As I mentioned in my Q3-2015 quarterly review, I have some big plans for the months ahead.
I'm selling stocks I no longer believe should be in my portfolio. Last week, I sold PennyMac Mortgage Investment Trust (NYSE:PMT) because the company cut its dividend by 23%. I also sold Textainer Group Holdings Limited (NYSE:TGH) after the company cut its dividend by nearly 50%. Several additional stocks are in my crosshairs, but I'm waiting for one last dividend payment from these stocks before selling.
The other plan I alluded to concerns the holdings in my Scottrade portfolio, which used to be a mixture of speculative and dividend paying stocks. While the portfolio performed quite well for me, speculation requires much more time and attention than I can afford at this time. On the other hand, the long-term strategy of dividend growth investing requires upfront work to select candidates that trade at or below fair value, but less work afterwards.
This year, as my full-time work started demanding more of my time, I slowly transitioned my Scottrade portfolio to one holding only dividend paying stocks. While a few of the holdings are not dividend growth stocks, I'm satisfied that these stocks will contribute positively to DivGro's future growth and also help to further diversify my DivGro holdings.
In thinking about merging my Scottrade and DivGro holdings, I considered various approaches.
One option is to close out my Scottrade account and to transfer the capital to DivGro. Aside from the transaction fees, which at $7 per trade would be a costly endeavor, I have no interest in selling excellent positions, giving up dividend income, and incurring capital gains tax obligations. Besides, having portfolios at different brokerages is a form of diversification!
Another option is transferring the account from Scottrade to FolioInvesting where DivGro is hosted. I've never transferred an account from one online brokerage to another, but I know it is possible. I think it could be a costly option, though, as some brokerages charge a hefty fee to perform the necessary account maintenance (and to discourage such transfers!).
Several dividend growth investment bloggers have multiple accounts that they track separately. For example, bloggers may have a regular brokerage account, an IRA or a Roth IRA account, and a Motif Investing account. They list trades and report dividend income by account, and keep track of totals to complete the picture.
I'm opting instead to merge my Scottrade and DivGro holdings virtually. I'm already presenting different buys (of the same stock) as separate entries in my portfolio because I like to track things like yield on cost (YoC), cost basis, and annualized profit/loss accurately. So adding additional entries for my Scottrade holdings would be easy enough.
Adding a column to identify Scottrade and FolioInvesting holdings will be helpful for maintenance purposes. In fact, I already have such a column because I own some of my DivGro holdings in an IRA account. (The column is not visible in the published version, though). I take care of totaling available cash and dividend income from the different accounts behind the scenes, so to speak.
Adding my Scottrade holdings to my DivGro portfolio will take some time. I plan to write about each of these companies, report on my original investment thesis and explain why I want to hold on to my shares. I will also be sure to indicate my current fair value estimate for these stocks. Buying shares at current prices may not be appropriate!
It wouldn't make sense to label these posts as Recent Buys, because I've owned many of these stocks for a while now, in some cases for several years. In fact, some purchases even precede the founding of DivGro in January 2013, which, admittedly, is a little weird.
Looks like I've been a dividend growth investor long before I realized it, and certainly long before starting to blog about it!
Thanks for reading! What do you think of my plans to merge my Scottrade and DivGro holdings? Do you have separate accounts and do you track them separately? Please share your thoughts in the comments below.