3 stock positions increased, 2 reduced

Just another day in YARP dividend investing paradise!

I’ve been trying to find one word that describes the environment that exists right now for the YARP dividend investing style. After all, the stock market at large is either can’t make up its mind too focused on one company (Nvidia) or grappling with the eventual negative aspects of “indexation.” That’s the huge increase over time of money that eschews stock picking in favor of “owning the market,” which makes it so that a lot of traditional fundamental analysis no longer works.

How’s that discounted cash flow estimate of XYZ’s fair value going?

That’s what I feel like saying to so many investors that still think the markets work like they used to. I’ll have more on this in future posts. For now, I think the word I’ll settle on for the YARP-dividend stock environment we find ourselves in is…

…BUOYANT

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What I did in my YARP account today (see the shared research deck for details, highlighted in blue:

• Added to 3 stocks as follows:

  • One went from 2% to 5% of portfolio

  • One went from 1% to 4%

  • One went from 1% to 5%

Reduced 2 stocks from 5% to 3%

• Both were recent increases, just in time to qualify for the dividend last month, and now I’ve reduced the positions as they look good but not great, I am profitable on them on price-appreciation only, and those fat dividend payments will roll in later this month on payment date (since I qualified by owning them on “ex dividend date.”

Cash is now at 9% of the YARP portfolio, but I’m not to keep it in money market rather than buy a T-bill ETF, since I expect to put much of that cash to work in some form as a busy dividend season continues.

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This is another good example of why I think the greatest value to the institutional service is not what I own or even the exact method I use to increase and reduce the 40 stock positions and some ETFs I own at any time. It is really about the PROCESS AND STRUCTURE of a portfolio, which in my case is to generate as consistent a total return as possible, include as much dividend cash flow in that total return as the market allows, and have “tail risk” or disaster protection in place at all times.

Combine all that, and I think I have developed something that, while not bulletproof (because nothing is), allows me to earn competitive, lower-stress total returns in nearly any market environment.

This service is simply about letting other folks in on what I’m doing and thinking, so they can customize it for their own unique situation.

I expect the activity level to continue to high, so you’ll probably see these types of portfolio alert notes with continued frequency. We also are recording a video learning series which we hope to start putting on the site later this month. And I am quickly developing a second YARP investment sub-strategy which trades off some yield in exchange for more growth potential. The “dividend growth” version of the original YARP higher-yielding formula.

Stay tuned, and keep asking great questions. We are here to help!