16 Jan 2016 13:22
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The start of 2016 has been a constant ride down in the markets leaving most (if not all) portfolio balances seeing red ink. Listening to all the talking heads in finance it has suddenly become cool (in a sick sadistic way) to be negative on the market. It is like they are begging the bear to come out of its cave! As bad as it may sound this has materialized opportunities for my DRIP Portfolio.
To start I added Domtar (UFS) to my growing list. Domtar has consistently been trading below $40 for all of December and early January’s drop to the low $30s just makes it all the more enticing. Like any capitalizing investor, I grabbed the chance to re-invest at a yield near 4.8%.
Domtar was not my only DRIP benefactor, insurer Maiden Holdings (MHLD) price drop came right during a DRIP payment. Maiden’s 2016 DRIP netted an additional 3.17 shares versus 2.633 last quarter or an increase of 20% more shares. If prices remain stable I will end acquiring an additional 2 shares per year, how sweet is that!
There are other opportunities in my portfolio but I want to wait and see if prices stabilize or we have a bounce back up in prices before I pull the trigger. One of these wait & see stocks is T Rowe Price (TROW), if their share price remains below $68 going into February then odds are they will be the next addition. General Motors (GM) is another candidate whose share price has dropped even after announcing a 5.5% increase to their annual dividend, if their share price remains below $32 this would be the second addition.
Microsoft (MSFT) is still in the dividend dog house. Yes their share price has dropped 10% to start January but unless it consistently trades below $50 a share I believe I can reinvest the dividend in better investments.
| Holding | DRIP Start |
|---|---|
| CMI - Cummins | Jun 2015 |
| HCP - HCP, Inc. | Jun 2015 |
| MHLD – Maiden Holdings | Mar 2015 |
| MSFT - Microsoft | removed |
| OHI - Omega Healthcare Investors | Dec 2015 |
| PG - Procter & Gamble | Aug 2015 |
| QCOM - Qualcomm | Mar 2015 |
| THO – Thor Industries | Mar 2015 |
| New UFS - Domtar | Jan 2016 |
Post preview:
Close previewTROW looks like good choice. I've had this stock on my daily watchlist. If it falls much more I will add more shares.
Yep TROW and quite a few others in the financial sector look good but I'm starting to get overweight in financials. Without upsetting my portfolio diversification it is probably safer to drip in a few shares.