For those of you new to this website, in this post, I will discuss the recent changes I made in my dividend portfolios and also discuss about my portfolio diversification strategies.
It’s been a very month, I spend most of my time outside of home as weather looks so great so far. We are almost in middle of summer. We only have few weeks to enjoy the sun. Life is short, I am making it more sweet.
Two months ago, I developed my own diversification strategy to minimize to the investment risks and decided to make new stocks purchases to meet the targeted assert allocations.
I had enough room to purchase some instrus
In June 2015, In June, I had enough room to purchase some industrial and real-estate stocks. Thus, I made the following purchases in my Canadian dividend portfolio.
- purchased 100 shares of BAM.A at $42.69
- purchased 68 shares of REI.UN at $26.86
I will update the portfolio pages with these changes.
I did not make any major changes in my U.S dividend portfolio
Now, let’s look my portfolio diversification.
I’ll 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.
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
In June 2015, the Canadian portion 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%||7.31%|
|Energy & Materials||5%||5.11%|
|Miscellaneous & Preferred shares||5%||6.18%|
|International & Diversified ETFs||10%||1.82%|
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!. But, the percentage is little down from the last update due to the recent purchases in other sectors.
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?