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.
Stock markets around the world were volatile due the uncertainty of Euro economic situation – Brexit, but my dividend portfolio did pretty well compare and ended with gain.
Most investors usually get panic and sell their holding in uncertain situation. They react so fast and sell at low, in most case. Long term investors take this as opportunity and build up position with their favorite stocks.
As usual, I didn’t make any major changes in my portfolio. I just sold a minor position in Enbridge (just 9% of ENB holding) because the total holding has grown over $15 000 so I just wanted to take some profits and minimize the risk.
Enbridge (TSX:ENB) is my largest position in my Canadian portfolio. I added 25 units in December for $43.06 when it price was depressed along with other energy stocks.
Lately the price rebounded sharply and moved above $55. So, I decided to take a little profit and sold 25 units for $55.
ENB is still the largest position in my portfolio even after the sale of 25 units.
I may sell another 25 units if the price move up above $60 or buy 25 units if the price move down below $50 again.
I will win in both scenarios 😀 .
Again, I usually don’t sell stocks that I own, but I just wanted to minimize the risk.
Now let’s see the recent changes in my dividend portfolios in June 2016.
Please note this is not an investment recommendation website and I am not your financial Advisor. I am just sharing my personal financial journey with this website readers. I strongly recommend you to discuss with a financial professional before make any investment decision.
The changes made in Canadian portfolio in June 2016.
- SOLD 25 units of ENB at $55.00
The changes made in U.S dividend portfolio in June 2016.
I have updated the portfolio pages with these changes.
Now, let’s look my portfolio diversification.
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 will 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. Now I stopped adding Canadian stocks in my portfolio. I am planning to concentrade in adding U.S stocks in my portfolio.
I have created a diversification strategic for my portfolios to minimize the investment risks, but I am not following my own strategic as I am still in asset accumulation stage.
Recent changes in my diversification strategic
In March 2016, increased my fixed income target asset allocation to 20% and reduced International stocks target asset allocation to 5%.
January 2016 – I have included my employer pension into fixed income category. The contribution I make into ,my employer pension plan is part of my assets, and it will definitely fit into the fixed income category.
Portfolio Geographical Diversification
| Country | Target asset allocation | Current asset allocation |
| Fixed income (bonds and pension) | 20% | 3.71% |
| Canadian stocks | 40% | 80.65% down from last update |
| U.S stocks | 35% | 14.91% up from last update |
| International stocks | 5% | 1.45% |
My Canadian portion of my investments have decreased a bit from my last update due to the sale in ENB units.
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/employer pension.
Please note this is not the way professional fund managers or experts diversify their funds. This is my own diversification strategy.
| Sector | Target asset allocation | Current asset allocation |
| Fixed income (bonds & Employer Pension) | 20% | 3.71% |
| Finance | 10% | 18.47% |
| Industrials & Infrastructure | 5% | 8.60% |
| Consumer Staples | 10% | 6.96% |
| Energy & Materials | 5% | 3.83% |
| Utilities | 5% | 14.76% |
| Pipelines | 5% | 12.92% |
| Consumer Discretionary | 5% | 3.11% |
| Health care | 5% | 0.0% |
| Information technology | 5% | 0.16% |
| Telecommunications | 5% | 6.67% |
| Real-estate | 5% | 8.74% |
| Miscellaneous & Preferred shares | 5% | 4.69% |
| Transportations | 5% | 5.93% |
| International & Diversified ETFs | 5% | 1.45% |
From the above table, you could easily see my poor portfolio diversification. Finance, pipelines and utilities are almost 50% of my total value. It is very risk approach!.
It is a big mistake I make now. But I have no choice as I am unable to move my Canadian dollars into U.S market to diversify due to the currency exchange rate.
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 units in the under weighted sectors.
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.
Many readers asked me which tools I use for all these calculations.
Actually, I use Google Sheet which is available in the Google drive. It is free. All you need is a Google account.
Google Sheet is very similar to MS Excel but you could pull the stock market data from Google Finance to do all the calculations you need.
Please share your thoughts about my holdings and recent purchases. Also, doo you have any diversification strategy? And how often do you balance your portfolio?
Hi,
I have the same issue with regards to asset mix breakdown. I’m about 76.1% Canadian and 19.3% U.S. I would like to have way more U.S. in my portfolio. I’ve been slowly increasing my purchases into Tech and an ETF VFV
I’m a heavy weight in Canada for the dividends.
Check out my recent mix http://retirementrush.com/blog/
Title of the blog is Sector and Asset Mix Review for August 2016 | What’s your mix?
You asked about plans on diversification. I only started selling some stocks this year that had 30% gains and if I was holding a few hundred shares so I could keep some. Reason being I had a few stocks that were 80% gains and I never took anything off the table to re-allocate to some other sectors that were beaten up. Also since I’m still acquiring shares I’m not doing a lot of “re balancing”
Hello Blake,
Thank you for stopping by,
Wow, you have a huge portfolio. Awesome Black!
Glad to see we both making similar mistakes in asset mixing. I am looking to re-balance my portfolio without selling any.
Best Regards,
I’m 17 and want to start investing in stocks which have dividends any advice you can offer ?
Hello Tanvir,
Thank you for stopping by,
I don’t provide any advice. I am not a licensed financial advisor. I would suggest you to learn as much as you can about investing in stocks or contact a qualified financial advisor to discuss.
Only advice I can give is – DO NOT get financial advises or get stock recommendations from anonymous bloggers like me. I would say just learn as much as you can from other people successes and mistakes, and make you own financial decisions.
Best Regards,