Monday, January 5, 2015

Loyal3 Bear Strategy

I just opened a new Loyal3 account and invested in the following

  Price Shares Annual Div  total 
KO 49.91 4.7154 1.22 $ 5.75
KRFT 200.07 3.1939 2.2 $ 7.03
UL 49.99 10.1834 1.45 $ 14.77
K 198.36 3.0869 1.96 $ 6.05
PEP 198.49 2.1177 2.62 $ 5.55   

My forward annual dividend increased by $39.15. (note UL will vary since the dividends are in euros and converted to US dollars).

Look at your portfolio, what do you consider as your most reliable dividend stocks? During the 2008, 2000s, or early 1990s crash, which of your stock continued their normal distribution or increase their dividends? Which one of your stocks could even survive another 2008? Looking at my portfolio, I determined only a few would maintain or increase their dividends:

1) McDonalds
2) Baxter
3) AT&T
4) Chevron/COP/KMI maybe depending on the price of oil.
5) Aflac.

Only 5-7 of my stocks are considered "Trustworthy". In another 2008, my entire life's work could disappear. I think this is the same for most people. A majority of my stocks are speculative or REITs (which will suffer from the interest increase panic). Every good portfolio is always on a lookout for the dreaded bear. Mine, however, is not.    

Thus, I proclaim 2015 as the year of building the "core" of my portfolio. What is a "core"? In my opinion, these are stocks that aren't easily replicable, they are basic necessities, will continue their normal payout or increase their dividend, and survive even during times of low stock prices and large headwind. What qualifies as a "core"? In my opinion; consumer goods/staples and healthcare.

As we saw during the last recession; people were willing to give up that Big Mac but they weren't going to let go of their Kraft slice cheeses, dove soap bar, or a can of coke/pepsi. People couldn't afford their medical bills/insurance but they still went to the doctors.

My goal this year is to put $1000 a month in my Loyal3 to build up my Core. My prime targets are Kellogg, Coke, Pepsi, Kraft, Unilever, Doctor Pepper Snapple, Hershey's, and whatever they decide to add on Loyal3 this year. (Here's hoping for General Mills, Proctor and Gamble, and Johnson and Johnson).

Are there any other stocks you would recommend? Disney seems exciting in a strange way and I'm still debating Intel.

Cheers mate. BTW: I'll update my war chest and loyal3 stock listing this weekend. Someday I will learn how to use Google docs and code my portfolio.

"Behind every good dividend investor is a closet bear." 

Long: K, UL, KO, PEP, KRFT.


  1. BDI,

    I really need to do a better job of building up the core of my portfolio. The problem though is that most of the companies that I feel can weather any storm thrown at them are viewed the same way by the market and command a premium. I'm loathe to pay up for quality by too much so it makes it difficult to add to these names too often. But the DCA over time with Loyal3 seems like a good way to build these positions up.

    1. hi JC, i agree with the price so I use loyal3 to dollar average my positions. instead of $1000 or $2000 buys i buy $10 a week on quality companies and dig deep when they go on sell i.e. WMT at 58 and HSY at 86. It's best to get a small position and let the compound interest start as soon as possible. Plus with no fees mean can buy as much or as little as I want!