Summary
To help build our dividend growth investing (DGI) portfolios, we first need a candidate list, quality ratings, categories (Core and Non-Core) and recommended position sizing. The chart below is not fixed and may be updated over the year. Check the ‘Last Updated’ date for the most current update under the title.
We focus on quality in our DGI portfolios, with fewer stocks for higher concentration and easier monitoring. Our portfolios separate companies into 'Core' (essential to the economy with favourable dividend policies) and 'Non-Core' (typically smaller, high-growth) categories.
We set our maximum position size in ‘Core’ companies at 8% and our maximum position size in 'Non-Core' companies at 5%. The logic behind our approach is that the sizes are small enough to allow us to include 15-20 (diversification) of the best ideas in our portfolios. We also have a greater concentration in the safest opportunities (Core) with some exposure to faster-growing companies (non-Core).
Conversely, having a minimum position size protects us from too much investment in companies whose fundamentals are not favourable in the short term. Our minimum position size range is 1-4%, depending on the ‘Category’. No matter the valuation, a minimum position size means we will always have a position in the companies we invest in.
PAID subscribers will receive DGI Alerts when we initiate a trade within our model portfolio. The alert will include the price and position size.
