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 busy 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.
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.
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 |
| Canadian stocks | 40% | 83.23% up from last update |
| U.S stocks | 50% | 14.95% down from last update |
| International stocks | 10% | 1.82% |
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 |
| Bonds | 15% | 0.77% |
| Finance | 10% | 19.94% |
| Industrials & Infrastructure | 5% | 7.31% |
| Consumer Staples | 10% | 7.56% |
| Energy & Materials | 5% | 5.11% |
| Utilities | 5% | 14.17% |
| Pipelines | 5% | 15.09% |
| Consumer Discretionary | 5% | 2.51% |
| Health care | 5% | 0.0% |
| Information technology | 5% | 0.0% |
| Telecommunications | 5% | 7.97% |
| Real-estate | 5% | 4.16% |
| Miscellaneous & Preferred shares | 5% | 6.18% |
| Transportations | 5% | 7.41% |
| 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?
hey thanks for the response
are u investing into a tfsa? if so with who?
cheers
rob
Hi Hutz,
Yes, I am investing into TFSA and RRSP as well.
I am using Questrade for my TFSA account. It is one of the best stock brokerage in Canada. There is a promotion going on now. If you open an account and fund it with $1000, you could get one month free trades.
Other reasons I use Questrade:
1. You could buy ETFs for free
2. Low Trading fee ($4.95 per trade) for stock purchases
3. You could open account in USD and CAD.
4. Very friendly trading platform.
Please feel free to message me if you have any other questions. I am very glad to help you out.
Good luck with your finance journey!!
Disclosure: Please note above is a affiliate link, I will get a commission if you decide to open an account using the Questrade link above (at no additional cost to you).
hey man love your blog check it out every once in awhile. congrats on your house and hitting the 100k milestone
i saw somewhere you recently picked up telus stocks and some others
i personally just started getting into investing. i hold 2 mutual funds with rbc
The canadian dividend fund and also the growth and income fund. they are ok but im losing the management fee right off the top. just got to go into rbc and setup a trading account so i can buy stocks with management fees under a tfsa.
anyways i noticed alot of your didvidend stocks are from the rbc canadian dividend fund and this months commentary they actually said
The top performing sectors in the quarter were
Health Care, Telecommunication Services, and
Consumer Discretionary. Energy prices remained at
low levels through the period, which contributed to
negative absolute returns for the benchmark
heavyweight Energy and Financials sectors.
and then u added telus and some others this month.
do u watch some mutual funds and mock what they are doing or saying? or where do u find the “best dividend stocks to buy”
any help would be great
keep on keeping on man!
cheers
rob
Hello Hutz,
Thank you for stopping by.
I guess you made the right decision to start invest yourself rather than paying high management fees.
I have a watch list of high quality dividend paying stocks. If I find any of the stocks drop value for no reason, and if I have enough money (of course), then I usually add them into my portfolio. I started to invest from March 2012, so I could able to buy some high quality blue-chip stocks at very low price.
As you said, my energy holdings are taking blood bath, and two of my energy holdings (CVE and COS) cut their dividend recently; however, at the same time, more than 25 other stocks hiked their dividend payments. So, all balanced out well.
I invest for long-term, so I don’t worry about short-term market ups and downs.
Cheers,