Milestone: Portfolio Value Reaches $100,000

Today my portfolio's value reached $100,000 for the very first time, closing at $100,291.68. It occurred as a result of some large capital gains this week, with two notable examples being MSFT (up 6% today) and NSC (my largest holding, up about 10% this week). This milestone comes just two and a half months after reaching $90,000 in mid-August. My secondary investing goal is to achieve a satisfactory total return on my investments, and a steadily increasing portfolio value is an indication of progress toward that goal.

It was nice to hit the six-figure mark before the end of 2013; quite frankly, I was surprised it happened so quickly. Now that I've crossed that threshold, I think it makes sense to set milestones by larger increments, and $25,000 seems reasonable. Thus, the next milestone will be $125,000. I anticipate reaching it fairly soon because the rollover money discussed in a recent post should hit my Roth IRA in November. It will be interesting to see what my portfolio value will be at the end of the year.

Milestone history for portfolio value:

• $100,000: October 2013
• $90,000: August 2013
• $80,000: March 2013
• $70,000: January 2013
• $60,000: September 2012
• $50,000: March 2012

Update on Rollover IRA

Some readers might remember this post from early February where I talked about opening a Roth IRA. At that time I knew I was going to be moving and changing jobs mid-year, so I mentioned that later in the year I was going to rollover the two retirement plans associated with my previous employer into my Roth IRA. Now that I've settled down financially after my move, I've set the wheels in motion for the rollover.

I've opened a Rollover IRA with Scottrade (the brokerage I use for my other accounts) and I've initiated direct rollovers of the 403(b) plan held by TIAA-CREF and the 401(k) plan held by Vanguard. Once those institutions have verified some information, they will send checks to Scottrade that will be deposited in my Rollover IRA. I was told it would take about 1-2 weeks for that to happen. After the funds are deposited, I will then convert (or merge) my Rollover IRA into my existing Roth IRA. My hope is that the rollover and conversion will be completed by mid-November, at which point I will have a sizable chunk of money in my Roth IRA to reinvest.

The move of pre-tax money into my post-tax Roth IRA will result in the money being treated as taxable income for 2013. Even though I do not like taking a big tax hit, it is a one-time expense that makes financial sense. Using various online calculators, I determined that the taxes I pay now will be much smaller than the taxes I would likely pay on withdrawals from a traditional IRA in 30+ years. By converting to a Roth IRA, I can look forward to making tax-free withdrawals in the future from an account that will benefit from 30+ years of tax-free compounding. Besides, I have already set aside enough money to pay the estimated taxes on the rollover money, so it will not affect my current rate of new capital investment.

I will post another update once the rollover and conversion have been completed.

Stock Split: CNI

Coming on the heels of yesterday's stock-split announcement from VFC, Canadian National Railway (CNI) has announced a 2-for-1 stock split that will take effect by the end of November (news release). Once that happens, I will own 40 shares of CNI at an adjusted cost basis of $37.675 per share.

Dividend Increase and Stock Split: VFC

VF Corporation (VFC) is increasing its quarterly dividend by 20.7%, from $0.87 to $1.05 per share, putting the company on track for its 41st consecutive year of dividend growth (news release). Given that I own 10 shares of VFC, my quarterly dividend increases from $8.70 to $10.50 and my yield on cost becomes 2.90%. The extra $7.20 in annual dividend income raises my forward 12-month dividend total to $2,932. Thus far this year, there have been dividend increases for 29 of the 31 stocks in my portfolio.

The company also announced a 4-for-1 stock split that will take effect by the end of the year. Once that happens, I will own 40 shares of VFC at an adjusted cost basis of $36.25 per share.

Dividend Increase: KMI

Kinder Morgan, Inc. (KMI) is increasing its quarterly dividend by 2.5%, from $0.40 to $0.41 per share (news release). This is the fourth increase from KMI this year, resulting in an overall increase of 13.9% in 2013. Given that I own 165 shares of KMI, my quarterly dividend increases from $66.00 to $67.65 and my yield on cost becomes 4.45%. The extra $6.60 in annual dividend income raises my forward 12-month dividend total to $2,925. Thus far this year, there have been dividend increases for 28 of the 31 stocks in my portfolio.

Dividend Increase: ABT

Abbott Laboratories (ABT) is increasing its quarterly dividend by 57.1% (that's not a typo), from $0.14 to $0.22 per share, putting the company on track for its 42nd consecutive year of dividend growth (news release). ABT was removed from the Dividend Champions list after it split into two companies -- the other being AbbVie (ABBV) -- but management considers its dividend growth streak to still be intact: "This will mark the 42nd consecutive year that Abbott has increased its dividend payout and demonstrates Abbott’s continued commitment to increasing its return of cash to shareholders while investing for long-term growth." Given that I own 45 shares of ABT, my quarterly dividend increases from $6.30 to $9.90 and my yield on cost becomes 3.46%. The extra $14.40 in annual dividend income raises my forward 12-month dividend total to $2,919. Thus far this year, there have been dividend increases for 28 of the 31 stocks in my portfolio. This dividend increase is not included in that total; it actually counts as the first increase for 2014 because it takes effect with the February payment.

A Real Dividend Growth Machine: Q3 2013 Review

A new article of mine has been published on the investing website Seeking Alpha. The article is entitled A Real Dividend Growth Machine: Q3 2013 Review and it provides a review of my dividend growth investing progress in the third quarter of 2013.

Dividend Increase: UTX

United Technologies (UTX) is increasing its quarterly dividend by 10.1%, from $0.535 to $0.589 per share, putting the company on track for its 20th consecutive year of dividend growth (news release). Given that I own 25 shares of UTX, my quarterly dividend increases from $13.38 to $14.73 and my yield on cost becomes 3.30%. The extra $5.40 in annual dividend income raises my forward 12-month dividend total to $2,904. Thus far this year, there have been dividend increases for 28 of the 31 stocks in my portfolio.

Monthly Review: September 2013

September was a busy month at work. Teaching took up a lot of my time, but I also finished getting my lab ready for research and the first experiments were started. I do not have much in the way of lab personnel right now (just one undergraduate student working in the lab on a part-time basis), so I am doing nearly everything by myself. It will probably be this way for the rest of this academic year, then hopefully I will get a graduate student and more undergraduate students working with me. However, it is refreshing and motivational to finally have complete independence and control over my research, so I do not mind being an essentially one-man operation at this point.

On the investing front, here is a review of what happened in September:

Dividends: I received a total of $248.29 in dividends from 11 stocks, as indicated on my Dividends page. This represents a solid 84.6% increase compared with the same month a year ago. My year-to-date dividend total is now $1,765.21, which surpasses my year-end dividend total for 2012. I'm on track to bring in about $2,400 in dividends in 2013.

Dividend Increases: I was pleased to see dividend increases announced for the following stocks (click on each stock to see my post about the increase):

• PM: 10.6% increase, $18.00 more in annual dividend income
• MSFT: 21.7%, $23.00
• MCD: 5.2%, $8.00

These dividend increases are what make dividend growth investing so great. I did not have to do anything to get them -- I did not sell cigarettes, software, or burgers. I did not have to work harder at my own job. I just had to be a shareholder of these companies, which results in me being paid a portion of their profits. Thanks to these increases, next year I'll get nearly $50 more in dividends for doing nothing but continuing to hold the stocks. Thus far this year, there have been dividend increases for 26 of the 30 stocks in my portfolio. The mean increase has been 11.0%.

Contributions: As mentioned in a recent post, from now on I will be reporting contributions of new capital instead of savings. A Contributions page has replaced what used to be the Savings page on the blog. In September I contributed $2,165 in new capital for investment, which was divided between my taxable account and Roth IRA. My year-to-date contribution total is $15,215, which is an average of $1,522 per month. The monthly average is essentially identical to last year's monthly average, which is remarkable given that I went a few months earlier this year without any contributions. Fortunately, a few above-average contributions made up the difference.

Transactions: I made two purchases during the month (click on the transactions to see my posts about them):

• 35 shares of KMI [R]
• 15 shares of XOM

I was happy to take advantage of a dip in KMI to increase my position. I was also pleased to get an opportunity to start a position in XOM. These purchases will increase my annual dividend income by $93.80. My forward 12-month dividend total is $2,814. (My purchases at the start of October have since increased that total.)

Portfolio: My portfolio (taxable account and Roth IRA together) consists of 30 stocks and has a market value of $93,148.24 (including cash), which is a 5.5% increase over last month's value. The unusually large increase reflects strong capital gains and an above-average influx of new capital.

Seeking Alpha: This month I published one new article on the investing website Seeking Alpha:

• Exxon Mobil: The Energy Giant Joins My Dividend Growth Machine

The article managed to get nearly 6,000 page views by the end of the month. I earned $77.76 from page views in September, increasing my Q3 total to $252.70 (to be paid in mid-October) and my year-to-date total to $971.01.

Looking Ahead: October will yield a relatively low dividend total due to fewer companies in my portfolio paying out in that month. I expect dividend increases to be announced by two companies, UTX and VFC. (I had previously anticipated that UTX would make an announcement in September, but I had mixed up my calendar dates.) At the start of October I contributed $2,800 to my brokerage accounts, maxing out the 2013 contribution to my Roth IRA. I also went ahead and invested that new capital right away, doubling my position in XOM and starting a position in WMT. Thus, there will be no more investing activity in October, but I look forward to seeing what the market has to offer in November.

From Savings To Contributions

As some readers noticed, I had not updated my Savings page for a couple of months. The main reason was that my savings could not be determined accurately for a while. Prior to my mid-summer move to start a new job, I had put aside a few thousand dollars because I knew I would not have any job income in July or in the first half of August. During those months I used my savings to pay for moving-related expenses and to cover my living expenses. In mid-August I received some reimbursements for my moving expenses and at the end of August I finally received the first paycheck from my new job, although the paycheck was for only the last two weeks of August. (My new job officially started in mid-August.) At the end of September I received my first full-month paycheck. Consequently, there was a lot of variability in my income and expenses from July to September, making it difficult to determine accurate savings numbers.

Going forward, it will continue to be difficult to determine my savings on a monthly basis because of how I am paid at my new job. My entire salary is paid over the nine-month academic year (I work at a university), which starts in mid-August and ends in mid-May. As a result, I receive a half-month paycheck for August, full-month paychecks for September through April, a half-month paycheck for May, and then no paychecks for June or July. (In case you're wondering, I inquired about whether my salary could be spread out over the entire calendar year, but the answer was no.) Thus, my monthly job income will vary during the year and there will be massive fluctuations in my monthly savings rate, making it an uninformative measure. Moreover, my savings will no longer correspond directly to new capital available for investment because I will be setting aside some of my savings each month to cover my expenses during the no-income months of June and July.

Given that it no longer makes sense to report my monthly savings, I have decided to switch to reporting my monthly contributions of new capital for investment. Up until early 2013, there was a nearly 1:1 correspondence between savings and contributions, but for the reasons discussed above, that will not be the case from now on. Thus, I have replaced my Savings page with a Contributions page that indicates exactly how much new capital I added to my brokerage accounts in previous months. There will be fluctuations in contributions from month to month because they depend on my savings, but I feel this information will be more useful because it is directly linked to my investing activities. I will now be including a note about contributions in my monthly reviews, starting with my September review (which will be posted in a day or two).

Stock Bought: WMT

On Tuesday I bought shares of Wal-Mart Stores (WMT), the largest retailer in the world by revenue. Some of my research is summarized in an article about WMT that was published today at Seeking Alpha.

I bought 25 shares of WMT at the price of $73.44 per share plus commission, giving me a 2.55% yield on cost. At the current dividend rate, I can expect to receive quarterly dividends of $11.75 from this purchase, which will add a total of $47.00 to my annual dividend income. My forward 12-month dividend total increases to $2,899. This purchase was made in my taxable account by combining new capital with accumulated dividends. (In fact, some of the dividends that I received on Tuesday were used for this purchase -- now that's rapid selective dividend reinvestment!) WMT becomes the 31st stock in my dividend growth portfolio.

October got off to a quick start on the investing front, with same-day purchases of WMT and XOM. Those purchases used up all the new capital I had just added to my accounts, so there will be no more purchases this month. I plan to sit back and watch as earnings roll in over the next few weeks.

Wal-Mart Stores: A Retail Heavyweight For My Dividend Growth Machine

A new article of mine has been published on the investing website Seeking Alpha. The article is entitled Wal-Mart Stores: A Retail Heavyweight For My Dividend Growth Machine and it provides an overview of WMT, which I purchased two days ago for my dividend growth portfolio.

Stock Bought: XOM (Again)

Today I bought more shares of Exxon Mobil (XOM), the largest publicly traded oil and gas company in the world. Last week I published an article about XOM on Seeking Alpha that summarized some information gathered during my research.

I bought 15 shares of XOM at the price of $85.90 per share plus commission, giving me a 2.92% yield on cost. At the current dividend rate, I can expect to receive quarterly dividends of $9.45 from this purchase, which will add a total of $37.80 to my annual dividend income. My forward 12-month dividend total increases to $2,852. This purchase was made in my Roth IRA with new capital that maxed out my contribution for 2013. I now have a total of 30 shares of XOM (15 in my taxable account and 15 in my Roth IRA) and I will receive combined quarterly dividends of $18.90.

When my monthly paycheck hit my bank account yesterday, I determined how much money could be allocated toward investments and transferred $2,800 in new capital to my brokerage, of which $1,235 went into my Roth IRA and $1,565 went into my taxable account. When I looked at my watch list today, I saw that XOM was trading slightly lower than where I had purchased it last week, so I decided to go ahead and double my position. I am now satisfied with the overall size of my XOM position, which is about equal weight (in terms of both market value and dividends) with my CVX position.

I also noticed that another stock on my watch list had reached my target price, so I made a second purchase today, using the new capital in my taxable account. It is a new position in my portfolio and I plan to write an article about it soon for Seeking Alpha. In the meantime, can you guess what stock it is?

Update: A few readers guessed correctly that I started a position in WMT. I just finished submitting an article about WMT to Seeking Alpha that will hopefully be published in the next day or two.