Thursday, December 31, 2015

Model Portfolio Updates

Prices Updated 3/4/2016  

A comparative review of the 2011 - 2015 Dividend Machine Model Portfolios and SDY and VIG dividend income ETF's.


SDY and VIG are not perfect comparisons.  These two ETF's are composed of dividend stocks.  Both SDY and VIG distribute quarterly dividends that are paid out by the dividend stocks.   It is more difficult to predict dividend cash flow because the ETF's can buy and sell stocks whereas, my model portfolios are buy and hold only.  Moreover, SDY tends to payout a big dividend at the end of the year which is funded by the dividends the stocks pay and capital gains from buying and selling.

I will continue to publish the comparative results but I would like to warn my readers to understand that SDY cannot be counted on to deliver a 6+ percent dividend yield.

You can see that buying low in 2011 paid off nicely and buying high in 2014 and 2015 was challenging.   My model portfolios provided better capital gain in the early years and less in the later years.   SDY income was the best of the three investments (SDY, VIG, M* Models) especially in 2015 due to their extra $3.00 of income per share.

My 2015 models have a heavy emphasis on energy.  This did not occur by design.  Energy stocks met the 3.5% dividend yield and 4% per year dividend increases when I ran my screens.  We will just have to see what happens to this portfolio as energy stocks work their way through a decidedly bear market.

M* TheMoneyMadam