Starting Fresh – Rebuilding a dividend portfolio

Starting Fresh – Rebuilding a dividend portfolio

My goal as a dividend investor is to retire using dividend income to cover the majority of my expenses. It should come as no surprise that it was very difficult for me to wipe out my portfolio near the end of 2012 to help fund a down payment on a new home. It was tough but in the long run I hope it will be worth it. I know that my growing family (so far just one daughter) will have enough bedrooms and living space as we continue to expand.

Unfortunately though that meant that my after tax investment portfolio was almost completely wiped out. My wife and I wanted to be sure we could put 20% down on whatever house we bought and I always knew my dividend portfolio was on borrowed time.

After making a down payment, paying for moving expenses and a few costs that come with every new home my portfolio is down over $100k and now stands at a $30k, a mere glimpse of where it would be had we stayed in our tiny little condo.

That money is not gone of course. Most of it is now represented as equity in a home I plan to own for a very long time.

What’s Next

As I said earlier I have $30k leftover and a lot of it is in cash. As we all know cash has not been a great place to be so far in 2013 and I’ve missed out on a few gains. I am hoping the market is overbought, as I alluded to earlier, but it’s hard to tell. From a valuation perspective stocks are not overvalued thanks to the Fed devaluing the dollar.

Because I’m a long term investor and not a trader I am not very worried about timing the market. I like a discount as much as the next guy but looking out over the next 20 years means I don’t have to worry about day to day fluctuations. It’s time to start dipping my toe back in.

I have my eye on a couple of REITs that have not been overbought and a few traditional dividend plays that I’ll be moving into sometime soon. And of course I’ll be working off of the HPR Dividend list to help me identify stocks I want to own.

Stay tuned for a couple of posts on what I’m buying and why. I’ll look forward to hearing what readers think on the dividend stock buys I make.

4 Comments

  1. One thing I struggle with is the idea of some day needing to sell off part of my dividend growth portfolio to fund some purchase. I think you can feel comfortable that you used that money to put a down payment on your future home rather than spending it frivilously on a nice vacation or fancy car you don’t really need. Also, like you said you now have that value in equity so it’s not like it just completely dissappeared off your balance sheet.

    For me it is sometimes difficult to spend money. I think I have a game or a challange of trying to save and invest as much as I can and watch that value build up in my accounts. It is important to remember to also have fun along the way and enjoy life which sometimes means spending some money.

  2. Dividend Ladder

    Yes the meaning of life is not to accumulate money for the sake of having money. That is for sure.

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