We are already halfway through 2024, so it’s time for a review of my 2024 Portfolio Goals.
I need to determine if I’m making progress on achieving these goals. If I’ve fallen off pace with respect to that, there’s still time to get back on track. But it won’t happen unless I’m being proactive about it.
For 2024, 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 (ones I consistently set). Meanwhile, the bonus goals included 2 sector weighting goals and 1 individual stock weighting goal.
I’ll briefly review the goals below, but if you want more details for any of them, see my goals post from this past January (see link above).
Here we go with the Mid-Year Review of my 2024 Portfolio Goals…
Revisiting my Portfolio Goals for 2024
1) Invest at least $10,000 of new capital in the Portfolio
After one year with a $15K goal for new capital investment, I reduced my goal back to the $10K level that I’d had in years prior. This is an average of ~$833/mo. I’m stockpiling cash in my preparation for retirement, so some of my potential investment cash was diverted for that.
Note that this $10K is net capital investment into my Portfolio. Any Portfolio sales negatively affect my investment total if they are not plowed back into the Portfolio. The same holds true for dividends that are not automatically reinvested. I’ve had a good chunk of those in 2024 after turning off my DRiPs for Altria Group (MO) and Verizon Communications (VZ), and with my broker not offering reinvestment for Amdocs Ltd (DOX).
In the first half of 2024, I made a total of 31 transactions. For comparison, this was nearly double the 16 that I made in the first half of 2023.
The trades were comprised of 24 purchases and 7 sales. Only one of the purchases introduced a new stock to my Portfolio. The others were additions to existing holdings. Three of the sales eliminated a stock from my Portfolio while the others were trims of existing holdings.
For the first half of 2024 I made a net capital investment of $5,652.75. This is past the halfway point. Thus, I expect to meet my goal.
The remaining investment cash needed for me to achieve my goal is ready to go. So, I just need to get it invested.
PROJECTION –> SUCCESS
2) Reach $21,000 in annual forward dividend income
I began 2024 with annual forward dividend income of $18,578.06 (or ~$1,548.17/mo.) To reach my goal I’d need to add $2,421.94 in additional forward dividend income over the course of the year.
This translates to record forward dividend income that I’d need to add during the year. The most I’ve added in any year has been $2,224.04 in 2021.
At the halfway point, I’ve managed to add $1,138.04 to my annual forward dividend income, which is just under 47% of my goal. That leaves approximately $1,284 to go. This feels like a fairly daunting task for the 2nd half of this year.
Of the $2,421.94 in annual forward dividend income that I needed at the onset, I was anticipating about $500 to come from reinvested dividends, $1,300 from dividend raises, and $300 from new capital investment and strategic stock swaps.
The extra $322 on top of that was slated to come from:
- Invest more than $10K in new capital
- Invest the new capital and/or the reinvested dividends at a higher yield than I projected (3% for new capital investment, and 2.75% for reinvested dividends)
- Get a larger weighted average dividend raise than the projected 7%.
- Make some strategic stock swaps, trading one or more lower-yielding investments for higher-yielding ones.
So far in 2024, additional forward dividend income has come from these sources:
- Reinvested Dividends – $305.63
- Dividend Raises – $623.77
- New Capital Investment/Stock Swaps – $208.64
While I’m comfortably ahead of pace with respect to Reinvested Dividends and New Capital Investment/Stock Swaps, I’m slightly off pace on Dividend Raises.
Reinvested Dividends is outperforming despite the market’s 1st half advance (which lowered my Portfolio yield), and me not reinvesting all my dividends.
New Capital Investment/Stock Swaps fared well in the 1st half of 2024. Thus, I suspect I can reach the target for this source by year’s end.
It’s Dividend Raises that have been holding me back, as they’ve come in a bit shy of my target at the halfway point. At least I haven’t suffered any dividend cuts in 2024, as those prove to be significant setbacks.
PROJECTION –> FAILURE (PROBABLY)
3) Collect $19,750 in actual dividend income
I collected $17,634.92 in dividend income in 2023. For 2024, I targeted an income gain minimum of $1,763 (10% YoY increase) and a maximum of $2,116 (12% YoY increase).
I decided shooting for the 12% YoY gain target was appropriate. This would put the dividend income total at $19,750 after rounding down $1. I also set a stretch goal of reaching $20K in actual dividend income… just $250 more.
Note – on a monthly basis, I target 15% YoY increases in dividend income, but with my Portfolio continuing to grow in size, that 15% number is a bit too aggressive for annual growth.
At the halfway point of 2024, I’ve received $9,897.80 in dividend income. As usual, my first half total already includes three of the four Pepsico (PEP) dividends for 2024, due to its unique payment schedule. A pair of supplemental dividends from Main Street Capital (MAIN) boosted my first half total, too.
If I add in my currently projected forward dividend income of $9,677.42 for the remaining 6 months of 2024, I expect my annual dividend income for 2024 to come in at no less than $19,575.22. This has me coming up $175 short of my dividend income goal. However, if MAIN continues with its supplemental dividends in the 2nd half of the year, you can probably shave $110 from the $175 I need. Then there’s the boost I will get from reinvested dividends, dividend raises, or new capital investment in the final 6 months. Thus, my goal seems within reach.
PROJECTION –> SUCCESS
The question is… can I make it to the stretch goal of $20K? I’m thinking I’ll come up short there.
Bonus Goal #1 – Continue to increase the weighting of Technology in my Portfolio (reduce the weighting difference needed to get in my target range)
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 currently have a pair of Portfolio sectors that are underweight their S&P 500 counterparts – the most significant one being Information Technology.
I started 2024 with my Information Technology weighting 11.61 percentage points below that of the S&P 500 Tech sector (17.24% vs. 28.85%). At the midway point of 2024, this weighting difference stood at -11.60% (20.97% vs. 32.57%). Effectively, I’m right where I started, despite my Information Technology sector being a larger percentage of my Portfolio.
I made a few Tech sector additions in Skyworks Solutions (SWKS), Amdocs Ltd. (DOX) and Accenture (ACN) during the first half of 2024 (including multiple buys of DOX and ACN), but I feel these only made up for my under-performance relative to the S&P 500 Tech sector during the 1st half of 2024.
So, whether or not I achieve this goal is going to come down to the 2nd half of the year. At least I’m not working from behind. This goal is totally up in the air.
PROJECTION –> TO BE DETERMINED
Bonus Goal #2 – Continue to decrease the weighting of Industrials in my Portfolio (reduce the weighting difference needed to get in my target range)
In Industrials, my Portfolio sector weighting is more than 3 percentage points above that of the S&P 500 Industrials. I’ve been overweight in this sector for quite a long time. The goal is to reduce the weighting difference I have by the end of the year… to any degree. In general, I like all my Industrials holdings, so I’ve been reluctant to reduce my exposure.
I started 2024 with my Industrials weighting 7.93 percentage points above that of the S&P500 Industrials sector (16.74% vs. 8.81%). At the midway point of 2024, this weighting difference was 7.08% (15.25% vs. 8.17%).
The progress was primarily the result of my trims of General Dynamics (GD) and Fastenal (FAST) in the 1st half of the year. The GD trim was more significant. I trimmed GD to bring it more in line with my other defense holding, Lockheed Martin (LMT). I trimmed FAST due to my perceived overvaluation of the stock. I did have one minor buy in the sector, adding to Cummins (CMI), but the trims more than offset this purchase.
So good progress has been made here. It’s just a matter of maintaining my current position now.
PROJECTION –> SUCCESS
Bonus Goal #3 – Cut in half (at least) the number of stocks that don’t have a 0.5% value weighting within my Portfolio
Ultimately, I’m trying to get all of my Portfolio holdings to have at least a 1% weighting in my Portfolio. Being smaller than 1% means that the stock’s presence in the Portfolio won’t be worthwhile. However, in the short-term I’m focusing on getting all of them to at least have a 0.5% weighting.
To do this, I might invest more new capital into the holdings to get them over the 0.5% weighting threshold. Alternatively, I could eliminate the stock from my Portfolio altogether. Or maybe I won’t need to do anything if the individual stock outperforms the rest of my Portfolio.
There were 6 stocks in my Portfolio at the start of the year that had less than a 0.5% weighting in my Portfolio…
- VICI Properties (VICI) – 0.499% (almost there!)
- UGI Corp (UGI) – 0.498% (close too!)
- McCormick & Co. (MKC) – 0.420%
- NNN REIT (NNN) – 0.405%
- Walt Disney Co. (DIS) – 0.399%
- Whirlpool (WHR) – 0.283%
So, the goal is to have less than 3 stocks with a weighting below 0.5% by the end of the year.
The 0.5% threshold was $3,397.56 at the beginning of 2024. With the stock market gains in the 1st half of 2024, that threshold has risen to $3,631.84 at mid-year.
I bought some NNN in January, and some UGI and VICI at the end of February, to get each of those over the 0.5% threshold.
Meanwhile, I eliminated WHR from my Portfolio due to its poor performance and declining dividend safety.
That leaves me with just two stocks still not exceeding my 0.5% threshold: MKC (0.461%) and DIS (0.411%). I actually bought more shares of MKC in June, just not enough to have it reach a 0.5% weighting.
I’ve already more than cut in half the number of stocks with less than a 0.5% weighting. Thus, unless something strange happens, I should meet this goal.
PROJECTION –> SUCCESS
Summary
I set 6 Portfolio goals at the start of 2024. They consisted of 3 primary goals (1 investment goal and 2 dividend income goals) and 3 bonus goals (2 sector weighting goals and 1 individual stock weighting goal).
At the midway point of the year, I believe I’ll achieve 2 of my 3 primary goals. I’m confident I’ll reach my investment goal and my actual dividend income goal. Sadly, the annual forward dividend income goal appears to be in jeopardy. However, it’s not out of the question I can still meet the goal. Some larger than expected dividend raises in Q3 would certainly help my effort, as would investing the remainder of my investment capital in Q3.
As for the bonus goals, achieving 2 of 3 looks promising, too. I believe one of the two sector weighting goals can be met (reduce weighting difference in Industrials), while the other sector weighting goal (reduce weighting difference in Information Technology) could go either way in the 2nd half of the year. As for the individual stock weighting goal, I should meet that, as I’ve already achieved what I wanted by moving from 6 stocks with less than a 0.5% weighting to just 2 stocks.
At mid-year, meeting 4 of my 6 Portfolio goals is looking like a good possibility, while one is up in the air, and the other may fall short. I’ll return in 6 months from now to share how I closed out 2024 with respect to my Portfolio goals.
Did you set any portfolio goals for 2024? If so, are your goals looking like they were too challenging? Too easy? I look forward to your Comments.