Let the snowball grow! Just a month and a half after deciding to up my monthly capital infusion into my Loyal3 portfolio to $500 per month for the remainder of the year, I was thisclose to putting in $700 this month and carrying that forward. Investing regularly is addicting, especially when it is as simple as Loyal3 makes it. With plenty of solid options, and more coming as time goes on, for a dividend growth investor, the ability to invest with as little as $10 per transaction and NO transaction costs is just sweet. Of course the icing on the cake is the ability to utilize your credit card to make the purchases and pick up the credit card rewards as you arbitrage the system.
So whether or not I put $500 or $700 in per month, my goals for this portfolio remain the same. Find whatever I view as the best values each month and invest in them, effectively dollar-cost averaging into a variety of position. By doing this, I benefit not just by putting money into the markets regularly, but by building a portfolio with smaller investment amounts without worrying about bigger buys due to transaction costs.
As I mentioned above, Loyal3 allows investors to invest with as little as $10 dollars, per transaction, in 60 different companies. Of the 60 companies, 25 of them appear either on David Fish’s Champions, Challengers and Contenders (CCC) list or are near additions to the list. For those unfamiliar, David’s list tracks those companies who have raised their dividends in excess of 25, 10, and 5 years, respectively.
For the month of September, I made purchases of two different positions, both of which I already held in my Loyal3 account. As a bonus, I was able to purchase an extra $25 this month as a result of dividends earned during the month, giving me a total of $525 of newly invested capital.
September Loyal3 Trades
Purchased Mattel (MAT): A dividend growth stock with five consecutive years of increases, MAT most recently raised their dividend by 5.6% back in February. This increase adjusted their annual payout from $1.44 to $1.52 per share. During this latest purchases, I allocated $275 of my $525 to MAT, with most of this being invested in the first week of the month. I picked up a total of 8.0276 shares at an average cost basis of $34.26 per share. Because MAT has seen some significant weakness over the last couple of months, these purchases were below my existing cost basis of $36.57 per share. Given the current dividend, my yield on cost for these additional shares is 4.44% and adds $12.20 to my forward 12-month dividends.
Purchased McDonald’s (MCD): A true Champion in every sense of the word, MCD has been raising their dividends for 38 consecutive years. MCD is a truly global company with more than 35,000 restaurants in over 100 countries around the world serving millions of people each and every day. Recently, the stock has seen some weakness as same store sales have struggled and earnings projections have been adjusted. However, given their strong track record and ability to dominate the fast food industry, I am still looking to build out a position. Utilizing the remaining $250, I purchased 2.6855 shares at an average cost basis of $93.09 per share. Including the recent 4.7% increasing from $0.81 to $0.85 per share, my yield on cost for these additional shares is 3.65% and adds $9.13 to my forward 12-month dividends.
September No-Cost Dividend Portfolio 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 transactions were made with my credit card or dividends received in the account. For those that utilized the credit card I did not receive any additional fees for the transactions, thus successfully arbitraging the process for credit card rewards one more time. September’s purchases resulted in a total increase of $21.33 to my forward 12-month dividends and carried an overall average yield on cost of 4.06%.
My total no-cost dividend growth portfolio with Loyal3 still consists of seven holdings, but now with a forward 12-month dividend total of $121.81. The full details of this portfolio 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: Peter Miller