Wow what a year 2013 has been so far. January and February have delivered solid returns for investors. To some degree, it actually scares me how well the stock market has performed. I fear that the exuberance may be too much too soon, perhaps even... irrational?
Nonetheless, it is very difficult, if not impossible, to determine where the market is headed in the short to medium term. What is clear, however, is that we are at or nearing levels unseen since 2007. Levels that also marked a market top in 2000. That should worry you, at least a little bit. Below is a 40 year chart of the S&P 500, and the triple top forming from 1999 to 2013 is quite obvious in the graph.
Thus, I want to protect myself somewhat against a correction that is overdue. Instead of selling and moving to cash, I'm attempting a strategy where I simply rotate into a mix of more defensive oriented investments. As you can see below, my dividends received is similar, but I've sold out of riskier investments, locked in profits, and moved to what I believe are fair or undervalued defensive businesses.
As you'll also see below, there were 3 companies that raised their dividend in February 2013. All 3 were increased around 10% (Canadian banks like TD typically raise their dividend every 6 months).
Southern Company - $137.20
Toronto Dominion Bank - $97.20
UnitedHealth Group - $87.55
Becton Dickinson - $108.90
Pason Systems - $96.00
CSX - $70.00
Cummins - $66.00
Intrinsic Dividend Changes
Rogers Communications - $29.12 (quarterly div +10.1% from 39.5 to 43.5 cents)
Coca Cola - $31.50 (quarterly div +9.8% from 25.5 to 28 cents)
Toronto Dominion Bank - $4.00 (quarterly div +5.2% from 77 to 81 cents)
January 2013 Annualized Dividend: $4567.44
+ $321.95 (from new purchases)
- $340.90 (from sales)
+ $64.62 (from intrinsic changes)
February 2013 Annualized Dividend: $4613.11
End of 2013 Goal: $4700 to $5000
Whisper Goal: $5500
YTD Dividends Received: $449
2013 Dividends Received Goal: $4200
Whisper Goal: $4600
After 2 months, my portfolio has received intrinsic dividend growth of just over 2.5% vs Dec 31 2012, keeping me on target for an annual intrinsic dividend growth rate of 10-12% ex Citigroup. The return of Citigroup's normalized dividend is expected to add anywhere between 2% to 3.5% to the 10-12% target.