Hello everyone and welcome to my 2018 investing strategy post. Tell me do you come up with an investing strategy? I have never had a strategy before and I am really looking forward to see if this helps me achieve my goals. Back in late December and early January I decided I wanted to try and focus on growing my portfolio and the value of that portfolio, also diversifying the portfolio. How was I going to do it? I could invest more money, buy more stocks etc. That is why I decided that I needed a strategy to help me accomplish my goals.
Just to refresh my investing goals for this year are to invest at least $10k and to receive at least $6k in dividends.
Well those goals are great and all, but what would I do with that $10k that I invested buy all new stock? Buy more shares of the same stocks I own? Leave it in cash?
- At the beginning of the year I made the decision that I didn’t want to buy many new stocks maybe two or three, this year I was going to try and focus mostly on growing my position in the stocks I already own.
- Also I plan on diversifying my portfolio currently 85.2% of my value is in the Canadian market that is far too much. I plan on buying US stocks once again.
- Replace non-core stocks that don’t increase their dividends as often with stocks that raise theirs more frequently.
Locked In RRSP
If you have been reading my blog for awhile you will have noticed that I haven’t mentioned the Locked In RRSP that I have very often only in my net worth posts. The reason for this was because the money was invested in mutual funds from the bank. I didn’t pay that much attention to it. This money is pension money that I had from a previous employer. The value of this money was just over $4,000 as of this past Monday.
Yesterday I decided that I wanted to control these funds and invest it in stocks so I opened an account and filled out and submitted all the paperwork (14 pages). So some time in February that money will get transferred over to my brokerage and I can begin buying stocks. This move will definitely help me get closer to my dividend goal.
Back in 2016 I turned the DRIP (Dividend Re-Investment Plan) off and I took my dividends in cash. Well in an effort to help build up my positions I turned my drip back on. Beginning in February I will start dripping my stocks if the dividend is large enough. With my brokerage I can only receive whole shares, if I don’t receive a big enough dividend I will then just get cash.
I guess you can say I have home country bias with 85.2% of the value of my portfolio in Canadian equities. In 2018 I plan on buying US stocks again in order to help bring that 85.2% figure down. There are so many excellent US stocks out there I should have been buying and holding them sooner. The stocks that I do buy will go into my RRSP account this is because there is a tax treaty with the US, we are allowed to hold US stocks in our RRSP and the dividends received in that account are tax free.
So in 2018 I plan on building up my position in the stocks I already own. I am going to diversify my portfolio by buying US stocks again. Finally I will look to sell stocks that don’t raise their dividends as often and replace them with stocks that do. I believe if I follow these three things in addition to taking control of my Locked In RRSP, and turning on my drip that 2018 will be a successful year for me.
What do you think? Is my strategy a good one? Maybe it’s a start and I can go further? Please feel free to let me know what you think.