If you’ve been following all of our industry analysis articles, you would know that after our analysis a few days ago of the REIT sector, we’ve now completed selecting our target of 30 stocks for the Quantigence DGI portfolio. As we were writing about before, we’ve been saving a great deal of money to buy a $13,300 position in each of these 30 stocks which would give us a portfolio worth $400,000. The yield target for our $400,000 portfolio is 3% since that would give us $1,000 per month of income to help us escape corporate jail.
So far we’ve invested about $155,000 into various positions and our weightings are all over the place. We have an additional $170,ooo saved up in cash or liquid assets. What we are doing for each holding is to set a target value of $13,333 to be accumulated over the next 24 months. We’ll report on the progress we make in that respect, but for now let’s just take a look at what our portfolio looks like sorted by Q-Scores:
We have now put the entire Quantigence DGI Portfolio on the Motif Investing platform which will allow you to trade this basket of 30 stocks for just $9.95 per trade. You can also track this portfolio’s historical and ongoing performance against the S&P 500 and also easily see what our current yield is for the entire portfolio. Current yield for the Quantigence DGI Portfolio happens to be +2.59% or just one basis point off of the current yield of the S&P 500 which is +2.58%.
The average 10-year dividend growth rate for our portfolio is +12% while the average 5-year dividend growth rate is +10.6%. Here’s what our yield on costs would look like projected out over the next ten years using the lower of the two:
If we were fully vested in our portfolio today, in 10 years’ time we would have a yield-on-cost of just over 7% or monthly income of $2,333 As it stands with todays’ yield, we’re only getting income of $863 per month.
The above yield forecast table provides us with a benchmark of sorts which shows us if we’re getting better or worse over time in regards to the growth of our income stream. Remember, we judge our performance by the extent to which our income streams grow over time. We look for zero portfolio turnover if possible. Some of our companies such as Chevron are demonstrating their ability to keep growing their dividends during times of crisis and we will let them get on with doing that. We will not second guess ourselves and start trading in and out of positions. The average company in our portfolio has increased dividends for 37 years running and we have every reason to believe they will be able to keep doing so. The average company in our portfolio has a market cap of $96 billion and conducts 39% of their business overseas. Large international companies are able to more easily weather times of crisis and enjoy the benefits of “economies of scale”. We’re excited about our newly constructed portfolio, and look forward to collaborating with you the reader in order to make it even better over time.