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My Dividend Stock Portfolio Overview:
The past four months have been quite the rollercoaster! It’s been a while since my last dividend stock portfolio update, so I thought now would be a perfect time to celebrate my earnings.
At the beginning of the year, I embarked on extensive research to decide which stocks to buy. Ultimately, I settled on a combination of companies from the Dogs of the Dow and the Dividend Aristocrats. These choices were based on their status as large companies with high dividend yields and strong earning potential.
Once I made my decision, I went ahead and made my purchases. Boy, did it pay off! Since the start of the year, the Dow Jones Industrial Average has soared by an impressive 12.5%, hitting record highs.
Luckily, my stock selections followed suit and grew significantly. Here’s a snapshot of my dividend stock portfolio since my major purchase in February:
My year-to-date return has been phenomenal. The biggest winner in my portfolio was Verizon Communications (VZ), which saw an increase of over 19%. While the 508% dividend payout ratio initially seemed extraordinary, it actually reflects the company’s strong confidence in this year’s earnings.
I aim to keep this momentum going by adding more stocks to my portfolio each year. My primary income source for buying more stocks, as outlined in my cash flow breakdown, comes from dividends.
Having a substantial portfolio of dividend-paying stocks is crucial to my early retirement plan. Rather than keeping all our money in tax-sheltered accounts like a 401k or IRA, which we can’t touch until age 59-1/2, we’re focusing on building up a taxable account of dividend stocks. This way, the money is readily accessible. Although I use Fidelity, there are many other great options available. Discount brokers are an excellent choice, especially with my strategy of making one large purchase per year.
In an ideal world, we’d grow our principal amount so much that we could live off the dividend payments alone. However, this might not be entirely feasible. We may need to supplement our income by also drawing on a small percentage of our principal until we can access our tax-sheltered retirement accounts.
