My portfolio is rather small in size and so are the dividend amounts that were deposited. But despite the small amount of invested capital, I am already taking note of the dividend compounding effect. This effect reminds me of a seedling which is slowly, but continuously growing out of fertile soil - that is my portfolio. :-)
I could quickly ramp up my portfolio in size just for the sake of generating more dividends, but I prefer to keep a cautious attitude towards the stock market and to act with prudence and care. History proves that market crashs occur frequently and are difficult to predict. Against this background, I prefer to build up my portfolio constantly throughout a longer investment horizon. At the same time, I am hoping for a stronger market correction within the next one or two years in order to expand more aggressively while reaching a higher yield on cost.
Many investors claim that market timing is a complete waste of time. But I am following my gut feeling here and I feel more comfortable with a sort of anti-cyclical investment approach. Although it could well be that I need to be patient for a much longer time than originally expected.
Let’s have a closer look at dividends received in Q1:
There has been total dividends (net of taxes) of EUR 133 in Q1. The annual coupon of Ekosem was by far the largest amount followed by distributions of Seadrill and TICC.
Based on EUR 133 in Q1, I might be able to add a whole new position to my portfolio at the end of the year: If I assume a EUR 133 per quarter this adds up to EUR 532. With more portfolio additions to come in the next months I might be able to exceed this amount and reach some EUR 700 which is an acceptable basis for initiating a new position.
As the DAX dividend season is approaching, I am thinking about adding a few more DAX companies to my portfolio. Based on my recent stock analysis, my favorites are BASF, Munich RE, and Allianz. Prices for the three companies rallied pretty much in the last trading days. Same holds true for Unilever and AT&T, which I consider as other suitable candidates…
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