My June investment income went down to $89.47 from $96.83 in April, I didn’t calculate my investment income in May. The decline is because I didn’t add to my investments and the stock market went down quite a bit. It wasn’t a good time to own BP. I should have sold my shares sooner but I didn’t realize just how big of a disaster the oil spill was. I won’t be adding to my investments this month either but my investments have recovered a little so my investment income should go up a little. This is a little frustrating since I was looking forward to getting over the $100 mark but as soon as I’m able to start adding to my investments I should reach the $100 goal.
Disclaimer: This is not my actual investment income. To get this figure I first add up my retirement savings, emergency fund, and any other money I consider permanent savings. What the total of my savings would earn at 6% interest for a month is my monthly investment income. My goal is to get this amount to $1000 a month. If I have $1000 in monthly passive investment income I will be able to retire early.
I sold my BP and bought RDS.B instead. It was a cut in income, but at least it is some income.
That would have been a good choice. I just added the proceeds to my position in UHT so now I am not quite as diversified as I was. I’m hoping I will be able to start building up my portfolio again later this year.
Diversification is very important for me. I had one cut in 2008, 2 cuts in 2009 and 1 so far in 2010. If my portfolio consisted of 10-15 stocks I would have been very unhappy. Luckily with almost 40 stocks I have been able to not only ride out dividend cuts and suspensions but also to grow my income ( before accounting for reinvestment or new money)
I understand what you are talking about. My portfolio has 12 stocks right now and I would prefer to have more but I don’t want to buy them in too small of a quantity. My goal is to have 15-20 stocks rather than 40. I think that will provide sufficient diversification and keep my portfolio easier to manage.
Well if most of the stocks you own are high yielding, pass through entities such as MLP, BDC, REIT, CanRoys, US royalty trusts OR you own shares in companies in Utilities and Telecom which have high payout ratios, then you might be asking for trouble 😉
There are approximately 10 sectors in the S&P 500, and I wouldn’t consider myself diversified unless I had representation in all of them plus some international exposure. And of course speaking of diversification, in a 20 stock portfolio that has exposure to oil sector your risk could be higher if you picked BP than in a 40 stock portfolio 😉
Well, why are you concerned about position size of the shares you own? If your portfolio is over $25K and you use Zecco you get 10 free trades/month. The main point of diversification is to ensure portfolio longevity.
Looking at the sectors I’m not sure where some of my stocks fall but I think I have most of the sectors covered. I need to add a telecom stock and I have been considering Verizon and AT&T so that will probably be my next stock purchase. I do plan to diversify more, just not to the extent that you are.
My portfolio has a way to go before I reach $25k so I do need to consider the cost of stock commissions right now.