Trades – February 2015 Loyal3 Portfolio Purchases

February No-Cost Dividend Growth Portfolio Purchses - Is this the Coke Bear

What I imagine the Coca-Cola bear does in his spare time…

End of the month and time for my purchase update for my Loyal3 dividend growth portfolio. As with every other update over the last 14 months, nary a dollar has been spent on commissions or fees. Over the course of the past year, there have been many changes with Loyal3, including the elimination of purchasing by credit card. The most recent change is the improvement of speed in purchases. Previously, it would take two business days to process a transaction from the time of order. This past month my transactions all occurred within one business day of initiating the purchase.

Faster is better, but always remember that Loyal3 is a batch-trading entity. This limits their trading costs and helps them remain a viable no-cost option for investors like myself.

Interesting enough, the timing of purchases was a huge topic of discussion after my Loyal3 purchase update post last month. In one of the most commented posts in the history of this site, the main driver of that conversation was a back-and-forth discussion between Jason at Dividend Mantra and me. There were a lot of points made in that discussion and Jason brought up a couple of things that are important to remember.

  1. Just because you aren’t paying commissions, doesn’t mean that you’re buying a stock at fair value. Commissions and the fair value of a position are mutually exclusive, and are not dependent on one another.
  2. Batch-trading is just that, orders filled in a group trade. There are no real-time or limit orders as you would see at a traditional brokerage.

There are limitations to investing with Loyal3, however the value-add isn’t completely negated by either of the points above, however they must be taken in consideration. Know your fair value limits and goals with any purchase. Understand that the price you pay will go up or down after you hit the ‘Invest’ button. If you’re someone who is a pro at market-timing, I can understand the challenge with batch trading, but for me, outside of rare outliers where a company gains or loses 5% or more in a day, it doesn’t matter. If you’re investing in a high quality company, such as Coca-Cola, no one will remember the 1.2 shares you bought when the price was $41.30 versus $41.15 or $41.45. Especially when they are consistently rewarding shareholders with fantastic dividend raises (courtesy of My Dividend Pipeline).

To summarize, Jason wanted very clearly to express that Loyal3 isn’t the bargain or deal that I lay it out to be. In some ways, he is absolutely right. You have no control over the exact price you pay for a stock. This is absolutely a sacrifice to make when using their service. However, for me, this is a great opportunity to build positions in companies at prices I believe to be fair, without paying commissions on top of those prices. I tout the no-cost nature of Loyal3 quite regularly, but implicit in the no-cost nature is there is a risk of paying more (or less) than the price of a position when ordered, and costing me money. At the end of the day, it is a matter of control. I sit squarely on both sides of the fence as I have a traditional AND side portfolio for my dividend growth investments.

With the risks appropriately stated, let’s circle back to the purchases of February in my Loyal3 portfolio. Over the course of the month I invested $300 dollars into new positions, with a small piece of this coming from available cash due to dividends in the account. This will be the case for pretty much every month for as long as I hold this account. Loyal3 automatically combines your new capital with dividends received that aren’t reinvested directly (thus far only KRFT).

February Loyal3 Trades

I’ve gotten more into showing things around here in a nice chart because I love the simplicity of visuals. Below you will find the overall totals for each position and related purchase information for the last month.

February No-Cost Dividend Growth Portfolio Purchses - Table of Activity

None of the positions above represent a new position in my Loyal3 portfolio. As you can see, Nike is the largest pickup of the month, as their price dipped nicely a couple of weeks ago. I took the opportunity to pick up shares and build my small position with them a bit larger. As you can see in the table above, both NKE and VF Corp represent a long-term dividend growth play as they both have lower initial yields but hold the potential for higher growth.

Loyal3 Portfolio Summary

As you can see in the chart above, February’s purchases resulted in a total increase of $5.46 to my forward 12-month dividends and carried an overall average yield on cost of 1.82%. This is well below the average yield of the portfolio, but offers greater long-term growth and greater increases to my dividend income.

Containing 14 different positions, my Loyal3 portfolio has a forward 12-month dividend total of $239.37. Amazing the power of regular investing! Now finishing the 14th month of investing in this “side” portfolio, it has grown to be its own dividend producing machine. Below is a snapshot of some of the portfolio details.

February No-Cost Dividend Growth Portfolio Purchses - Overall Portfolio

The full picture of this portfolio can be seen on my Dividend Growth Portfolio page. If you’re interested in seeing what dividends this portfolio actually generates in 2015, check out my 2015 Dividend Calendar.

Go check out Loyal3 and let me know what you think.

In the short month of February, what were you buying?

Flickr: Valerie

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  1. WYOR,

    Glad to see your Loyal3 portfolio continuing to grow and prosper. I am happy with the service because, like you, I see the positives of no-cost investing regularly outweighing any negatives with market timing and the batch ordering. I also have a side portfolio to diversify beyond what Loyal3 can offer and I like to average the no-cost investing with the cost of investing in that portfolio to help keep my total investment costs low enough to not be a drag on future returns. Keep up the great work over there and I like the visuals as well.


    • FD, thanks for stopping by. I am happy with how my Loyal3 portfolio is growing and believe the overall benefits outweigh the negatives. For me, Loyal3 is the side portfolio, and will likely always remain that way given the limited investment options. If they are able to expand their offerings drastically, than it might change how I view that portfolio in relation to the rest of my invested assets.

      I appreciate you sharing your thoughts!

  2. Great post. I started testing Loyal3 a few months ago with two $100 purchases each month of MCD and WMT. I guess I have been lucky, my purchases happen the same day they are planned. So far I like Loyal3. I hope the company is successful and opens up to more stocks.

    • Over the last month or so, my purchases have accelerated to happening either on the same day or the day following, depending on my funding source. Given the faster processing of payments from what they used to be, Loyal3 becomes even more viable as an investment vehicle.

      Thanks for stopping by DD!

  3. I picked up my monthly purchases of MSFT, WMT, K, and UL from Loyal3. Also added my monthly contribution of XOM and VZ from Computershare. Finally invested in AFL through Robinhood.

    Very good points about the batch trading through Loyal3. I am like you in that I don’t mind the price fluctuations of the batch trading. Loyal3 allows me to diversify my investments with a small amount of money. I would not be able to invest like this using a normal online broker.

    • You’ve got money all over the place it looks like. Some great buys with all of those companies, five of which I own as well. The batch trading really isn’t a big deal for me, since timing the market by a few pennies is meaningless over the long haul, with swings on both sides of the coin.

      Thanks for sharing your thoughts and for stopping by, much appreciated.

  4. W2R, Overpaying by a few dollars here and there shouldn’t worry you. I don’t consider this to be a downside of the Loyal3 service. Regularly and consistently picking up high quality companies over a long period of time should lead to very good long term wealth accumulation and dividend income.

    • Doesn’t worry me! I wrote up some of these ‘downside risks’ in response to the commentary on my previous month’s purchase summary. A lot of good stuff in there, some valid, some not, but ultimately doesn’t dissuade me from pursuing building a portfolio through Loyal3.

      Thanks for passing on your thoughts Integrator.

  5. Looks like great additions overall! I have looked in VFC previously, but I am by no means fashionable, so I tend to stay away from pretty much anything clothing related. Nike is more in my area of competence due to spending so much time among amateur athletes. The yield has kept me out of that (< 2.5), however I have been pondering recently whether or not that is a worthwhile constraint on investments.

    I haven't done much with Loyal3 lately, but this month is my big dividend month! So I will get to add a few shares of something!

    Take care!

    • I am not fashionable either, but that is because I hate shopping and spending money frivolously. Fortunately there are millions of other folks who do that for me, and VF Corp has shown a great propensity to pass the resulting growth on to shareholders. As for NKE, the yield isn’t ideal, but the future growth prospects are quite tantalizing. When you look at my overall Loyal3 portfolio and my recent additions over the past couple of months, you will see I’m starting to build a base of higher growth positions. These provide a nice balance for future capital and dividend growth in comparison to higher yielding positions.

      I’m looking forward to March as well. Records will be set. Thanks for stopping by ILG!

  6. I think some of the strengths of Loyal3 are not only the fact that they have no fees, but that you can invest with as little as $10. If you are starting off as an investor and you really don’t have much capital to invest with, Loyal3 is a great place to start. If you had $100 to invest, you could put it into 10 different stocks if you wanted with no fees to reduce your capital. If you were to open an account with a different brokerage account, your capital of $100 would be quickly reduced by 5-15% (depending on the brokerage). The only downsides of Loyal3 in my opinion are the inability to place limit orders, a limit on how much you can invest per stock, no DRIPs except KRFT and Frontier Communications, and limited selection of stocks. For me personally, I think the pros outweigh the cons.

    Nice additions to your Loyal3 portfolio; it’s growing at a good pace.

    • In many of my purchase updates I’ve discussed the wide range of positives associated with Loyal3. Access to IPOs, no fees, $10 transactions, etc. are all items that have appeared. There really is plenty to offer an investor, especially one without a ton of cash to invest with at one time. Unless you sign up for an auto-invest at another brokerage/fund company, you will not be likely to find a place to invest without substantial fees.

      Thanks for sharing your thoughts and stopping by ACI!

  7. Great looking portfolio you have at L3. If I was starting out today with little capital there’s no question I’d start with L3. Granted they don’t offer up to the second trades etc. and do only batch ordering and only allow investments in certain stocks but the value of $0 commish and the ability to invest $10 or $20 at a time is huge for someone just starting with a lack of funds. L3 enables everyone the opportunity to start to invest in high quality dividend names. I need more VFC in my account too. I haven’t added to that name in a long time and it has been on a real tear in recent months. Thanks for sharing this update.

    • I agree DivHut; the ability to invest small dollar amounts regularly without the burden of extra fees is a tremendous place to start investing. You don’t need much to allow things to grow and snowball on their own. An added bonus for folks like me is the opportunity to invest in some great dividend paying stocks. I can only wish I’d loaded up on more SBUX, NKE, UL, TGT, PEP, and beyond, early last year.

      VFC dipped nicely at the end of January into February, and I’m glad I was able to average down my overall cost basis as a result.

      Thanks for stopping by and adding your thoughts DivHut!

  8. You purchased some great businesses this month, congrats. I’m so jealous you’re representing so many consumer stocks here, I’m severely lacking them at the moment. Onto March, keep up the great work!

    • Some solid companies, and at fair value in my opinion. I, too, was lacking in the consumer side of things, and Loyal3 has actually helped me to balance things out. A little here and a little there has helped my portfolio have a 25% allocation to consumer goods/services. Diversification is king.

      Thanks for stopping by Ryan!

  9. Another nice month of Loyal3 purchases. The Loyal3 batch trading argument is pretty much the same as whether you should DRIP or not. You might not get the exact price that you deem to be fair value but the commission costs help to negate that. As long as you set your buy orders when the companies are near fair value does it really matter in the long term whether you paid $40 for shares of KO or $41.25? Plus most of these companies don’t make huge moves in either direction on a regular basis so the price is fairly consistent over the short term. After all anyone’s fair value is just an estimate. You can’t figure out what the true fair value is unless you have a time machine. I think another positive is that it allows you to consistently invest some capital every single month. For those with limited capital on a monthly basis it could mean waiting 2-3 months at a time to be able to make a purchase. Similar to the Dave Ramsey debt snowball where you pay off the lowest balance first, even if it’s not the best way to pay off your debt mathematically, because it helps to build momentum. There’s nothing worse than going head first into something and then having to sit on your hands for a couple weeks or months because you aren’t able to pursue it. And for those with a lot of investment capital each month it’s also good. In most months I couldn’t find 3-5 companies that I felt comfortable investing a normal purchase amount in. Loyal3 allowed me to still invest a little bit each month. It has its pros and cons but I think it’s definitely an option for a lot of people. Motif is another “alternative brokerage” that I’m interested but need to check it out a bit more.

    • JC, you’ve affirmed many of my thoughts and feelings towards Loyal3. They aren’t the be all, end all, of brokerages, but they do offer value to folks, especially those without a ton of capital to invest. I know I’ve been happy with the process thus far in conjunction with my traditional brokerage account, and will continue to add to both over the course of the year.

      I haven’t checked out Motif yet, but given the large commission, wouldn’t feel comfortable investing with less than $2,000 per transaction. That’s a pretty big pill to swallow for those investors who aren’t in a position to drop that sort of capital in the markets on a regular basis.

      I appreciate you stopping by JC, I hope Lucas is doing well!

  10. W2R,

    Thanks for giving the rundown on our conversation there. To be fair, I think Loyal3 has some redeeming qualities. Though, Computershare has essentially offered a similar service (the ability to buy high-quality stocks for little money and no costs) for quite a while now for those just starting out with little money (and a greater selection). And my comments weren’t aimed just at batch ordering in general. I was also pointing out that a number of comments around the web were relating to people noticing that orders were getting filled at higher prices down the road. Whether those are completely objective reviews are not is difficult to say. But no point in rehashing old news.

    Looks like you picked up some solid companies there. I’ve heard a lot about Under Armour taking on Nike, but the latter “just does it”. :)

    Best regards!

    • I’m a big fan of what Computershare does, however most of the offerings there have some level of fees, either to buy or sell, or both! The selection is phenomenal however, and I’ve thought about picking up a couple of DRIPs through them, but the extra legwork required just wasn’t worth it to me. As for the fills discussion, I left it out because it wasn’t worth rehashing as you’ve said. Plus, if you read something online, it MUST be true! ;)

      I’m very familiar with Under Armour (know many employees), and the ambitions are certainly there. They’ve come a long way since shirts out of the trunk of a car. However, I don’t think their growth will overly hinder Nike. The sporting goods market is huge and still growing. I only wish I’d known about the markets leaping the second half of February so I could have loaded up even more. Such is the life of someone who can’t time the market.

      Jason, thanks for the visit, the comment, and supporting the blog.

  11. W2R,

    Thanks for the post. I am long most of the same companies you are via Loyal3, but we do have a few we differ on. The service they provide is excellent, but at some point once the account is large enough the plan is to combine it with my traditional account. The only catch is when you do that they cut off the fractional shares and give you cash for them. That should result in a taxable scenario, but that should not be too big of a deal in the long run.

    I’ve also looked into Robinhood, but am not a fan of it yet. Investments are free and there are no limits on the stocks. However, you have to use an iPhone/Pad/Pod to make the moves and if you move the account out of Robinhood they charge $75. Since I’m already in Loyal3 and my standard accounts, I cannot justify spreading the wealth even more thinly.

    Thanks for the post,

    • At this point I don’t have any plans on transferring my holdings out of Loyal3. I do envision a point a few years from now where I’ll slow contributions to this account and allow the dividends to fund future growth.

      With Robinhood, my biggest issue is the lack of a web-based interface. I don’t own an iPhone or other iOS device, and wouldn’t be best served by buying a device just to use them. And as with any ‘free’ service, there are catches. The batch trading is a downside of Loyal3, the fees are something Robinhood has. Finally, I have doubts about their long-term viability given they are essentially a mondern reboot of Zecco from years ago. Loyal3 has other revenue sources outside of margin interest, where Robinhood is more limited.

      Thanks for the visit and sharing your experiences!

  12. I personally think Loyal3 offers a fabulous service for the limited slate of stocks they sell.
    I get a big kick out of taking the $10 I saved off the grocery bill by looking for sales and then buying stock. It almost seems like game sometimes finding the next $10 and it’s fun watching the money accumulate.

    I tend to look for a reasonable P/E ratio and then at the Dividend Yield, but I exclude companies that are paying dividend rates higher than their current earnings because that likely isn’t sustainable in the long term.

    I have all the stocks that Loyal3 offers loaded into a Yahoo Finance portfolio and then sort the offerings based on those fundamental columns looking for what seems to be the best buy at the moment. I have to tell you, many of the stocks that I’ve ended up with using that method are the same stocks you seem to be buying. I also have a few gut feeling stocks that we’ve bought from Loyal3 … Berkshire, Google, Alibaba (husband’s pick). I think it will be interesting to watch how it all plays out over the long haul.

    As for timing, we also have a few DRIP plans set up such as Exxon and some utilities. It can take nearly a month to get one of those set up and sometimes a week or so between the money coming out of our checking accounts and then finally seeing the stock added to our accounts. Compared to DRIP plans, Loyal3 is incredibly speedy. You only have to wait ONE DAY! It actually wouldn’t surprise me to see more companies abandon the DRIP plan model in favor of Loyal3 or similar brokerage companies in coming years.

    • I agree – it is a great tool for young investors or those without a ton of available capital to invest. The idea that immediately sending the $10 you saved over the Loyal3 to buy shares of Coca-Cola, Pepsi, or Unilever is pretty exciting. That is $10 that will likely pay dividends for the rest of your life, literally and figuratively.

      Like yourself, I keep track of things in an online ‘portfolio’, mine happens to be in a Google Spreadsheet, but the purpose is the same. I track yield, P/E, 52-week high and low, and more. Gives me a dashboard into seeing some of the core fundamentals of the 20 or so companies I would be possibly interested in at Loyal3. I’ve yet to take a flyer on BRK or any other non-DG stock in Loyal3, but I have a feeling that might change at some point this year.

      It is funny to think about the trading at Loyal3 being fast, but you’re right, compared to traditional DRIP brokers like Computershare, Loyal3 is fast. It wouldn’t hurt my feelings if Loyal3 could convince another 100 or so stocks, especially dividend payers, to transition over!

      Thank you for the great comment and for sharing your Loyal3 experience. Always a nice value-add to blogging to have readers like you share!

  13. I love the idea of Loyal3 and its the wave of the future. Especially for people getting into investing. Thanks for the update!

  14. W2R,
    Interesting topic that you and DM had over there, I had to go back and read the whole thing. I am an L3 customer but I stopped using their service coz I noticed that 3 out of 4 purchases I made is on the high side, only 25% of the time that I able to purchase lower price on the batch order. I mean I don’t mind it, might just be a coincidence but cutting the credit card usage put me on the sideline.
    But right now seeing your L3 portfolio had nicely build up it seems its working very nice for you.
    Take care,

    • That’s interesting that you saw that 3 out of 4 were made on the high side. I’d love to see some examples of what you experienced, since after some careful tracking over the past year, this has not been the case for me. The ‘strike’ price as almost always been what was expected or anticipated based on the timing in which the transaction would have gone through. At the end of the day, you have to stick with what makes you comfortable. The loss of the credit card option was a big hit for some people, as losing the +1% of additional kickback was the only difference maker for them in regards to Loyal3 adding value.

      Thanks for sharing your experience and stopping by FFF!

  15. Some great companies in that list. I have MCD in my portfolio and I have been looking at Nike. Everybody at my work wears their stuff so it will only be a matter of time before I add them to my Loyal3.

    • I like NKE a lot, especially down around $91 per share, and wish I’d kicked another couple of hundred bucks in earlier in the month when prices were depressed.

      Keep on building and you’ll hit that $40k mark for your investments in no time!

  16. W2R,

    You’ve brought up a lot of great points with regards to fair value and brokerage commissions in your discussion with Jason. However, I still feel Loyal 3 or any other batch purchasing service is a great way for beginning investors to quickly build and diversify a portfolio.

    Since we don’t have a similar offering over here in Belgium, I was really happy to get about six months’ worth of free trades when I signed up with my new broker. It allowed me to quickly diversify. Now it’s back to €1,000 purchases at minimum!

    Also, great purchases once again!


    • Batch trading has been around for a long-time, with every DRIP program that has ever existing leveraging it to reduce costs. Loyal3 provides the same service, but faster, and at no-cost. A nice improvement when looking at some high-quality companies like KO, PEP, UL, and more.

      Any time you can get free trades is a win in my book! I’m with you on the $1,000 purchases. For me this gives me less than a 50 basis point expense, which isn’t bad at all.

      Thanks for stopping by!

  17. Hi Adam,

    I have to say that I am quite impressed with the portfolio that you are building with Loyal3!

    Some nice positions for sure.

    Anxious to hear if Coke is a direct repurchase based on the dividend of $10 or more. I have high hopes that it is.

    Please let me know!

    Best regards,


    • Thank you sir! It has really added up in no time! I’ll be sure to let you know if any of my positions reinvest directly. Given that my KO position isn’t big enough, you’ll have to let me know for that one.

      Always great to have you reading Ray!

  18. Nice purchases! I’ve been buying $25/month of BRK-B, UL, and DIS. It doesn’t seem like much each month but it is really cool to sign in and see what the account is now up to. Those contributions plus appreciating values of the stocks really work wonders. I still think it is a very valuable service despite no longer accepting credit cards.

    • At some point I’ll have to add some BRK.B. I think they will become a tremendous dividend payer in the future, and accumulating shares now isn’t a bad way to go. Just have to absorb the lack of dividend until later. Just one more reason to love Loyal3, no fees to DRIP into a great company like Berkshire.

      I’ve been surprised by how much appreciation has impacted even my small portfolio. Overall it is up 8%, which is pretty remarkable given the short time frame I’ve had assets in there and the fact that most of the money has been invested over the last six months.

      Thanks for reading Scott, always good to have your share your thoughts.

  19. Hi W2R,

    It’s interesting about the batch purchasing and generally slow processing for these “hyper discount” brokerages. You and I previously mentioned this as well on my post where I reviewed Robinhood Financial on my blog ( and noted the same thing–trades process in a few minutes rather than nearly-instantly, and any sales/deposits take a full 3 business days to clear. The “free” trading is great for those of us who like to buy and hold, but it’d be painful as heck for someone who wanted to use it for low-cost day trading (or even week-long position trading).

    Maybe they’re doing us a favor and forcing good habits on us ;-) I know that when I first got to RH I was tempted to do a little day-trading, but seeing my money sit in the clearing house for a week cured me of that pretty quickly.

    Keep on saving,

    • The three-day hold is actually pretty standard at most brokerages for new deposits. I use TradeKing for my traditional-style dividend growth accounts, and there is a ‘soft’ three-day clearing period on stocks sales. This is because they don’t want you withdrawing the money without the transaction clearing. They will allow me to reinvest into a new position, since that is easier to liquidate if need be.

      With Loyal3, I don’t even transfer the cash in manually, and it takes only a day or so for a transaction to process from start to finish. It used to take a day or two longer but they’ve reduced the time.

      As for forcing habits, if you look at either brokerage, they don’t benefit from frequent trading by users. The more frequent the trades, the more expensive it is to operate since trades cost money and they aren’t charging fees. Given the lack of revenue sources for Robinhood, there seemingly extra long holds are most likely a means of throttling transaction volume.

      Thanks for sharing your thoughts Charles!

  20. Nice purchases for the month! Looks like you found what works for you! Great to hear :)

    • Thanks DivGuy! I think there are some nice perks of having a ‘side’ portfolio as robust as this one. Depending on how things go, I can see this growing into its own animal over the years.

      I appreciate you reading and commenting today!

  21. Nice purchases W2R. Just like you, I have another account at Sharebuilder where I have weekly purchases in small amounts. This account is aside from my Scottrade account where I make bulk purchases (~$1500) as and when feasible. The good thing about the weekly purchases is that it has allowed me to build a reasonable sized portfolio with small purchases on a weekly but consistent basis. My sharebuilder portfolio is now worth over $8000 in a span of 6 months and is having a decent dividend payout.

    • Sharebuilder has been a great asset to many DG investors, allowing them to invest smaller amounts into each company with a fraction of the cost of traditional purchases. I enjoy being able to split between traditional and ‘side’ portfolio purchases, and the goal is to turn both of them into nice looking assets that work together to generate some serious passive income.

      Thanks for stopping by DGJ!

  22. I see the pros and cons of using a service like loyal3. At the end of the day though, I agree with the point that getting the price of a stock tomorrow versus the price today isn’t a huge deal. These are large, well run companies and buying a few shares for $0.20 more isn’t going to be material in 50 years when you total everything up. Everything has its drawbacks. As long as you are aware of them and they aren’t an issue for you, then it makes sense to use the service/product.

    • Loyal3 definitely has some pros and cons, no doubt about it. People have been leveraging DRIPs for decades, and Loyal3 offers a cheaper spin on the same concept for several great companies. Just makes sense for me and the ‘side’ portfolio I have going.

      Thanks for your thoughts and welcome to the blog!

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