As they are next door neighbours I cannot avoid thinking about Greece.
In recent years Athens went through a phase of “debt reassessment” and it seems that unfortunately all the initial efforts were not enough to avoid a possible default. But I am not interested in the Greek case itself, there is little that I could add in a debate about it, what I am interested in is the “haircut” word, the actual meaning applied to a very “green” dividend investor such as me.
If there is something that I understood in these first 6 months is that I need to try to be as precise as possible with my personal finances, i.e. a great part of the dividend investing strategy revolves on constant reinvestments, not just of the dividends, but also of the savings that one manages to get.
By doing so, it’s easier to reach a quota of investments that might be sufficient to generate enough yearly dividend to supplement an eventual pension.
Being “nasty” about one’s savings it’s not easy thing, requires precision and total devotion to the task, right now I am not in the position to be like that, so I have decided to postpone this part at the end of the first year of my dividend investing plan. I know it sounds a bit weak on my side, but there are things that I need to wrap up this year (mostly house related) and savings are going to be very hard for me… So i’d better be real about it!
Where I think that I can apply the concept of haircut is the size of the Portfolio, instead! One of the first mistakes that I can call me accountable for is that I did not keep my “cool” when making my first investments, I had my savings and despite the research I started to spread my tanks around the Risk board to get as many nations as I could. Shame that I find myself owning a lot of states, but with only one tank. Any half decent strategists would tell you that you made a bold move (to put it nicely)…
So this is why I want to try to take this month and reassess the number of positions that I have. Clearly this course of action means that I also revise my strategy. Do I need to have NRZ or BBEP in my holdings? They are both interesting companies, great dividend yield with a good upside potential, but great fluctuations. Or should I look into GSZ and ORA, bought on a “trip to diversification” moment, and that I should have researched a little bit better?
Do you sell even if you are loosing, or do you look only to the positions that are positive (the latter could prove quite hard for me as most of the PF is in the reds)?
I have many questions ahead of me, what is sure is that too many positions are great for differentiation (and even there I’d really need to look at the Beta of all my stocks), but are hard to keep track of them all. But most importantly I haven’t added positions in great stocks that I really think should be more prominent like: JNJ, DIS, PEP, SBUX or ULVR.
So it’s back to the drawing board for me, or as I started the post… Time for an haircut!
Advice, ideas, comments are welcomed of course!