| Asset Allocation | Actual | Target | Diff. | |
| Cash/Fixed Income | 12.05% | 12.05% | 0.00% | |
| Equities-Domestic | 61.13% | 57.95% | 3.19% | |
| Equities-International | 21.75% | 25.00% | -3.25% | |
| Employer Equity | 5.06% | 5.00% | 0.06% | |
| Total | 100.00% | 100.0% | ||
| Cash/Fixed Income | 12.05% | 12.05% | 0.00% | |
| Large Cap. | 60.78% | 62.95% | -2.17% | |
| Small/Mid Cap. | 22.11% | 20.00% | 2.11% | |
| Employer Equity | 5.06% | 5.00% | 0.06% | |
| Total | 100.00% | 100.00% | ||
Asset Allocation
Given the unsustainable low interest rates, and the associated future price pressure, I continued to lower my overall bond allocation in the fourth quarter. When rates move up bond prices will be negatively impacted. With international securities struggling, their allocation continues to fall. Each quarter I transfer funds from bonds to international in an attempt to increase my international exposure.At the end of the fourth quarter my asset allocation was reasonably close to my target. My philosophy is to buy the best dividend stocks available and adjust my allocation using my 401(k) and other investments, when needed. I will make needed adjusts with future purchases.
2014-Q4 Performance
After under-performing in 2013, my Dividend Growth Portfolio at 14.9% slightly out-performed the S&P 500 (14.7%) and under-performed Berkshire Hathaway's (BRK.B) 26.6% through the fourth quarter. The Pocket Change Portfolio at 12.7% under performed all three. Below are the YTD performances of various categories along with my S&P 500 (VFINX) and Berkshire Hathaway (BRK.B) benchmarks:| Portfolio | Lifetime Wtd. Avg. | '14 YTD |
| Div. Growth Stocks | 12.7% | 14.9% |
| Pocket Change (9/08) | 13.2% | 12.7% |
| S&P 500 (VFINX) | 8.8% | 14.7% |
| BRK.B | 7.8% | 26.6% |
| Div. Growth vs S&P | 3.9% | 0.2% |
| Div. Growth vs BRK | 4.9% | -11.7% |
When weighted with results from 2008 forward, my income portfolios continue to out-performed the S&P and BRK. As I have previously stated, it is my desire to beat the S&P over the long-run, so I don't pay a lot of attention to short-term performance either positive or negative. For more details on the performance of my income portfolios, including year-by-year performance and cumulative chart, please click here.
The graph will show that based on my returns, I doubled my original investment in my Dividend Growth Portfolio from 1999 to the end of 2014. Growing from a hypothetical $99 investment in 1999 to $203 in 2014. This represented a 15.4% compound annual growth rate over that 5-year period.
Passive Income
For Q4/2014 my passive income averaged $3,529/month, up slightly from the $3,308/month in Q3/2014. The increase resulted from higher overall investments and dividend increases. The above amounts include all sources of passive income in my taxable accounts, primarily interest and dividends. It excludes my Roth IRA, 401(k) and blog income (which is not passive).The next update will be in late-April. As always, thanks for reading! See a list of all my dividend growth holdings here.
Related Articles
- 6 Stocks Currently Trading Below their Fair Value
- The Perfect Dividend Stock
- Bonds Look Morbid When Compared To These Dividend Stocks
- My 5 Largest Dividend Stock Positions Have Double-Digit Lifetime Returns
- The Best Dividend Stocks In The World
(Photo: sanja gjenero)
