My Dividend Growth Portfolio January Update

by Evan

I have been dreading writing this post since I already know I screwed up in December.  I gave myself very specific rules when it comes to selling short puts and I think my head got a little too big after a ridiculous month in November when it comes to investment income.

My December 2016 Investment Activity

My Undervalued Dividend Growth Stock Purchases

December, like most months, I made my normal $500 purchase plus my option income for the previous month($506):

  • On 12/6/2016 I bought 15 Shares of Aflac (AFL) at $68.75 ($1,038.32 purchase).

This added to the 10 shares I already owned.

I also was assigned 100 shares of Smith and Wesson (was SWHC and now is AOBC) and Urban Outfitters (URBN).  I will attempt to sell covered calls on these positions until they are called away.

My Investment Income

  • I received $96.65 in dividend income (automatically reinvested); and
  • I lost an awful $85.44 

I went from an awesome $500 month to -$85? That is frustrating, and completely my fault.

Some mistakes that I made:

  • I ignored my rule about spreading out the leverage.  I had multiple contracts on SWHC (AOBC), URBN, UAA – when in reality they should have  been spread out.
  • I ignored my rule going out too far.  The farther I go out the less I get the benefit of time decay – I have to keep it under 45 days.
  • I created an alternative closing schedule that I think is premature.  Most of my money is made from the velocity of my trades I will revisit the non-50% exit strategy when the account is bigger

My Current Holdings & Ratios

CompanyTickerSharesPriceValueCost BasisCurrent Dividend PayoutCurrent Expected Annual IncomeYield on Cost
CATERPILLAR INCCAT22.385$93.04$2,082.70$75.48$3.08$68.954.08%
Community Trust BankcorpCTBI32.132$48.55$1,560.01$38.33$1.28$41.133.34%
Emerson ElectricEMR26.461$56.40$1,492.40$48.49$1.92$50.813.96%
CULLEN FROST BANKERS INCCFR10.141$87.77$890.08$65.36$2.16$21.903.30%
Franklin ResourcesBEN22.116$40.75$901.23$34.53$0.80$17.692.32%
Old RepublicORI35.351$19.16$677.33$18.41$0.76$26.874.13%
SONOCO PRODS COSON22.31$54.00$1,204.74$36.91$1.48$33.024.01%
PRICE T ROWE GROUPTROW35.496$75.62$2,684.21$69.18$2.16$76.673.12%
TARGET CORPTGT28.461$71.44$2,033.25$71.18$2.40$68.313.37%
UNITED TECHNOLOGIES CORPUTX20.249$112.55$2,279.02$87.72$2.64$53.463.01%

The value of the account month over month is not all that important to me.  I am really interested in two numbers, the amount of shares and the expected annual income.  Both those numbers should increase month over month, otherwise something is wrong.  I went from 263 shares to 280 shares this month and an expected income of $471 to $501.


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