About once a quarter 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. Not only can portfolio balances be thrown out of sync but dividend distributions can as well. Positions may grow over time because of fresh capital being added, the inevitable dividend cut may occur or recent stock sales can all affect the flow of our dividend distributions. As a dividend income portfolio matures I think it’s very important for one to see which stocks and which sectors are paying out their dividend distributions and see if the current flow matches ones investing risk tolerances. Of course, this is all a matter of personal preference.
Below you will find my recent asset allocation for my dividend stocks from all three of my accounts. As you can see I still favor the consumer sector a lot and will continue to add to that space as weakness in certain stocks permit. In recent weeks it seems that General Mills, Inc. (GIS) has fit that bill perfectly as I have added to that name for the last couple of months along with many of our investing peers. Other consumer names that continue to look weak are V.F. Corporation (VFC) and Hormel Foods Corporation (HRL) which have also been added to my portfolio in recent weeks. Of course, even with the market at all time highs there are still quite a few individual stocks trading at much better levels these days when compared to just a few months ago. Stocks like W.W. Grainger, Inc. (GWW) and Cardinal Health, Inc. (CAH) come time mind. I will continue to watch these names and nibble from time to time all the while making sure my overall allocation does not go beyond my comfort levels for any one of these stocks.
In all, the end game remains the same for me… Continue to grow my passive income stream and make sure that no one stock or sector that I’m not comfortable with long term becomes too large and responsible for the majority of my dividend income.
