Portfolio Reviews

In dividend-growth investing, you are relieved from watching the market every day and agonizing over its every move. However, dividend-growth investing is not "buy and forget." It is "buy and monitor." I monitor my portfolio in two ways.

• I keep up with news on my stocks. If a catastrophe happens, such as last year's oil spill by BP, I want to know about it and decide if it is likely to threaten the company's dividend.
• Twice per year, I conduct formal Portfolio Reviews. These are methdocial, stock-by-stock examinations that come from a higher, strategic point of view. I want to know if each stock is successfully fulfilling its role in the portfolio or whether it is a candidate for sale or swap. 

I have written several articles on actual portfolio reviews for my Dividend Growth Portfolio. These articles illustrate the information examined and the kind of thinking involved.

Portfolio Forensics (August 3, 2010). This first article in the series explained that during a Portfolio Review, the burden is placed on each company to prove why it should be kept. I described the sorts of questions that I ask about each company. This review led to the selling of three positions.

Dividend Growth Portfolio Review: Sherwin Williams Is Out (April 26, 2011). The review last April led to the decision to sell Sherwin Williams, because its dividend increases and yield had stagnated but its price had ballooned. I was able to redeploy the money to better advantage elsewhere.

Dividend Growth Portfolio Semi-Annual Review: Pretty Boring Stuff... The Dividends Just Keep Increasing (Yawn) (October 11, 2011). As the title of this article implies, this Portfolio Review led to no changes. Everything is working to my satisfaction.
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The complete methodology for Portfolio Reviews is explained in my annual eBook on dividend-growth investing. Top 40 Dividend Growth Stocks for 2012 is now being prepared. I'm working on it nearly every day, and I hope to release it in mid-January after I get my hands on year-end numbers. In addition to the Top 40 list (and complete analysis of each stock), the eBook will contain a comprehensive guide to the investing strategy, from how to pick stocks to how to manage your portfolio. Some readers have told me that the investment guide is more important than the list and analyses of the Top 40 stocks. In fact, I considered changing the title this year (to How to Create and Maintain a Dividend-Growth Portfolio), but I feel that the Top 40 title is now well established, so will leave it alone.

As soon as the new edition is available, I will announce it in this newsletter first.