Plan For Sept – Be Sloth-like

01 Sep 2018 18:18

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The month of August produced some surprising gains in the markets and it has left me in a tough spot. Every single stock I am watching is at least 10% away from my buy price and not even worth publishing my list this month. Even with a couple days ending August on the downside did little to soften prices.

Stocks with current and historical high dividend growth (greater than 7%) are getting expensive and I hate investing for the sake of investing knowing I’m not getting the yield & growth that I want. This is not to say there are no decent companies to buy it is just that I already have full positions or something in that sector already in my portfolio. Abbvie (ABBV), IBM, Prudential (PRU), and Dominion (D) are all reasonably priced with yields above 3% and decent growth rates but I own the first 3 and already have a full position in utilities via Brookfield Renewable (BEP) so D is out.

One stock that is starting to look tempting is Illinois Tool Works (ITW) which is sitting nears its 52 week low and after a massive 28% increase in dividends announced on August 3rd is getting interesting and is a nice alternative to Fastenal (FAST) on my watch list. With the recent dividend increase this brings the dividend yield to 2.88% which is pretty close to my minimum 3% yield. However, that means I would have to wait a year for the next dividend increase to put me over my 3% target if I bought at today’s share price.

On the REIT front is there anything that hasn’t shot up in price? I really misjudged this sector, back in March I really thought REIT prices would remain depressed for the remainder of the year due to rising interest rates. At that time there was no rush to build a big position as I thought the opportunities would be available throughout the year.

With everything outside my buy zones the only thing for me to do is embrace a sloth-like investing style. I’ll make my monthly cash deposits into the appropriate brokerage accounts, maybe nibble on some ITW and take it nice and slow just watching the markets.

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