Portfolio - Dividends in 2014

With some delay I hereby publish my year-end dividend report for 2014. Finally time to check the cashflows to see how my dividend tree has evolved!

To put it bluntly: 2014 dividends could be way higher if I had invested more aggressively in the past years. The funds were there, but I was expecting a deep plunge of the stock market and therefore missed some good buying opportunities to build out my portfolio and boost dividend income.

Anyway, I am still satisfied with the EUR 606 that were earned in 2014. It’s a 40% increase to 2013 (EUR 431). Keeping in mind that I am pursuing a more conservative investment approach - with the general rule that no more than 30% of my total assets should be invested into the stock market - the result is still promising.

As a consequence of my strategy, I am sitting on a remarkable cash balance that added another EUR 404 of cash interest income (“Tagesgeld”) to my capital income. Against the background of an unprecedented low interest environment in Germany, this is quite an achievement.

In total, with EUR 1,010 for the year 2014, my capital income has now surpassed a symbolic mark of EUR 1,000.

I do well observe that my dividend income has been growing in the 3-year time period shown in the chart above. That holds true not only in absolute, but also relative terms, meaning as a share of total capital income.

One of my investment principles has always been to consider the ECB low interest policy when following an investment strategy. As long as I was able to get an interest of 1-2% on my cash holdings I was fine with a lower share of stock investments in comparison to my total assets. But since the ECB has gradually reduced the base rate from 0.75% in 2012 to currently 0.05%, my portfolio needed to be expanded to maintain an average return of at least 2% on total assets.

You might be asking why I am already satisfied with such a low yield and following such a conservative strategy. The reason is that I am not so much looking after a maximum return, but mainly aim at preserving or slowly increasing the value of my money. I want to stay liquid and keep all options open for the future, just for private reasons. It might well be that my girl friend and I will be buying an apartment or a house in 2 years time. Until then I don’t want to pump all my capital into an inflated stock market which could well plummet in the near future...