of your income once you have your debt paid off and have an emergency fund of 3-6 months worth of living expenses in place. What follows is the description of the goals of my accounts and the investments that are within them, and the target portfolio percentage for each investment.
Overall Investment Strategy:
I do not invest in any equities that do not pay a dividend. I’ll never own a stock that doesn’t pay a dividend nor will I own funds that invest stocks that do not pay a dividend. Since its inception, most of the S & P 500’s returns have been from dividends.
I love bonds for retirement accounts because they provide regular income and reduce the volatility of my portfolios. I like the safety of bonds, and I prefer to invest in bond funds that have a good yield. Even though some of my portfolios have no bonds in them, if you were to look at my investment portfolio as a whole, I typically do have an overall significant holding in bonds.
In my retirement accounts, I invest in equity funds that invest in companies that pay dividends. I also invest in bond funds. I reallocate my account based on where I think the best value is in the world market. These accounts will be there for me when I get older in case I fail to produce an adequate amount of wealth to produce complete financial freedom before retirement age.
In my brokerage accounts, I invest in undervalued Real Estate Investment Trusts and in undervalued dividend stocks. If one of my stocks starts trading at fair market value, I hold on to the stock and collect its dividends. If the stock becomes undervalued again, I start investing in the stock again. One of my taxable account also contains municipal bond funds.
If you want to get started in investing without commission fees, you can make an account at M1Finance.com. This is my referral link. If you sign up under the link, you will get $10 to invest if you fund your new investment account! I get $10 too, and that is pretty cool.
I chose PHIZX, a high-yield municipal bond fund, instead of lower risk municipal bond funds because I am not concerned with my principal. Its high yield is more important than the added risk involved with using high-yield bonds, and the increased risk from this type of bond is balanced out by the lower risk (in relation to the stock market as a whole) of the equity funds I have chosen. The lower volatility of the equity funds I have help balance the increased risk I take by choosing this bond fund. I also use this fund to park money when I cannot find undervalued equities that I want to invest in.
1. Prudential Muni High Income Fund Class Z (PHIZX)-100% of portfolio
Strategy: Invest in undervalued Real Estate Investment Trusts that yield a minimum of 8%. When the investment reaches fair valuation (that means that the market agrees with me on what the company is worth), I will pause buying additional shares of the company, but I will keep holding the company so that it can pay me its dividend.
This account is meant for early retirement. If I do well, I will be able to retire early. If I do not do well, I’ll have to rely on the money in my retirement accounts when I reach retirement age. This account is not meant to be diversified, although diversification may naturally occur because I have chosen to invest in different parts of the real estate market. Real Estate Investment Trusts are pass through entities that are tax efficient. I like their high yield. I am very excited about this portfolio because the yield I will be getting is similar to the typical yields of physical real estate.
This portfolio yields around 14% in dividends.
1. AGNC Investment Corp (AGNC)-50% of portfolio
2. Sunstone Hotel Investors Inc (SHO)-50% of portfolio
Strategy: Invest mostly in dividend-paying companies that are significantly undervalued and pay a dividend. If I do well, I will be able to retire early. If I do not do well, I’ll have to rely on the money in my retirement accounts when I reach retirement age. This account is not meant to be diversified, although diversification may naturally occur as I acquire more stocks over time. If one of my holdings reaches fair-market value, I will pause buying additional shares of that company (I’ll be holding on to the stocks and collecting their dividends) and start buying them again if the market undervalues them.
This portfolio currently yields around 5.7% in dividends.
1. Just Energy Group Inc. (JE)-25% of portfolio
2. Gazit Globe Ltd (GZT)-15% of portfolio
3. Norbord Inc (OSB)-10% of portfolio
4. Ford Motor Company (F)-10% of portfolio
5. Kraft Heinz Co (KHC)-15%
6. PPL Corp (PPL)-15%
7. China Mobile Ltd. (CHL)-10%
1. The Kraft Heinz Company (KHC)-15%
2. JP Morgan & Chase Co. (JPM)-15%
3. Bank of America (BAC)-10%
4. Wells Fargo & Company (WFC)-10%
5. Sinopec Shanghai Petrochemical Co. ADR (SHI)-10%
6. PPL Corpation (PPL)-10%
7. Ally Financial Inc. (ALLY)-5%
8. China Mobile Limited (CHL)-5%
9. Ford Motor Company (F)-5%
10. Gazit Global ltd. (GZT)-5%
11. Just Energy Group Inc.-5%
12. Norbord Inc. (OSB)-5%
Strategy: Invest 60% into bonds and 40% into equities. This portfolio aims to have a yield of at least 4% (not counting capital appreciation). When I reach retirement age, I will use the dividends from my equities and the interest from my bonds to fund my lifestyle. I will not have to sell any of my investment shares; therefore, this portfolio will never run out of money. This portfolio also has good potential for capital appreciation, but achieving a high and steady income is the primary goal of this portfolio.
My equity funds are SDOG, SCHD, DGRW, and SPYD. I am using two funds because SDOG is well diversified and has a very appealing yield. Not only does SDOG have a good yield, it also has a history of significant capital appreciation. SCHD shows a good history of dividend growth and it has a history of phenomenal capital appreciation for a fund that has a lower beta than the S & P 500 (many of these do not even come close to the returns of the S & P 500, but SCHD does). My second US equity is DGRW. This fund has had a high return since its inception. Its dividend payments are low, but DGRW has a good track record for increasing dividend payout (and it pays monthly, which is a nice bonus. SPYD is included in this portfolio because of its high yield and its allocation into utilities and real estate (which many of the funds in my retirement portfolio lacks).
I chose IDOG, EDOG, and MAPIX as my international equities. All of them are high in yield. IDOG gives me exposure to developed countries whereas EDOG gives me exposure to emerging markets. MAPIX is included because it has a good track record of performance. It also has significant assets in China.
I use PHYZX to help get my portfolio’s yield up. It also is slightly less volatile than my equities are. PHYZX’s yield has consistently stayed north of 5.5% and it has historically returned more than many equity funds have.
This account was funded by a traditional 401k rollover from a previous employer. I do not plan on adding any additional money to this account. When I reach retirement age, I will do a back-door rollover into my Roth IRA. This fund will grow and compound over time due to the dividends and distributions that will be reinvested into the portfolio. I have this portfolio in case I am unable to do a good job of picking stocks in my taxable accounts.
1. ALPS Sector Dividend Dogs ETF (SDOG)-10% of portfolio
2. WisdomTree U.S. Quality Dividend Growth Fund (DGRW)-5% of portfolio
3. Schwab U.S. Dividend Equity ETF (SCHD)-5% of portfolio
4. SPDR® Portfolio S&P 500 High Dividend ETF (SPYD)-10% of portfolio
5. ALPS International Sector Dividend Dogs ETF (IDOG)-2.5% of portfolio
6. Diversified Emerging Sector Dividend Dogs ETF (EDOG)-2.5% of portfolio
7. Matthews Asia Dividend Fund Investor Class (MAPIX)-5% of portfolio
8. Prudential High-Yield Fund Class Z (PHYZX)-60% of portfolio
Strategy: Invest in 40% equity funds and 60% bond funds (By the time I retire, I plan to have this account at 20% equities and 80% bonds). The goal of this portfolio is to create an average yield of 4% (not counting capital appreciation) by the time I retire.
What follows are my investments and my current target for my asset allocation. When I reach retirement age, I will start collecting the dividends paid by this account. The main purpose of this account is to cover expenses that come with getting older such as medical bills. It will also serve as a hedge in case my taxable accounts do not work out as planned (I think of it as a hedge against potential ignorance). Because I will not have to sell any of my shares in order to fund my lifestyle, this portfolio will never run out of money.
I like Kevin O’Leery’s O’Shares ETFs because they are rule based and I agree O’Leery’s philosophy when it comes to investing defensively. These funds focus on investing in companies that have a low beta (this means they go down less than the market during bad times), and they only invest in dividend-paying companies. They also are set up in a way where one company will not surpass 5% of the fund, and it does not allow for one sector to be above 20% of the fund. These rules help insure that I get consistent income and that the fund stays diversified.
I like Global X’s Superdividend funds because they pay high yields. This will help me accumulate shares in these funds rapidly. These funds are not tax efficient, but since Roths are not taxable when you reach retirement age, this doesn’t matter. Most analysts and stock market experts will warn you that high dividend yields (typically defined as north of 7%) are not sustainable; however, I examined these funds and their dividend history is consistent. Others will also argue that high dividend yield can be dangerous because it could signify the companies in the fund are in trouble. This is true, but since the Global X ETFs are rule based, any company that gets into really bad shape will fall out of the index that the funds tracked, and therefore, be removed from the fund all together.
Allocation will adjust based on where the “best deal” for investments are. For instance, right now, the emerging markets are down about 50% (the drop is similar to what we saw with the recession in 2008) so I am currently very heavy into emerging market funds. International funds have taken a significant hit too since President Trump was elected so I am also heavy into international equities as well. If the US stock market drops enough in the future, I will start investing more in US equities. By the time I reach retirement age, this portfolio will be at 60% bonds and 40% equities.
My average dividend yield in this fund is around 5%.
1. O’Shares FTSE U.S. Quality Dividend ETF (OUSA)-3% of portfolio
2. Invesco S&P 500® High Dividend Low Volatility ETF (SPHD)-3% of portfolio
3. Global X SuperDividend™ U.S. ETF (DIV)-2% of portfolio
4. O’Shares FTSE Russell Small Cap Quality Dividend ETF (OUSM)-5% of portfolio
5. Global X SuperDividend™ ETF (SDIV)-20% of portfolio
6. Global X SuperDividend® REIT ETF (SRET)-5% of portfolio
7. Global X MSCI SuperDividend® EAFE ETF (EFAS)-20% of portfolio
8. Global X MSCI SuperDividend® Emerging Markets ETF (SDEM)-20% of portfolio
9. O’Shares FTSE Europe Quality Dividend ETF (OEUR)2% of portfolio
10. Vanguard Long Term Corporate Bond ETF (VCLT)-20% of portfolio