With 2021 now in our past, I’m ready to examine how I fared with regard to achieving my 2021 Portfolio Goals.

The first couple of years I set some Portfolio goals (2018 & 2019), I was a little better than average at achieving success.  Last year, however, I took a step back and only hit on about 50% of my goals.  It was tough sledding in an abnormal year.

I had higher hopes going into 2021, as dividend growth was on the mend to start the year.  As it turned out, dividend growth returned strongly in 2021, and the results were noticeable in my Portfolio.

At the beginning of 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.  The bonus goals included 2 sector weighting goals and 1 sector stock goal.

This past July I posted my Mid-Year Review of 2021 Portfolio Goals, and I was confident in my ability to achieve the majority of my goals.

A lot can happen in 6 months time.  So, let’s see how it all turned out…

 

Review of 2021 Portfolio Goals

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

This was my 3rd year in a row having this $10K investment goal.  I suspect there will be a 4th in 2022.  🙂

For 2021, this continued to be the right level of investment for me.  However, I hope to begin increasing my level of investment starting in the next year or two.

Anyway, at mid-year, I’d only invested $3,135.12 of the $10K goal, so I had some investing to do in the back half of the year.

In the final two weeks of December, I invested a little over $500 to push me over the $10K threshold.

Of all my goals, this is the one I have the most control over.  Thus, I’d be sad if I couldn’t find a way to meet this goal.

It’s never a given that I achieve this goal, as things happen with finances during the course of a year that you can’t always anticipate (as I’m sure you know).

However, I managed to scrounge up the needed funds in 2021 to reach my goal.  I finished the year with an net investment of $10,053.23… barely surpassing my goal by just over 0.5%.

During 2021, I executed a total of 61 transactions…. 42 purchases and 19 sales.  This was a little less than my number of transactions in 2020.  The majority of the transactions (43) took place in the 2nd half of the year.

SUMMARY – GOAL MET!

 

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.).  I’d need a little less than $1,764 in additional forward dividend income to reach my goal.

I hadn’t gotten close to adding such a large amount of forward dividend income since back in 2018 when I was investing much larger chunks of new investment capital.  If I was going to reach my goal in 2021 it would be on the back of strong dividend raises, my biggest contributor.

By mid-year, I’d already managed to add $1,030.54 to my annual forward dividend income, putting me at $13,066.68… over 58% of the way to my goal.  I was getting better than average contributions from all 3 sources: reinvested dividends, dividend raises and new capital investment.  I even had some strategic stock swaps help my new capital investment category and propel me to mid-year success.

Looking at the back half of the year, I was confident I could achieve my annual goal if dividend raises stayed strong.  Getting to reinvest a big mid-year special dividend from T. Rowe Price Group (TROW) to start the 2nd half of 2021 was certainly helpful as well.

As it turned out, I achieved my goal by mid-November and padded it nicely in December.  I finished 2021 with a annual forward dividend income of $14,261.70, more than $461 past my goal.

My average monthly dividend income is now $1,188.48.

I added $2,225.56 to my forward dividend income in 2021.  That’s an 18.49% YoY gain… Wow!

SUMMARY – GOAL MET!  CRUSHED, ACTUALLY.

 

3) Obtain $13,200 in actual dividend income

In the 1st half of 2021 I collected $6,392.96 in dividends.  Assuming I could duplicate that effort in the 2nd half of 2021, I’d still be short of my $13,200 goal.

However, I felt confident I could meet my annual goal given the TROW special dividend that was coming, and also accounting for my projected dividend income for the remainder of the year, not to mention the additional boost from my trifecta of forward dividend income sources.

When all was said and done at the end of 2021, my Portfolio generated $13,466.05 in dividend income.  I surpassed my goal by just over 2%.  Subtracting out the TROW special dividend, I would have come up short of my goal at $13,110.74.  However, the special dividend counts and success was mine.

I added $1,831.51 to my actual dividend income in 2021.  That was good enough for a 15.74% YoY gain.

SUMMARY – GOAL MET!

 

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

The stated goal was to increase my Portfolio’s Information Technology AND Communications Services weightings, two sectors where my Portfolio is most underweight.  However, I generally target getting those sector weightings to be within +/- 3 percentage points of their respective weightings in the S&P 500.

At the end of 2020, my Portfolio’s Information Technology weighting was 21.15%, while the S&P 500 had a weighting of 27.61% in that sector… a 6.46% delta.  Meanwhile, my Portfolio’s Communication Services weighting was 4.89%, while the S&P 500 had a weighting of 10.77% in that sector… a 5.88% delta.

At mid-year, the Information Technology delta had increased to 7.22%, and Communication Services delta increased as well to 5.99%.  I was obviously doing something wrong as I was getting farther away from my target.

Well, this was partly due to me making only a single-share purchase in either sector during the 1st half of the year.  It also didn’t help that I had trimmed one of my Tech stocks, Skyworks Solutions (SWKS) in February.

At year’s end, my Portfolio’s Information Technology weighting was 20.72%, while the S&P 500 had a weighting of 29.17%… the delta had grown to 8.45%.  While I initiated a position in Amdocs Ltd. (DOX) and purchased a handful of shares of Visa (V) to help my situation in this sector, I also trimmed my Qualcomm (QCOM) position some.  The result of the transactions was still a net positive though.  The problem was that Tech as a sector performed better than the S&P 500 as a whole in 2021, but with my Tech weighting being lower, the strong sector gains only made my weighting delta worse.  Plus, I don’t think my Tech holdings performed as well as the S&P 500 Tech sector did.

As for where my Communication Services weighting ended the year… it settled at 5.45%, while that sector of the S&P 500 finished with a weighting of 10.16%… a 4.71% delta.  Hey, I made some headway here – I reduced the delta by over 1 percentage point!  How did I do it?  In the second half of the year I initiated a position in Omnicom Group (OMC) and followed that up with additional purchases, too.  By year’s end I had invested just over $6.1K into OMC.

So, while my Information Technology sector weighting grew farther apart from that of the S&P 500 in 2021, my weighting in Communication Services improved, even though it didn’t quite reach the 3% delta I’m targeting.  Unfortunately, one of two doesn’t allow me to declare victory on this goal.  Perhaps I should have listed it as OR instead of AND.  🙂

SUMMARY – GOAL MISSED!

 

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

As opposed to trying to increase my sector weighting as in Bonus Goal #1, here I’m trying to decrease a sector weighting.

I’ve been overweight in the Industrials sector for a while (it remains my most overweight sector) and have been working to reduce it.  However, in 2021 I made it a goal.

Once again, I’m trying to reach a weighting that’s within +/- 3 percentage points of the S&P 500’s Industrials weighting.

When the year began, my Portfolio’s Industrials weighting was 16.14%, while the S&P 500 had a weighting of 8.40%… a delta of 7.74%.

At the midway point of 2021, that percentage difference had dropped to 6.99%.  I did this by trimming my Air Lease (AL) and 3M Co. (MMM) positions.  Adding shares of Lockheed Martin (LMT) offset some of my 1st half progress though.

In the latter half of the year, I continued reducing my AL position, eventually eliminating the position altogether.  I did add single shares of LMT three more times, but this paled in comparison to the AL reduction.

When the year came to an end, my Portfolio’s Industrials weighting finished at 13.72%, while the S&P 500 had a weighting of 7.77%… a delta of 5.95%.  This approached a 2 percentage point improvement.

SUMMARY – GOAL MET!

 

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

Utilities and Energy were the two sectors that didn’t have any representation in my Portfolio when 2021 began.

My Portfolio has been missing a Utility stock since June 2018, when I sold SCANA (SCG).  It’s been missing an Energy stock since August 2020 when I exited Exxon Mobil (XOM).

Both of these sectors each represent less than 3% of the S&P 500.  Thus, I’m technically within +/-3 percentage points of the S&P 500 weighting in each even when owning 0 stocks from either sector.

Despite that, I went into the year hoping to add a Utility or Energy stock to my Portfolio to obtain some minor exposure to one of the sectors.

With Energy stocks performing so poorly in the 2018-2020 timeframe, I decided to focus on a Utility stock.

At mid-year, I’d already met this goal.  I’d added not one Utility stock, but three!  I’d been watching both Pinnacle West Capital (PNW) and NextEra Energy (NEE) for a good chunk of 2020, but finally pulled the trigger on initiating a position in both on the same day this past February.  I later followed that up by establishing a position in OGE Energy (OGE) in early April, then adding more later that month.  The OGE position ended up being the largest of the three positions.

I basically sat on my hands in the 2nd half of the year with regard to this goal, as it was already complete.  However, I did add a few shares of PNW late in 2021.  By the end of the year, my Utilities weighting had settled at 1.12% of Portfolio value.

SUMMARY – GOAL MET!

 

Summary

It was my best year ever when it came to achieving my Portfolio goals!

Of the 3 primary goals I had, all 3 were met.  I achieved my new capital investment and dividend income goals, while crushing my forward dividend income goal.

With regard to the 3 bonus goals, I met 2 of the 3.  I was able to decrease my Industrials sector weighting as I wanted, and I was able to add a Utility stock to my Portfolio.  On the other hand, the one goal I couldn’t achieve was to increase both my Information Technology and Communication Services sector weightings.  It was the Tech weighting that tripped me up.  Values were hard to come by in that sector and I ended up directing my investments elsewhere.

So close to a clean sweep of my 2021 goals!  Maybe next year I can make that happen.

My 2022 goals should be posted in the coming week.

 

How did you fare in meeting your 2021 portfolio goals?  Did you blow past some of the targets you had?  I look forward to your comments.