After my summer break, I am back to reporting my trade activities in a more timely fashion. With my passive income updates now finished up through July, I thought I’d share my August purchases prior to sharing the passive income update. In a change from my previous investment strategy with Loyal3 of just investing $300 per month in my no-cost dividend growth portfolio, I have decided to increase my purchases to $500 per month for the remainder of the year. At the end of the year I will evaluate my progress and the portfolio and determine how I will proceed in 2015.
For those unaware, Loyal3 is a fantastic opportunity for dividend growth investors to invest in a nice bucket of dividend growth stocks with as little as $10 per transaction with NO transaction. I’ve been fortunate enough to begin building my own no-cost dividend growth portfolio and am seeing tremendous success thus far. Of course the kicker to all of this is the ability to utilize your credit card to make the purchases and pick up the credit card rewards as you arbitrage the system. Obviously, responsible usage of a credit card is required if you take this option, however you do gain the ability to juice your first year yield by +1% depending on your rewards card!
For the month of August, I made a total of 14 purchases in this account, in two separate batches, with $500 being invested during the stock market dip at the beginning of the month, and the remaining $200 being made towards the end of the month. The reason for the extra $200 purchase was to make up for only investing $300 during the month of July. I intended on expanding to $500 per month and did not make timely transactions in order to reflect that increase. Overall, I invested in six different companies, all of which were existing positions in my Loyal3 account.
August Loyal3 Trades
Given the slew of purchase, I am forgoing the brief summaries on each position, and have just summarized the pertinent details in the chart below. Some base reasoning behind the purchases can be found below the chart.
The two biggest values I saw in August were the continued weakness in Mattel and McDonald’s as both are facing some headwinds. These were the two companies I made purchases of at the beginning of August as well as towards the end of the month. I continue to slowly add to other positions as they dip and appear to be within my purchase range. I do believe these two companies will persevere, and in 20 years still be viable, dividend-generating businesses.
I generally like Coca-Cola (KO) above a 3% yield and Pepsi above a 2.9% yield. The difference in my expectations between those two companies stems from the greater growth potential for Pepsi given the size of its non-beverage revenue streams. While Walmart (WMT) isn’t a steal, I am happy with anything in the below the $75 mark currently. Lastly, Unilever is an international consumer goods behemoth, and I am happy to snag shares on dips, like the one at the beginning of August.
August Loyal3 Purchase Summary
As with my previous transactions, these took two days to process from the time I put the order in till the time the transactions occurred. All the aforementioned transactions were made with my credit card and did not receive any additional fees, thus successfully arbitraging the process for credit card rewards. August’s purchases resulted in a total increase of $24.69 to my forward 12-month dividends and carried an overall average yield on cost of 3.53%.
My total no-cost Loyal3 dividend growth portfolio consists of seven holdings with a forward 12-month dividend total of $99.48. I am pumped for how far this portfolio has come in such a short period of time. I am looking forward to September when the dividends produced will be large enough to selectively reinvest without new capital. I recently covered this concept with my Snowball City – Loyal3 Dividends post. The full details of this portfolio, updated with these purchases, can be seen on my Dividend Growth page.
If you are interested in checking out Loyal3 and have questions, feel free to let me know!
What purchases are you looking at making in the near future?
Flickr: Aamir Choudhry