How I Invested a Lump Sum Today

Just like I did at the beginning of 2023, I decided to share how I plan to invest a lump sum for 2024. That lump sum is my Roth IRA contribution, which for 2024 is increased to $7,000 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 54 companies today. The companies I invest in may vary a little bit, depending on valuations. I shared the initial list last week with you. Today I just invested the funds.

I am funding my Roth IRA at Robinhood with $7,000. 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.

Because Robinhood has a match for Roth IRA contributions of 3%, I was actually able to invest $7,210 in the companies listed below. I enrolled in Robinhood Gold, which costs $5/month however, taken out of the taxable account there. Without it, the match would have been 1%, so I would have invested $7070. I think the RH Gold is worth it for the purposes of increasing my tax-deferred contribution.

Unfortunately, it took a week for the full money to be available and be invested.

I took the list of holdings as of December 31, 2023 and followed a few steps:

1. Removed companies with low or no earnings growth

2. Removed companies that haven't increased dividends for 5 years or more

3. Removed companies that failed to increase dividends recently or raised them at a nominal amount

4. Removed companies with small nominal dividend growth over the past 5 years

5. Removed companies selling above 25 times forward earnings.

The list I invested in is below: