Saturday, March 2, 2013

Project $3 Million - February 2013 Results

This portfolio belongs to a 28 year old.

Monthly Highlights:

Project $3 Million once again closed at an all-time high. Total portfolio value is $92,362.58. In order for Project $3 Million to stay on schedule, the value at year end 2013 needs to be $86,959.44. As you can see,  we are ahead of schedule and have built a safety cushion in the event the market pulls back.

Companies that have increased their dividends this month:

Coca-Cola (KO) ... up 9.8%
Kimberly-Clark (KMB) ... up 9.5%
PepsiCo (PEP) ... up 5.6%
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PRIMARY OBJECTIVE:

Income replacement! ... The objective is to start earning an income stream now to replace the income that will be earned throughout the working years. The goal is to achieve $10,000 per month income in retirement. The income stream will need to continue to grow to stay ahead of inflation. A portfolio of $3 Million with a yield of 4% will accomplish that objective. Hence the title of this portfolio ... project $3 Million.

MISSION STATEMENT:

To earn an income stream that is reliable, predictable and increasing.

STRATEGY:

To focus on the safety of the dividend, then to focus on the growth of the dividend, and then to focus on the total return. The formula to be used to put this strategy into effect is:

High Quality + High Current Yield + High Growth Of Yield = High Total Return.

TACTICS:

To contribute $500 per month to the portfolio, look to earn 8.25% annually, compounded over 40 years (to age 65). The beginning portfolio value at the time of establishing these goals was $42,204.42.

The link below shows the compounding effect and where the portfolio value needs to be in each of those 40 years, to achieve the $3 Million.

http://www.planningtips.com/cgi-bin/savings.pl?amt=42205.00&dep=500&cmp=annually&int=8.25&yrs=40&Calculate.x=50&Calculate.y=12

All dividends are currently being reinvested back into the companies paying the dividend. New cash will be used to add to positions or create new ones.

STATUS:

To stay on schedule for the $3 Million, according to the link above, the portfolio balance at year end 2013 needs to be $86,959.44.

Project $3 Million is a year ahead of schedule. Portfolio value at the end of February is $92,362.58.
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DIVIDEND HISTORY:

Total Dividends for February are $292.64.
Total dividends for 2013 are $505.35. ... up 15.7% over 2012.

THE CHOWDER INDEX:

The Chowder Index is what I use to determine if the portfolio is accomplishing its goals or not. Since the priority is income replacement, and we want that income to grow, we want to see where the income for each quarter is higher than the corresponding quarter of a year ago. I also want to see year over year income growth.

Year To Date - Year Over Year:

2009 ... $78.94
2010 ... $179.16
2011 ... $348.34
2012 ... $436.75
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FEBRUARY DIVIDENDS RECEIVED:

TAXABLE ACCOUNT:  (Dividend Reinvested)

General Mills (GIS) ................. $25.33 ... bought 0.605 shares
Enterprise Products (EPD) ...... $40.25 ... bought 0.762 units
Kinder Morgan (KMP) ........... $45.87 ... bought 0.522 units
Magellan Midstream (MMP) ... $40.26 ... bought 0.792 units
Colgate-Palmolive (CL) ........... $15.39 ... bought 0.138 shares
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PORTFOLIO HOLDINGS:

Symbol ... Shares ... Mkt Value ... Gain/Loss ... Company

ADP ..... 38.552 ... $2,365.55 ... up 38.06% ... Automatic Data Processing
CL ........ 24.957 ... $2,855.83 ... up 43.49% ... Colgate-Palmolive
CVX ..... 22.759 ... $2,666.22 ... up 49.77% ... Chevron Corp
DEO ..... 29.521 ... $3,533.96 ... up 73.56% ... Diagio, plc
EPD ...... 61.749 ... $3,499.32 ... up 46.87% ... *Enterprise Products Partners
FTR ...... 20.444 .... $84.64 ... Shares received in spinoff from VZ ... Frontier Comm.
GIS ....... 77.35 ...... $3,577.44 ... up 28.51% ... General Mills
JNJ ....... 43.341 .... $3,298.68 ... up 22.46 ...... Johnson & Johnson
KMB .... 26.42 ...... $2,490.88 ... up 41.31 ...... *Kimberly-Clark
KMP ..... 36.08 ..... $3,150.14 ... up 19.82% ... *Kinder Morgan Partners
KO ...... 108.937 ... $4,218.04 ... up 62.05% ... *Coca-Cola
KRFT .... 85.917 ... $4,165.26 ... up 6.56% ..... Kraft Foods
LMT ...... 35.151 ... $3,093.29 ... up 9.59% ..... Lockheed Martin
MCD ..... 35.095 ... $3,365.61 ... up 23.68 ...... McDonald's
MMP ..... 81.311 ... $4,078.56 ... up 84.20% ... *Magellan Midstream Partners
MO ...... 104.466 ... $3,504.83 ... up 59.75% ... Altria Group
PEP ....... 33.248 .... $2,519.20 ... up 22.30% ... *PepsiCo
PM ........ 32.832 .... $3,012.34 ... up 26.85% ... Philip Morris
SO ........ 68.318 .... $3,074.99 ... up 14.36% ... Southern Company
SYY .... 112.689 ... $3,624.08 ... up 7.44% ..... Sysco Corp
Cash ...................... $802.45
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Account Value: ....... $62,981.30

*Increased the dividend in 2013
~Decreased the dividend in 2013
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ROTH IRA: (Dividends Reinvested)

February Dividends:

Verizon Communications (VZ) ... $59.40 ... bought 1.338 shares
Procter & Gamble (PG) ............. $19.35 ... bought 0.25 shares
Realty Income (O) ..................... $14.56 ... bought 0.325 shares
Health Care REIT (HCN) .......... $32.23 ... dividend paid waiting on discount price to reinvest
Kinder Morgan, Inc. (KMI) ....... $25.16 ... bought 0.671
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PORTFOLIO HOLDINGS:

Symbol ... Shares ... Mkt Value ... Gain/Loss ... Company

COP ..... 42 ......... $2,433.90 ..... dn <2.57%> ... ConocoPhillips
D .......... 69.821 .. $3,909.98 .... up 19.34% ...... * Dominion Resources
HCN .... 42.136 ... $2,702.60 ... up 15.56% ...... *Health Care REIT
KMI ..... 68.671 ... $2,545.63 ... up 0.93% ........ *Kinder Morgan, Inc.
O .......... 80.81 ..... $3,688.98 ... up 26.63% ...... *Realty Income
PG ........ 34.676 ... $2,641.62 ... up 20.75% ...... Procter & Gamble
VZ ....... 116.67 .... $5,428.66 ... up 23.93% ...... Verizon
Cash ...................... $19.72
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Account Value: ...... $23,371.08
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THRIFT SAVINGS PLAN (TSP) - Federal Version of the 401K

There isn't any company match in this account. Only 5% of income is being contributed. Index Funds and Life Cycle Funds are the only options to choose from.

Fund - Tracking Index ......... Shares ....... Value .... Percentage of Portfolio

F Fund (Fixed Income) ..... 17.6886 ... $283.06 ...... 4.71%
C Fund (S&P 500 ) ........ 101.1735 ... $1,944.34 ... 32.35%
S Fund (Small Cap) .......... 75.2701 ... $1,978.84 .... 32.93%
I Fund (International) ......... 83.3336 ... $1,803.96 ... 30.01%
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Account Value: ....... $6010.20

Contribution Allocations:

F Fund ... 10%
C Fund ... 10%
S Fund ... 35%
I Fund ... 45%
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SOLD POSITIONS - REALIZED GAINS/LOSSES:

Company ... Date ... Gain/Loss ... Reason/Result

BMY ... 11/09 ... $1,001.21 ... up 25.85% ... Froze dividend, bot VZ and JNJ
CLX ... 06/11 .... $25.25 ........ up 1.57% ... Concerned with debt, bot KMB
KMR ... 02/11 ... $504.94 ..... up 27.09% ... Replaced with KMP, re: taxable account
O ....... 03/11 .... $639.63 ..... up 34.55% ... Sold @ $35.42, repurchased at $34.43 (don't recall why)
VFC ... 10/11 .... $897.99 .... up 53.07% ... Took profits as dividend dropped under 2%, bot PEP
VZ ..... 05/11 ..... $618.16 ... up 30.15% ... Moved cash to Roth and repurchased VZ adding to position
ZTR ... 04/11 ... <$55.58%> .. dn <17.23%> ... Cut loss, bot SYY
O ...... 01/12 ...... $79.73 ....... up 3.01% ... Put cash in Roth and repurchased O
UHT ... 01/12 .... $233.60 ..... up 10.32% ... Wanted to spread tenant risk, bot HCN
ABT ... 10/12 .... $872.46 ..... up 31.38% ... Merger, took profits, bot KRFT
FTR .... 03/12 ... <$1,099.49> ... dn <49.90%> ... Second dividend cut, bot D with remaining cash
BP ..... 12/12 ... <$544.03> ... dn <17.23%> ... Took loss, moved cash to Roth, bot COP
NUE .. 12/12 .... $164.61 .... up 7.33% ... Sold, moved cash to Roth, bot COP
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Total cash gains .... $3,329.48





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