The first year for the Rainbow Portfolio was successful, as the portfolio’s preferred holdings produced returns of 5.13%, which was 1.13% in excess of the portfolio’s 4% return benchmark, hooray!
Compared to the $2,000 the portfolio started with at inception last year, the portfolio ended 2023 with an approximate value of 6,082.76: a whopping $4,083 increase in portfolio assets.
Over the course of 2023, dividend production began to gain steam, as the portfolio produced $218.57 in dividends. For 2024 however, I estimate that the portfolio’s dividend income will be at least twice that of 2023, with projected annual income in excess of $400.
As per portfolio guidelines, monthly cash contributions increased by 3% at the start of the year to $257.50 from last year’s $250. This brings forward annual contributions to $3,090 per year, and increases the likelihood that the portfolio could cross $10,000 in value in 2024, hooray!
And thanks to consistent purchases of low-priced preferred stocks throughout 2023, the average dividend yield of the portfolio has meaningfully increased, from 5.35% at 2023 year-start, to 6.12% as of writing: a 0.77% improvement. While it’s likely that the portfolio’s yield will moderate as the prices of preferred shares rise, I anticipate that the portfolio should be able to maintain an average yield above 5% over the course of the next five years.
As for blog contributions, there is little I will likely be able to offer this year beyond half-year and year-end updates, as work is ramping up in a way that allows for little free time. In addition, after discussions with several institutional managers, I am disappointed to say that I have decided to discontinue the Preferred Stock Portfolio that I began in the fourth quarter of last year. It turns out that the incentives to work with Canadian institutions are generally poor, in way that isn't worth deterring my work’s primary focus on public company research.
However, the essence of the blog will continue through the Rainbow Portfolio, as it seeks to demonstrate how a relatively small monthly contribution can amount to six-figure savings over time by investing in simple, income-producing assets.
For those of you interested in learning how to build savings, I encourage you to access the blog’s introductory page on saving to start thinking about how that might happen for you.
To conclude, the portfolio weightings at year-end were as follows:
Thanks for reading!
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