Sunday, January 1, 2012

Low PE and Moderate Dividend Portfolio - Purchased

Last year we explained the thinking behind the Low PE and Moderate Dividend Portfolio. We also explained that for calculus convenience we set this real life portfolio at $100,000. The latter is not the portfolio's real value, which I won’t disclose – but I do own these stocks as of December 2011.

The data for the $100,000 portfolio is shown below as it was on December 29, 2011 when the last purchase was made. We will update the portfolio progress quarterly.  Portfolio re-balancing (i.e. re-invest the dividend income, reset each holding to 10% of the total value and replace holdings that no longer meet the portfolio criteria) will be done near the end of 2012.

Please, note that upon rechecking the data, it was discovered than Canfor Pulp did pay a much higher dividend yield (13.4%) than our screening data allowed (2-6%). Consequently, It was not included with the portfolio. The idea of not including stocks of the lowest dividend decile (1) was that extreme dividend yields often indicate distressed companies and thus present too much risk for our purposes.

To enlarge, click on the table

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