DRIP Portfolio Update

29 Aug 2015 21:40

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The month of August closed with a market correction and another dividend grower has dropped enough in price to make me change my dividend status to DRIP.

Procter & Gamble (PG) is down 22% YTD. With the dividend yield at 3.7% it became the latest item to be added to my DRIP portfolio. I'm not shocked as I expected volatility as the market moves closer to the possible September Fed interest rate increase.

I still anticipate this list to grow due to volatility and already seeing new candidates with Omega Health (OHI) and General Motors (GM) whose prices have not participated as well as other companies when markets recovered after the correction.

I would also like to take this moment to share some information I learned about my brokerage DRIP policy from Fidelity which I am assuming is similar to other brokerage houses. On the third day of market declines during the correction I had two stocks that DRIP'd. When I calculated the share price they were 10%-12% higher than current prices so I contacted Fidelity who explained the DRIP purchase policy as follows:

With the Fidelity Dividend Reinvestment Plan we identify all customers that will be reinvesting their dividend in the security, and then go to the market to purchase shares three business days prior to the payable date. We purchase as many shares as possible on a best-efforts basis, determine the average share price, and reallocate these shares proportionately to the customers that are reinvesting their dividend. This process typically results in a different reinvestment price than the price that the security is currently trading.

Holding DRIP Start
CMI - Cummins Jun 2015
HCP - HCP, Inc. Jun 2015
MHLD – Maiden Holdings Mar 2015
MSFT - Microsoft Mar 2015
QCOM - Qualcomm Mar 2015
THO – Thor Industries Mar 2015
New PG - Procter & Gamble Aug 2015

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