Since we are now in the latter half of July, I wanted to review my 2021 Portfolio Goals.  I don’t want the month to slip away from me before doing this.

With the review, if I’m on track to meet my goals, perhaps I maintain the status quo in my Portfolio.  If my goals are in jeopardy, perhaps some key adjustments will help me correct course.

For 2021, I set 6 Portfolio goals.  This was comprised of 3 primary goals and 3 bonus goals.

The primary goals included 1 investment goal and 2 dividend income goals.  Meanwhile, the bonus goals included 2 sector weighting goals and 1 sector stock goal.

I’ll briefly review the goals below, but check out my 2021 Portfolio Goals post from this past January for even more details.

Let’s get to it.  Here’s the Mid-Year Review of my 2021 Portfolio Goals…

 

Revisiting my Portfolio Goals for 2021

1) Invest at least $10,000 of new capital in the Portfolio

I’ve had this same goal for 3 years in a row now.  While I’d like to invest more, this is enough of a stretch for the time being.

The investment range that I targeted was $6K-$12K, and I chose a final number toward the higher end of that range – $10K.

At the halfway point of the year, I should have invested $5K by now to be on pace.  However, the investments rarely go as planned.

My 1st half trades have consisted of 18 purchases and 10 sales – much less activity than last year.

Of course, not all my purchases were investment of new capital.  In fact, the majority of it was a re-allocation of proceeds from the sales.

All totaled, I’ve made a net investment of $3,506.27 so far, or approximately 35% of my goal.

The cash needed to complete the remaining 65% of the investment has nearly been all collected.  I mainly just need to invest the money during the 2nd half of the year.

PROJECTION –> SUCCESS… I’M BEHIND MY NEEDED INVESTMENT PACE, BUT I’M CONFIDENT I WILL FIND WORTHY STOCKS AND INVEST THE MONEY AS PLANNED

 

2) Reach $13,800 in annual forward dividend income

I began 2021 with an annual forward dividend income of $12,036.14 (or ~$1,003.01/mo.).

To reach my goal I need to add just under $1,764 in additional forward dividend income over the course of the year.

At the halfway point, I’ve managed to add $1,030.54 to my annual forward dividend income, or roughly 58.4% of my goal.  That leaves approximately $734 to go.

Of the $1,764 I needed, I was anticipating about $300 to come from reinvested dividends, $963 from dividend raises, $501 from new capital investment and strategic stock swaps.

So far, additional forward dividend income has come from these sources:

• Reinvested Dividends – $175.65
• Dividend Raises – $569.11
• New Capital Investment/Stock Swaps – $285.78

I’m ahead of pace in each category, which is great.

In addition, I expect Reinvested Dividends to be even better in the 2nd half of 2021.  Recall all those non-reinvested dividends from March due to my account change?  Well, that won’t be limiting my 2nd half numbers.

My largest boost to annual forward dividend income has come from dividend raises in recent years.  Given that dividend raises are coming in strong thus far in 2021, I expect this to persist.  If it does, I’m confident that I’ll achieve my goal.  If I come up short of this goal, I expect it will be due to dividend raises tailing off.

With the T. Rowe Price Group (TROW) special dividend getting paid and reinvested this month, and with planning to invest 65% of my investment capital for the year in the 2nd half of 2021, I’m primed for more boosts to my forward dividend income.

PROJECTION –> SUCCESS… I JUST NEED DIVIDEND RAISES TO STAY STRONG AND I’VE GOT IT

 

3) Obtain $13,200 in actual dividend income

I collected $11,634.54 in dividend income in 2020.  At the beginning of 2021 I targeted a ~13.5% increase for 2021, with a stretch goal of a 15% increase.  This would put my projected dividend total at $13,200 by year’s end, or $13,380 if I overachieved.

At the halfway point of 2021, I’ve collected $6,392.96.  As usual, this already includes three of the four 2021 Pepsico (PEP) payouts due to their payment schedule.

If I add in the monster $355.31 special dividend from TROW in July, and my forward dividend income projections for the remaining 6 months of 2021, I calculate annual dividend income for 2021 to come in at $13,176.44.  While this puts me short of the goal, it doesn’t yet account for the boost I will get from reinvested dividends, dividend raises, or new capital investment in the final 6 months.  I appear to be in solid shape to meet this goal.

PROJECTION –> SUCCESS… SO CLOSE ALREADY, WITH MORE HELP ON THE WAY

 

Bonus Goal #1 – Increase the weighting of Information Technology and Communication Services in my Portfolio

Within my Portfolio, I generally try to keep my sector weightings within +/- 3 percentage points of the corresponding S&P 500 sector weighting.

However, I have a pair of Portfolio sectors that are noticeably underweight their S&P 500 counterparts.  So, rather than try to make up the entire difference all in one year, I set a goal to simply narrow the gap.

As the year began, my Information Technology weighting trailed that in the S&P 500 by ~6.61%.  Meanwhile, my Communication Services weighting fell short of that in the S&P 500 by ~5.83%.

At the midway point of 2021, those trailing percentages are now 7.22% for Information Technology and 5.99% for Communications Services… so, I’m heading in the wrong direction.

Part of the reason for the difference getting larger is that only one of my purchases in 2021 have been from either sector… and that was a single share of Microsoft (MSFT) back in the first week of the year.

In addition, I had a trim of Information Technology company Skyworks Solutions (SWKS) in early February.  Thus, I haven’t been helping my situation with my new capital investments or strategic stock swaps.

In any case, since I’m only looking to increase my weighting in these two sectors by year’s end, I still have a chance to succeed, as I haven’t drifted too far from the starting point yet.  I’ll most likely need to invest some capital in these sectors to make the necessary headway.  I just hope some buying opportunities present themselves.

PROJECTION –> UNDETERMINED… THIS ONE IS UP IN THE AIR

 

Bonus Goal #2 – Decrease the weighting of Industrials in my Portfolio

Keeping my Industrials weighting within +/- 3 percentage points of the S&P 500 Industrials is the long-term goal.  However, just like it was in Bonus Goal #1, I’m not trying to make up all the difference this year.  I’m just trying to narrow the gap.

When the year began, I was overweight in Industrials relative to the S&P 500 by ~7.69 percentage points.

At the midway point of 2021, that percentage difference has dropped to ~6.99%.

As I’ve mentioned before, I like all my Industrials holdings and don’t mind being overweight the sector.  I don’t want to sell my Industrials if I can avoid it.  Instead, I’ll see if I can just bring this down naturally over time by putting my new investment dollars into other sectors.

That said, I made several transactions in the sector in the 1st half of 2021.  I trimmed Air Lease (AL) and 3M Co. (MMM) to the tune of ~$5.2K.  However, I made multiple purchases of Lockheed Martin (LMT) totaling ~$3.7K.  This was a net decrease for the sector in my Portfolio, so headway was made.

I think if I avoid any further Industrials purchases this year, then this goal will be a success.  However, I won’t hesitate to add more LMT if the price appears favorable.

PROJECTION –> LEANING TOWARDS SUCCESS

 

Bonus Goal #3 – Add a Utility or Energy stock to my Portfolio

I started 2021 with two sectors that didn’t have any representation in my Portfolio – Utilities and Energy.

Companies in these sectors tend to offer slower EPS growth and slower dividend growth in exchange for higher yield.  Since I like to tilt my Portfolio towards higher dividend growth rather than higher yield, the fact that I didn’t have a holding in either sector wasn’t of too much concern to me.

Given that each of these two sectors represents less than 3% of the S&P 500, I could technically not have a stock in either and still be within +/- 3% percentage points of the corresponding S&P 500 sector weighting.

Still, I figured it wouldn’t hurt to find a way to add to one of these sectors during the year.

Well as it turns out, I hit the Utilities sector fairly hard in the 1st half of 2021, adding 3 different stocks from this sector to my Portfolio.

I added both Pinnacle West Capital (PNW) and NextEra Energy (NEE) on the same day in late February, then followed that up with the addition of OGE Energy (OGE) in early & late April.  The OGE position is currently the largest of the three.  Each of these companies seem to have better than average dividend growth compared to other Utility stocks.

Needless to say, I’ve already succeeded in achieving this bonus goal.

PROJECTION –> SUCCESS… AS LONG AS I DON’T SELL MY POSITIONS!

 

Summary

I’d say I’m in fine shape with regard to my Portfolio goals as we head into the 2nd half of the year.

I believe I’m on track to achieve all 3 of my primary goals (1 investment goal and 2 dividend income goals), and at least 2 of the 3 bonus goals (2 sector weighting goals and 1 sector stock goal).

The one bonus goal in question is increasing my Portfolio weightings in the Information Technology and Communication Services sectors.  I’ll have to focus some attention here.

However, it doesn’t appear that I need to alter course to any significant degree, as things are playing out as I’d hoped.

 

Do you like my chances for a clean sweep of the primary and bonus goals?  How are you doing with regard to your 2021 portfolio goals?  I hope to hear from you in the Comments.