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This is a recent addition to the dividend portfolio blog. Much like my
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As mentioned in previous articles, I love inspirational (and other) quotes.
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Monthly Income Update – June 2002
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Dear Readers, It is that time of the month again. We have yet another month
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Monthly Review Of DivGro: June 2022
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Welcome to the monthly review of DivGro, my portfolio of dividend growth
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June 2022 $100 Challenge account review
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The stock market is still in a bear market and has high volatility. That is
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July 2022 Net Worth $1,657,412
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Hey Everyone and welcome to our July 2022 net worth update. We are at the
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Are Dividend Increases Beating Inflation in 2022?
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The US stock market has been turbulent recently. As a Dividend Growth
Investor, I usually ignore stock price fluctuations, unless I am looking to
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2020 Q1 Dividends - $430.58
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The markets have been in turmoil and I have seen my investments drop by
20%. My standard reply to market volatility has been that I don’t care
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Portfolio Update – March 2021 – $1,000 per month!
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I am a little shocked, and disappointed in myself, that it has been almost
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Passive Income for July 2020
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Once a month, I like to talk about my total passive income for the previous
month. I do this to track how much passive income is coming in. When I
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Portfolio Update May 2020
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It is time to give a new update about my current portfolio. April has shown
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The post Portfolio Up...
Buy: ABBV
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Today I added a new position: ABBV. They didn't show up on my screener
because some spin-off activity made it look like their div history is much
shorter t...
Exchange Traded Funds (ETF) are another form of investing vehicle available to investors. The major attraction for ETF has been low cost expenses and fees in comparison to mutual funds and ability in trade during market hours. Like any other investing vehicles, I believe ETFs have a strategic role to play in our portfolio. The simplicity with which one can buy and sell an ETF makes it difficult to understand how it is structured and what its constituents are. ETFs are good investment vehicle for broad market exposure and access to alternative assets.
Broad Exposure: It can be used for hedging against broad market performance, broad industry sector, broader country exposure, or any particular asset class. Investors need to understand which particular ETF is structured to meet that objective (all ETFs are not created equal). Many ETFs invest in few bunch of stocks and expect only those small number of stocks to provide broader exposure. In my viewpoint, ETFs for broad exposure should consist of more than 250 or more stocks.
Access to Alternative Assets: This is one the significant benefits depending upon how the ETF is constructed. E.g. ETFs based funds for leverages, currencies, commodities, futures, etc are being made available. However, I believe that such ETFs are high risk prepositions. I am not advocating the use of such assets, but merely pointing the fact that such asset classes were not available earlier.
ETFs can play these two roles successfully if investors are investing for long haul and understand their structure.
Time Horizon: The time horizon should be in the order 10 years or more. One of the methods to invest in ETF is dollar cost averaging over a period of time. There is a school of thought that investors should buy when an ETF is below intrinsic value or when relative PE is less than one. It is next to impossible or futile to go into these exercise. Keep it simple, and hence buy and/or continue to add when it is below 200 day and 365 day moving average.
ETF Structure: Many ETFs are closed end funds with high expenses, many provide dividends that include return of capital, many provide short term gains distributions, many consist of only 30 or 40 stocks based on capitalization, etc. In addition, investors need to more careful for ETF focusing on emerging markets. Many funds just invest in ADR/GDR/ADS, which is locally available in US and still charge high fees, many only have less than 100 stocks, etc.
ETFs can strengthen investor’s portfolio and help in asset allocation. At this point in time, ETFs are the best investment vehicles to get exposure to emerging markets. I use Wisdom Tree ETF, EPI, for exposure to Indian economy. Investors do not need to worry about identifying countries or individual companies in emerging countries. It provides a means to invest in India markets, but also a mechanism to buy and sell easily during trading hours in US bourses.
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As mentioned in previous articles, I love inspirational (and other) quotes.
I see quotes as a portal to someone’s inner self. They reveal much about
the pe...
9 hours ago
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The US stock market has been turbulent recently. As a Dividend Growth
Investor, I usually ignore stock price fluctuations, unless I am looking to
buy a qua...
3 weeks ago
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