Wednesday, April 19, 2017

Major Changes to My Monthly Investment Plan

Image result for big change

Just when I thought I was done fine-tuning my monthly investment plan just a few days ago, loyal3 dropped a bomb (an email) forcing me to re-do it all over again. This is a big change for me, as the illustration above summarizes how I felt. My monthly investment plan relied heavily on loyal3 for proper diversification, as Loyal3 had a great selection of consumer, technology, and financial stocks. In fact, out of $3500 monthly investment, $1900 was via loyal3. Now that loyal3 is gone, I am left with only no-fee DSPPs to choose from. I spent hours searching through various DSPPs sites, to include computershare.com, shareownerline.com, astfinancial.com, and stockplans.broadridge.com, for candidates to add to my monthly investment plan. The vast majority of stocks available either charge fees or had poor fundamentals to be investable. I did find a couple more stocks (UNP and DPS) to add to my plan. Additionally, I restarted ongoing monthly investments in GIS and BMTC and stopped ongoing monthly investment in NSC. Finally, I increased amount of monthly investment in a number of stocks. Here is the revised plan:
TickerRatingDGIShiller P/EYieldMonthly InvestSectorSector TotalSector Percent
NVSA1B15.263.74%$200.00
Healthcare
$600.00
21.43%
SNYA2B22.903.57%$200.00
BDXB+2A33.931.59%$200.00
DPSA2C36.192.36%$200.00
Staples
$400.00
14.29%
GISB1B23.803.32%$200.00
XOMB+1A11.053.73%$300.00Energy$300.0010.71%
AFLB3A14.692.34%$300.00
Financial
$500.00
17.86%
BMTCDC25.842.11%$200.00
EMRA2A18.843.30%$200.00
Industrial
$600.00
21.43%
UNPA2C27.072.27%$200.00
VMIDD24.540.99%$200.00
YORWDB46.941.78%$200.00Utility$200.007.14%
SONC2A24.322.87%$200.00Material$200.007.14%
Total24.162.64%$2,800.00$2,800.00100.00%
Rating$%$%
A$1,00036%$1,20043%
B$1,00036%$80029%
C$2007%$60021%
D$60021%$2007%
Total$2,800100%$2,800100%
Rating is based on Morningstar as follows:
A=Wide Moat; B=Narrow Moat; C=No Moat; D=Not rated by Morningstar
+=Exemplary; [blank]=Standard; -=Poor stewardship
1=Low; 2=Medium; 3=High; 4=Very High uncertainty
DGI (Dividend Growth investing) as follows:
A=25+ years of higher dividends;
B=10-24 years of higher dividends;
C=5-9 years of higher dividends;
D= less than 5 years of higher dividends.

Changes implemented:
1) All the stocks from loyal3 are dropped (involuntarily). That is 13 total. 

2) DPS is added. It is a wide-moat stock and substitute for KO or PEP which I can no longer invest in.

3) UNP is added to replace NSC. UNP has shown better growth and profitability than NSC; moreover, I already have more than $14k invested in NSC so I felt it prudent to diversify into UNP.


4) GIS is added back. I stopped GIS before because it was lower in quality than other consumer staples stocks available through Loyal3. Now that Loyal3 is gone, there are not many good consumer staples stocks to choose from, so GIS would have to suffice.

5) BMTC is added back for similar reason as 4) above.

6) SNY, BDX, YORW, and SON are increased from $100 to $200/mo, while XOM and AFL are increased from $200 to $300/mo. This is done to boost overall investment level to $2800/month given the small number of stocks in the plan. 

Overall, the overall investment level of $2800/month is still lower than the $3500/month before. Number of stocks plummeted from 23 to 13. Shiller PE decreased slightly (1.1%) from 24.44 to 24.16. Yield, unfortunately, increased 8.6% from 2.43% to 2.64%. 

In the coming months, I will continue to look for no-fee DSPPs that may be added to this plan, as well as ways to lower the portfolio PE and yield.

3 comments:

Anonymous said...

Take a look at stockpile.com.... 99 cent trades...has a similar feel to LOYAL3

JTF said...

Thanks for commenting! I took a look at stockpile.com, but don't like what I see. 99 cent trades add up, and if you are doing >5 trades a month, you would be worse off than if you just went along with FolioFirst.

Have you check out Merrill Edge? They give 100 free trades/month, just maintain at least 100k balance. Why pay for commissions when you can trade for free?

Investment Hutning said...

Robinhood. It's been a while since I used it but back then all trades were free. The best part is that Robin isn't limited to a handful of stocks like Loyal3 is.