Help – Portfolio Review methodology


During the Portfolio Review, I look to answer questions such as these:

  • Should we consider selling any shares?

    If a company’s share price has ‘skyrocketed’ i.e. trading within 10 per cent, at or even well past its historic overvalued level, careful consideration and ongoing monitoring are required to decide to exit the shareholding in whole, in part or not at all.

  • Has the company slowed its rate of dividend growth? Why?

    That may be OK for a high-yielding dividend paying company but a lousy situation for a low-yielding stock.

    Each shareholding has to do its part in getting to the 10% yield-on-cost goal by 2021. A clear warning signal is when a company gets into the habit of declaring below inflation rate annual dividend increases. Such action may have been the right decision for them as a company, but it made it a ‘bad’ company for this portfolio. I’m running my own little business here, and the dividends are my sources of cash flow.

  • Is the safety of its dividend in question?

    Are there any companies in the portfolio whose dividends may be in danger? The danger might come from bad economics, sudden catastrophes, margin compression, strategic choices, or there may be other reasons.

  • Is there a chance to improve the portfolio by making a share swap or adding a new position?

    Improving the portfolio can mean various things, such as increasing the current dividend stream, adding diversification, or attaining a higher expected rate of dividend growth.

    Selling a company at historically overvalue levels/low dividend yields and replacing it with another dividend paying company that trades at historically undervalued price levels can offer a higher current yield and/or a higher dividend growth track record and prospect.

What next?

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