Baby DivHut Dividend Income Portfolio Update Q4 2017

Every quarter I like to review baby DivHut’s portfolio and dividend income. Generally speaking there is not much change in his portfolio on a month to month basis as fresh capital is not always available to make trades for him. Still, with dividend reinvestments, stock spin offs and a small buy I made, his portfolio continued to grow in size from last quarter. Of course, the aim of his portfolio is not necessarily to achieve capital appreciation rather dividend growth with the ability to generate an ever increasing passive income stream.

 

With the stock market continuing to chug along it was nice to see some impressive gains made in his portfolio that’s only about two years old. As you already know, I never try and time the market nor my buys. I simply buy when cash is available and let time work its compounding magic. See, when baby DivHut was born it could have been said, in fact it was, that 2015 wasn’t the best possible time to invest. The energy markets were in a tailspin and, if you recall, going into 2016 we were welcomed with one of the worst starts for the stock market as a whole. Of course, the upcoming U.S. election, at the time, was throwing a lot of doubt on stocks too. What I’m trying to say is that there will always be negative headlines and always a reason to not invest. Looking back I’m happy to have started investing for baby DivHut soon after he was born and not wait for the “best” time to put his money to work. With that being said, let’s take a look at baby DivHut’s current holdings, sector allocation and dividend income for Q4 2017.

Portfolio

SymbolDescriptionQuantityCost BasisMarket ValueCost/ShareGain or Loss
ABBVABBVIE INC2.0729$129.22$253.81$62.34+$124.59
96.41%
ABTABBOTT LABORATORIES9.1880$346.24$581.88$37.68+$235.64
68.06%
CATCATERPILLAR INC15.6511$1,061.90$2,546.12$67.85+$1,484.22
139.77%
EMREMERSON ELEC CO COM38.5671$2,016.67$2,817.71$52.29+$801.04
39.72%
GISGENERAL MLS INC COM16.2373$913.63$968.23$56.27+$54.60
5.98%
ITWILLINOIS TOOL WKS INC6.3673$541.46$1,127.01$85.04+$585.55
108.14%
JNJJOHNSON & JOHNSON8.5749$866.00$1,233.07$100.99+$367.07
42.39%
MMM3M CO1.0163$194.62$260.40$191.50+$65.78
33.80%
PFEPFIZER INC13.2384$441.07$517.69$33.32+$76.62
17.37%
PGPROCTER & GAMBLE CO2.0470$186.67$177.84$91.19(-$8.83)
(-4.73%)
ULUNILEVER PLC - ADR13.5923$544.82$760.49$40.08+$215.67
39.59%
VFCV F CORP30.2740$1,904.04$2,499.12$62.89+$595.08
31.25%
YUMYUM! BRANDS INC14.6863$777.09$1,270.95$52.91+$493.86
63.55%
YUMCYUM CHINA HLDGS INC COM14.3595$326.09$675.54$22.71+$349.45
107.16%

Total Investment Balance $15,680.19

Gain or Loss $5,262.72

Q4 dividend income: $86.48

Grand total for 2017 dividends: $300.05 an increase of 30.2% from 2016. As you can imagine, seeing these results made me feel very proud to be able to start my little guy on his own DGI path at such an early age. Taking advantage his greatest asset, time, should create a nice compounded return over the coming decades.

 

Sector Allocation

SectorSector %Market Value
Industrials43.02%$6,746.13
Consumer Cyclical28.35%$4,444.66
Healthcare16.48%$2,583.83
Consumer Defensive12.15%$1,905.57

What do you think about baby DivHut’s portfolio and sector allocations? I would appreciate any suggestions for potential stock picks as well. Please let me know below.

Disclosure: Long all above

30 thoughts on “Baby DivHut Dividend Income Portfolio Update Q4 2017

  1. As Ive mentioned before, love these updates and you have motivated me to put together the quarterly updates for Baby R2R as well. Congrats to Baby DivHut for the steady progress. Thanks for sharing and keep up the great work.

    R2R

    • Hi R2R,

      Always love to read updates from a like minded long term investor. In time, I’m sure your little one will thank you for the steps you have taken to ensure a better financial future. Keep it going for yourself and your child!

  2. DHut,

    I really like the portfolio. I am thinking going this route for my little guy as well. I understand the value of the 529 – style plans due to tax savings, but in the long run I think I want to hand him something that is useful in any capacity – not limited to types of education.

    – Gremlin

    • Hi DG,

      I have nothing against 529s and the like. Boy, did I get some comments telling me how wrong it was to not do a 529. Who knows what the value of college will be in two decades, especially with costs rising like crazy and the values of degrees, for what you pay, going down. Just like the gig economy is changing traditional employment, so to, A.I., self-taught trades, programming etc. can change what we think about traditional education. Thank you for commenting.

  3. “…the aim of his portfolio is not necessarily to achieve capital appreciation rather dividend growth with the ability to generate an ever increasing passive income stream.”

    Well said! As far as potential items to consider, you might look at REITs right now due to lower valuations recently. I’m not certain if the portfolio is in a tax-advantaged account, but that’s an important consideration – especially with REITs and other assets taxed at ordinary income rates. But I don’t know how much you’re having Baby DivHut work yet…
    Mike at Balanced Dividends recently posted…160,962 Calories and 209 Workouts: 365 Days LaterMy Profile

    • Hi BD,

      He has a regular taxable account so REIT distributions would be taxed at higher rates than regular qualified dividends. That being said, I would still consider adding some REIT exposure perhaps through an ETF like VNQ. Seems like a good way to get a lot of exposure to the sector in one quick shot. As always, I appreciate your comment.

  4. Hi there divhut. Nice and growing portfolio you got there 😉 Actualy what you mention for y2015 was the best year to invest. When stock market is going down is the best time 🙂 now since its all ul up (and away) its becoming irrational to inves for example into JNJ whe you have to pay 25y of their profit… 25y thats just 4%. And dividends is 2.something%. If you can get 2.5% from your goverment 10y bond the price becomes a bit irrational 🙂 I like JNJ but if it will go over 30 P/E and the yield after tax (-30%) below 1%. Sorry im selling it 🙂

    • Hi P2035,

      In hindsight 2015 was a great year to start investing but I can guarantee you will find article after article from that year stating that stocks were dangerous, energy was a drag, etc. etc. There are always negative headlines no matter how good times are. I understand your reasoning behind JNJ but for myself and child I would just hold no matter how ridiculous valuations and yields become. I just want to collect those dividends “forever.” Thank you for stopping by and commenting.

  5. Awesome that you already have a portfolio for your baby. We have a savings account with a monthly deposit. I’ll talk to the wife to see if we can do something like this! 🙂

    • Hi MR,

      Talk to the wife for sure!!! Mrs. DivHut was very eager to start this portfolio after our baby was born. She has seen first hand our own growing passive income portfolio and understands the greatest asset baby DivHut has is time when it comes to long term investing. As always, I appreciate your comment.

    • Hi DD,

      Ideally, I’d like to model his portfolio after mine with consumer staples being the largest sector followed by industrial stocks and health stocks so I guess you could say the portfolio was created this way by design. Of course it will grow over the years as I expand into other stocks and sectors. Thank you for stopping by and commenting.

    • Hi Passivecanadianincome,

      You said it. I’ll take the growth. I’m sure when he’s an adult he’ll enjoy the capital appreciation but my goal is to teach him to enjoy the fruits (dividends) of his portfolio and leave the trees (stocks) alone. Thank you for sharing your thoughts.

    • Hi dividendgeek,

      I’m open to all suggestions and ETFs might have a place in his portfolio one day. For now, I want to focus on some core individual holdings and then potentially venture into other assets types. I have to admit, VNQ does look like an easy way to get REIT exposure in one shot. Thank you for your suggestion.

    • Hi DD,

      Time is the friend of the young. Whatever missteps the portfolio might suffer in the coming years should hopefully be mitigated simply by the long time horizon he has. If only we could all start investing as babies… Thank you for stopping by and commenting.

    • Hi MH,

      Thanks for that vote of confidence. I mirrored the portfolio after my own. Of course, it will get larger over the coming years, but as you can see, I went with solid “low stress” stocks to start. As always, I appreciate your comment.

    • Hi DP,

      Me too. My own portfolio is about ten years old and I still can’t imagine what two decades or more will do for him. The reality is that everyone can do this for their child. Gone is the day when stock market investing was cumbersome and very, very expensive. With free and very low cost trading sites/apps anyone can buy very small and start a portfolio for themselves or children. Thank you for commenting.

  6. Looks like a solid portfolio of dividend payers that you shouldn’t have to stress too much about over the coming years. Baby DivHut has an amazing start to investing life here, and what a gain already! Looks like a sign that Baby DivHut is just meant to be a successful investor 🙂

    • Hi FFF,

      That was done by design. While I will always monitor his portfolio I know that I don’t have to watch it daily or even weekly for that matter. Now I just have to pass on the investing wisdom I have and hope he’ll be a money-wise investor. Thank you for sharing your thoughts.

    • Hi timeinthemarket,

      Thanks for those words. For now, the portfolio is modeled after my own but I am willing to add other stocks that I do not own that may provide him with faster growth. We’ll see as time goes by. In the meantime, it’s buy and hold when cash is available, reinvest and “never” sell. Thank you for stopping by and commenting.

  7. Thanks for sharing, Keith! I really enjoyed this line – “I never try and time the market nor my buys. I simply buy when cash is available and let time work its compounding magic.” I employ the exact same strategy. Also, the portfolio is filled with great names. It’s looking like Baby DivHut will be in a great position by the time school comes around. Keep it up!
    Reverse The Crush recently posted…Why the Education System should make Financial Education a PriorityMy Profile

    • Hi RTC,

      That’s been my investing mantra since day one. It applies to me and applies to my child’s portfolio. I’ll freely admit that I have no idea what the market nor any stock will do in the near, mid and even long term. That being said, I’m not afraid to jump in, buy and hold, diversify and simply collect dividends and create an ever increasing passive income stream for myself and child. As always, I appreciate your comment.

    • Hi DI,

      I feel very happy to able to do this for my child. I can only imagine what twenty years of compounding can do for a dividend growth portfolio. Thank you for stopping by and commenting.

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