It’s the last week of April and of course it cannot pass without adding some new investments to my portfolio. In the past I only disclosed my purchases in the monthly overview article, but this time I thought I’ll write about the options I have in mind before pressing the buy button.
I get my salary in the last week of each month. I take it very seriously that the first and most important payment is made to myself. The salary arrives in the morning, then I make the transfer order to my investment account. It usually arrives in the afternoon by US market open and I make the transaction.
It’s a small, but useful habit I have. Doesn’t take more than a few clicks, but this way I make sure that I’m investing continuously. Especially in the first few years, such extra payments are the most important part of the growing of my portfolio. I can’t wait for the time when these will be only a nice extra additions, and the main source will be the passive income.
Now, a few days or hours before payday I have the following investment ideas in mind:
The shares of IBM haven’t had good weeks recently. The share price has fallen from $180 to $160 and this is exactly what I like right now.
The last quarterly report didn’t impress many investors. Revenue is still falling, but we’re still talking about a very solid company. The dividend payout ratio ous 44%, they have a lot of free cash flow and a very impressive dividend increase history.
At the same time the P/E ratio is below 13 and the dividend yield is 3.5%.
Also, IBM is not over represented in my portfolio, so as I see now, it is a good candidate to add some more shares.
My other investment idea is a stock that also has been beaten these days. At the end of last year, Qualcomm was traded close to $70, now I can buy a share for $53. Plus for a 4.4% dividend yield…
The market seems to be very cautious about Qualcomm’s dispute with Apple, but I believe no matter what happens, there’s nothing to worry about on a long term. The dividend is quite safe and the demand for the company’s products remain high (and I believe will still remain high in the future).
Talking about beaten down stocks. Target is only very slightly up since last month, when I already added some extra shares to my portfolio. Seems like the share price has found some support in the $53 zone. My opinion hasn’t changed about it. The only reason why I’m hesitating adding some more shares is that the company already represents a high percentage in my portfolio.
After the first round of the French elections it looks like that the EU won’t fall into pieces at the end of the day. There have been a lot of negativity priced into European stocks which made them undervalued comparing to the US.
It might have perfect sense to increase my exposure in European stocks by adding to my existing holding of VERX ETF. Also it would reduce a bit my exposure to USD.
If you read this blog regularly, you might know that one of my goals for 2017 is to buy my first investment property. Besides of some struggles with the available mortgage options, it looks like that the financing will be possible.
I’m hoping that we can find a suitable property and make the purchase during the summertime. Because of this reason it might make sense to reserve some extra cash for any unforeseen expenses around the transaction, possible renovation, furniture etc.
Changes to the Existing Portfolio
Writing a blog is great in many ways. (Have I already mentioned how easy it is to start your own blog?) Writing these articles also make me think about my own previous decisions. For example the blog post about simple ways to analyze dividend stocks made me review my own portfolio and identify any weak components that I might not wish to hold for multiple years.
One of the stocks I identified was an early purchase, AES. I bought my shares in last February and actually I can’t complain. Including the dividends I received so far, plus the (not negligible) FX gain, I earned 20% in 14 months with this stock. Nevertheless I don’t see AES as a company that can deliver reliable dividends in the future.
Because of this reason I have decided to sell this stock and change it to another one. I already identified the other company that will surely replace AES in my portfolio. This company has a 3% dividend yield, a low, 40% dividend payout ratio, plus on the top of that, they are continuously buying back shares. Rightly or wrongly, I do not really see this name coming up in most of the other dividend income blogs I follow.
I’m not gonna disclose the company right now, but if you are interested, you can check it on our Facebook page. The price is a like or a share 🙂
Quite a few ideas; probably I will chose 2-3 out of them.
How about you? Do you have any investment ideas these days that you wish to share?
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Disclaimer: This post or any other information on the site is not intended to be and does not constitute financial advice or any other advice. I am solely sharing my idea, plan and progress on early retirement.