How I Invested a Lump Sum Today
Just like I did at the beginning of 2022, I decided to share how I plan to invest a lump sum for 2023 That lump sum is my Roth IRA contribution, which for 2023 is increased to $6,500 if you are under the age of 50.
Naturally, this exercise helps me address a few types of questions I receive with one example. The questions are:
1) How would I invest a lump sum today?
2) Which companies in the Dividend Growth Investor Newsletter Portfolio would I invest in, if I were starting today?
I am going through the list of portfolio holdings, and have narrowed it down to about 60 companies today. The companies I invest in may vary a little bit, depending on valuations.
I am funding my Roth IRA at Fidelity $6,500. I am equally weighting the contributions in each company at the start and would not be rebalancing ever. I turned the DRIP on. I will not sell a company unless it cuts or eliminates dividends.
I took the list of holdings as of December 31, 2022 and followed a few steps:
1) Removed companies that haven't increased dividends for 5 years or more
2) Removed companies that failed to increase dividends recently or raised them at a nominal amount
3) Removed companies with a small 1 and 3 year dividend growth (Dividend growth below 3%)
4) Removed Nestle due to withholding taxes on dividends, which I cannot recoup in a retirement account
5) Removed companies selling above 25 times forward earnings.
The list I invested in is below:
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