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 couple small buys I made, his portfolio continued to diversify 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 gyrating wildly the last few months, it was nice to see baby DivHut’s dividend income continue coming in like clockwork and grow on a year over year basis. 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 year 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 Q1 2018.
Portfolio
| Symbol | Description | Quantity | Cost Basis | Market Value | Cost/Share | Gain or Loss |
|---|---|---|---|---|---|---|
| ABBV | ABBVIE INC | 2.0859 | $130.69 | $193.80 | $62.65 | +$63.11 48.29% |
| ABT | ABBOTT LABORATORIES | 9.2321 | $348.81 | $548.57 | $37.78 | +$199.76 57.27% |
| CAT | CATERPILLAR INC | 15.7292 | $1,074.11 | $2,392.10 | $68.29 | +$1,317.99 122.71% |
| D | DOMINION RESOURCES INC | 8.0777 | $584.30 | $517.86 | $72.33 | (-$66.44) (-11.37%) |
| EMR | EMERSON ELEC CO COM | 38.8336 | $2,035.38 | $2,674.47 | $52.41 | +$639.09 31.40% |
| GIS | GENERAL MLS INC COM | 16.3734 | $921.59 | $743.76 | $56.29 | (-$177.83) (-19.30%) |
| ITW | ILLINOIS TOOL WKS INC | 6.3999 | $546.43 | $999.54 | $85.38 | +$453.11 82.92% |
| JNJ | JOHNSON & JOHNSON | 8.6292 | $873.20 | $1,143.71 | $101.19 | +$270.51 30.98% |
| KMB | KIMBERLY CLARK CORP | 5.0642 | $584.50 | $543.39 | $115.42 | (-$41.11) (-7.03%) |
| MCD | MCDONALDS CORP | 5.5046 | $907.64 | $890.75 | $164.89 | (-$16.89) (-1.86%) |
| MMM | 3M CO | 1.0220 | $196.00 | $223.03 | $191.78 | +$27.03 13.79% |
| PEP | PEPSICO INC | 5.2435 | $606.19 | $577.99 | $115.61 | (-$28.20) (-4.65%) |
| PFE | PFIZER INC | 13.3623 | $445.57 | $489.86 | $33.35 | +$44.29 9.94% |
| PG | PROCTER & GAMBLE CO | 15.0082 | $1,292.08 | $1,181.88 | $86.09 | (-$110.20) (-8.53%) |
| SO | SOUTHERN CO | 6.7988 | $303.89 | $305.27 | $44.70 | +$1.38 0.45% |
| UL | UNILEVER PLC - ADR | 13.7056 | $550.80 | $769.16 | $40.19 | +$218.36 39.64% |
| VFC | V F CORP | 30.4586 | $1,917.97 | $2,365.41 | $62.97 | +$447.44 23.33% |
| YUM | YUM! BRANDS INC | 14.7505 | $782.38 | $1,277.25 | $53.04 | +$494.87 63.25% |
| YUMC | YUM CHINA HLDGS INC COM | 14.3945 | $327.53 | $576.50 | $22.75 | +$248.97 76.01% |
Total Investment Balance $18,405.29
Gain or Loss $3,976.23
Q1 dividend income: $99.82 which is on track to surpass his 2017 total.
Sector Allocation
| Sector | Sector % | Market Value |
|---|---|---|
| Industrials | 34.17% | $6,291.79 |
| Consumer Cyclical | 27.77% | $5,113.04 |
| Consumer Defensive | 20.70% | $3,811.64 |
| Healthcare | 12.88% | $2,372.47 |
| Utilities | 4.48% | $824.18 |
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
Hey DH. I am doing the same thing for my children, but I never thought about putting it in a blog post. Great idea! I am using the Vanguard S&P 500 fund for both children, so my update would be a lot shorter. ?
I’m sure you are doing it for the same reason I am – the time value of money. These kids could pile up a mountain by the time they need it, given how early we are starting.
Have you considered adding REITs? A lot of folks are scared right now because of the Amazon factor and rising interest rates, but long-term a few of those funds might do very well.
Hi DF,
I’m always happy to read about another parent doing something similar for their children. As you already know, we are taking advantage of our kid’s greatest asset, time. In two, three or more decades a portfolio started from such a young age can amass a huge compounding income pile. For now, no REITs in his account. It’s still a work in progress as I’m building and diversifying his holdings.
Great stuff, DivHut. As Ive mentioned in the past, your quarterly updates have been an inspiration for me to share Baby R2R’s portfolio and details. Long term investing FTW 🙂
cheers
R2R
Roadmap2Retire recently posted…Personal Challenges & Habit Formation
Hi R2R,
Glad these updates can inspire you to do the same. Almost time to do another quarterly update. Where does the time go?
Nice hut. Seems like your getting great returns as well. Lil hut should start off well in the future.
Cheers!
Passivecanadianincome recently posted…Save On Gas – Super Easy!
Hi Passivecanadianincome,
The main goal of his portfolio, like mine, is dividend income. Sure, over the near and mid term he’ll be holding some losers but hopefully with reinvestment, fresh capital and patience those losers will be long term winners.
That is such a good idea! I’m thinking of doing the same once we have kids. My first idea was simply to open an account with good interest rate for youngster, but even that does not have very high interest in Switzerland. Opening a custodian broker account is a great idea 🙂
Can you share how much you already contributed to the account ?
The Poor Swiss recently posted…The three pillars of Retirement in Switzerland – 3. The third pillar
Hi TPS,
Unfortunately, a savings account these days simply won’t cut it over the long haul. I figure if dividend growth investing is good for me it should be good enough for baby DivHut, especially since we started his portfolio from birth. I don’t have an exact figure of how much we put in but you can see his gains and subtract that from his total portfolio value to get a rough idea. Of course, that doesn’t factor in dividends received.
Babyhut is set for life. Even if you don’t set any more money, retirement is now covered. I have my kids all in total stock market index ETFs. Easier for me since I have 5 kids and easier for them when they take it over. (Unless they want to become a DGI like us.)
Peace,
DFG
Dividend Family Guy recently posted…DFG March 2018 Dividend Income
Hi DFG,
I don’t know if he’s set for life but he is being given a financial leg up, that’s for sure. It’s awesome that you are doing the same for your children. Over time it doesn’t require huge investment amounts as long as you consistently add to their portfolios and let time work its compounding magic.
DivHut,
That is awesome. He is already ahead of the vast majority of Americans. Keep up that good work!
– Gremlin
Dividend Gremlin recently posted…Recent Sale / Buy April and Other Developments, 2018
Hi DG,
Your comment is sad but unfortunately true. Whenever we have spare cash to invest we add it to his portfolio. Taking advantage of time in the market could prove to be the best thing for baby DivHut.
His portfolio is cranking up great returns! Goo job!!
Dividend Income Stocks recently posted…Purchased more shares of AltaGas (ALA.TO)
Hi DIS,
Indeed it is. My only goal for his portfolio is to create an ever increasing passive income stream and as long as there is year over year progress I am happy.
Hut –
Awesome results, WOW, just is looking so nice!
-Lanny
Hi DD,
Always happy to read a supportive comment. Baby DivHut is well on his way. Don’t want to rush things but it will be very interesting to see where this portfolio stands in ten or twenty years.
I was thinking similar to Dividend Gremlin: Baby DivHut has a great portfolio that is also likely ahead of a number of folks. Thanks for sharing. – Mike
Mike at Balanced Dividends recently posted…Post-March Madness: 5 (Plus) Ways To Find Balance
Hi BD,
It’s all about making purchases when you can, reinvest dividends and simply hold on through all the highs and lows of the market. We all wish we had more time to invest. Our children do.
This is great set of companies for baby Hut 🙂 Very nice collection.
Was it difficult to open custodial account ? I am assuming this is margin account, right ? I and Mrs. TDK were talking about our two kids to get them custodial account, great to know you are doing awesome for the kiddo :).
Good Luck,
TDK.
Hi TDK,
It’s easy opening up a custodial account. Fill in name, details, social, beneficiary and you are set. This is not a margin account just a regular taxable account in his name. I always say, take advantage of a young child’s greatest asset, time. Buy solid companies, diversify, reinvest dividends and just ride out all the highs and lows over the next two decades or more.
Hi DH
Been a while since I stopped by but incredible progress made on Baby DH’s portfolio!
Hi weenie,
Thanks for your comment and continued support. Baby DivHut has something we all want more of, time. Why not take advantage of his greatest asset?
I’m thinking of setting up one up for my family as well, and will probably do so for my kids when we have them. That being said, I think dividend yields are pretty low nowadays and bond yields are actually higher. Investing in stocks only makes sense if they’re undervalued, and the stock market has a whole is overvalued nowadays.
Troy Bombardia @ Bull Markets recently posted…Why I’m medium-long term bullish on the stock market
Hi BM,
I think something should be set up for any child that comes into this world. I don’t care if it’s cash under the mattress, precious metals, stocks, bonds, collectibles, etc. Just start saving/investing a little at a time and take advantage of time. For now, I plan to keep baby DivHut all in stocks. Of course, that may change over time but for now I’m comfortable creating a mini dividend income portfolio for him.
Woah, off to a cracking start!
Baby Income Master is sitting at a bit over $3,000 now at just 13 months old. Looking forward to hitting that 5 figure mark.
Hi IM,
Take advantage of BIM’s greatest asset, time. Consistent small investments can grow into something substantial over a couple decades or more. Keep it up.