We just rolled over to 2020 and who knows what’s in store for the stock market. Many will attempt to garner attention with predictions … All I am going to say is that my dividend income will increase in 2020 as I hold dividend growth stocks and I will invest more money.
I intend to buy the following for our TFSA contributions this year:
- Intact Financials TSE:IFC
- S&P500 Index ETF (VFV)
Otherwise, I have sold some of my Telus and Royal Bank stocks to add more to Intact Financials and VFV. See the pattern here? I am doubling down on those to reach a full position. With the current price of IFC, I need a larger position to DRIP at least 1 share.
Why do such a trade? Both of those Canadian stalwarts are popular holdings but lack the performance I look for in my portfolio. They are more income stocks than dividend growth stocks. Both of these stocks have limited growth from organic business and requires them to venture out and take calculated risks to grow the business.
My sector ratio is pretty stable for now. Since I tend to add small amounts at a time or make small adjustments, there are no major shifts in the sector diversification. So far, the technology, healthcare and communication sectors are mostly US stocks.
The industry allocation below provides a much better picture to my portfolio. A bank is not a credit card for example and both are in the financial sector. I was not looking to add more to the banks but I added JP Morgan Chase NYSE:JPM in the fall.
My December 2019 dividend income is $2,074 rounding up the year for a total of $24,612 and my yield is staying pretty flat at 2.60%. You can see the progress of my annual dividend income below. So far it grows at a 24% rate annually when you factor in all the money I add in a year. You can see the growth rate of the US dividend income is much faster than my Canadian holdings but it’s also much harder to DRIP shares due to their higher stock prices.
My approach leads to the following dividend income but there are more than one way, check out My Own Advisor’s December report for a more Canadian income.
DISCLOSURE: Please note that I may have a position in one or many of the holdings listed. For a complete list of my holdings, please see my Dividend Portfolio.