For those of you new to this website, in this post, I discuss the recent changes I made in my dividend portfolios and also discuss about my portfolio diversification strategies.
Last month, October 2015, was a great month for my portfolio. Stocks somehow started to recover from the August sell-off.
I did not make any major changes in my dividend portfolios. I just made some purchases using the dividend income I received in October.
The changes made in Canadian portfolio in October 2015.
- purchased 15 shares of PWF at $31.44 – added some insurance companies to hedge against raising rate.
- purchased 6 units of XRE (REITs ETF) in multiple occasions at average price of $15
The changes made in U.S dividend portfolio in October 2015.
- Initiated position in EMR – purchased 10 shares at $46.75
I will update the portfolio pages with these changes in coming days.
Now, let’s look my portfolio diversification.
Again and again, I will be the first to admit that a significant portion of my portfolio is built with Canadian dividend paying companies – most of the companies and their services I use or experience in my daily life.
But, when it comes to diversification I’ll be the also the first to admit that my portfolio is very poorly diversified – geographic wise and sectors wise.
More than 80% of my investments are in Canadian based companies.
So, I have created a diversification strategic for my portfolios to minimize the investment risks.
Portfolio Geographical Diversification
|Country||Target assert allocation||Current assert allocation|
up from last update
down from last update
My Canadian portion of my investments have increased a bit from my last update due to the recent purchases I made.
Portfolio diversification – sectors & fixed income
Actually, I guess there are only 10 sectors, but I have divided my dream portfolio by 15 sectors including fixed income/bonds.
Please note this is not the way professional fund managers or experts diversify their funds. This is my own diversification strategy.
|Sector||Target assert allocation||Current assert allocation|
|Industrials & Infrastructure||5%||7.71%|
|Energy & Materials||5%||5.61%|
|Miscellaneous & Preferred shares||5%||5.84%|
|International & Diversified ETFs||10%||1.64%|
From the above table, you could easily see my poor portfolio diversification. Finance, pipelines and utilities are almost 50% of my total value. Risky! Very risk approach!.
It is a big mistake I made in the past.
I was focusing to acquire more units and collecting dividends, but forgot to diversify my portfolio.
However, I won’t sell holdings from over weighted sector and buy in under weighted sectors. But, I will try to balance my holdings by adding new stocks/bonds in the under weighted sectors.
So, in the coming weeks, months and years my stocks purchases will be focusing on to meet the targeted assert allocations.
This is the first strategy I developed for my portfolio diversification. It will evolve over time with the world economic conditions and my risk tolerance.
I will update my progress every month under the portfolio updates category.
Do you have any diversification strategy? And how often you balance your portfolio?