I really wanted to take some time to get down my thoughts and start to form a game plan for the capital I'm expecting to receive in the next few months. March will be a three paycheck month for me and I also expect to receive my tax return by the end of it.
With such a large influx of capital in such a short amount of time, I wanted to write out my current thoughts and approach for the allocation of these funds. It is very important that I form a solid plan for this money as I expect to have around $4,000 to invest and it is imperative that I take full advantage of this buying power
With the current relative strength of the market, we have seen stocks breaking new 52 week highs Almost on a day too day basis. This is a pro, and also a con. It is a pro for all those currently invested into these holdings and are enjoying the sweet ride of investment returns. It is a con for dividend investors like myself as this creates a trickier entry point and also reduces the yield I will be able to receive for my money.
My ideal stock buying situation is when a company is in between their 52 week high and 52 week low. This creates a good entry point for my stock valuation with a solid dividend yield also. I know that dividend investing is for the long haul but, It is never great seeing an investment turn red all the while thinking to oneself, I could have bought in lower...
one of the things that I feel sets me apart from other dividend investors is that I care about what price level I get into a stock with. I love waiting for pull backs or any dips that are created. A lot of times I can get into a stock at a great entry point by taking advantage of some news that may not be the best, but won't hurt the long term out look of the company.
Now I'm not saying other dividend growth investors don't also strive for this, it's just that I don't really see as much of an emphasis put upon it as I like to. I like knowing that I have more upward potential with room to go versus the opposite. Currently, most of my investments are above my cost basis and I would like to keep it that way.
I have already began to do research on the company's that I'm listing on this article. I still haven't decided if I'm going to be purchasing 2 new positions while adding more to a current one or, just splitting the capital and adding to my current holdings. I'm really loving my current portfolio mix and I have a few companies I would like to add more to.
My current research and watch list is as follows, EMR, ORI, GE, ED, LEG, AFL and CLX. I'm really loving all these current company"s, a few of them are dividend aristocrats which is what I'm trying to get back on track with adding to my portfolio. I won't be including research on all these company's listed since their are so many but I can tell you that these are some solid names and I'm definitely looking forward to adding these to my portfolio eventually.
I don't know exactly when I will be receiving the money so it makes it more difficult for me to truly lock into which company I will be choosing since I'm also focusing on the current stock valuation before purchasing into. A lot can happen in a month and I could miss some awesome opportunities or it could work out in my favor when I get my money the opportunities will open up for me.
I'm super excited for the day my tax return hits my bank account as it will be time to go shopping. I'm looking forward to writing up some great articles about the purchases and adding up the affect they will have on my annual dividend payout! I also know that with the expenditure of this capital, it will increase my annual dividend payout to equal one full work paycheck. Who wouldn't like to squeeze an extra paycheck into their year?
It will be an exciting couple of months for the Independence Fund as I put this extra capital to work for me. I'm looking forward to writing about my purchases and documenting this journey in my life. Thank you to everyone who has followed along till now and even to those who have just started!
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