David Crosetti: The Perfect Portfolio: Let’s Not Forget Who Brought Us To The Dance

The Perfect Portfolio: Let’s Not Forget Who Brought Us To The Dance http://seekingalpha.com/article/3959689?source=ansh $CNP, $CSCO, $EMR, $IBM, $JPM, $PFE, $PM, $QCOM, $SO, $VZ, $SWY

The Perfect Portfolio: Let’s Not Forget Who Brought Us To The Dance
Mar 19 2016, 10:27
Includes: CNP, CSCO, EMR, IBM, JPM, PFE, PM, QCOM, SO, VZ, SWY
Summary

Investors are often times very quick to move from one investment to another, often for no apparent reason.
Understanding your own goals and objectives helps you to stay focused on the end game.
It is very easy to lose sight of your own investment metrics and begin to take short cuts.
This is a warning to everyone, including myself, to take the necessary time and effort to focus on making good decisions.
Create your own rules of investing, and if they are working for you, maintain the discipline to use those metrics before putting money at risk.
Introduction:

I have to tell you that I am really having fun with my new series about The Perfect Portfolio and our discussion of companies that we want to own in our portfolio! The comment sections have been very interesting and there has been a lot of great advice from everyone who has participated. Great stuff!

I want to clear up a few things for everyone, as it appears that there are a lot of people coming to the series for the first time and many of those folks are not familiar with The Perfect Portfolio and have said that they really don’t like the name of the portfolio because “there is no such thing as a perfect portfolio.”

Those folks are 100% correct with that line of thinking. My portfolio is not “perfect” for anyone other than me and my own goals. In much the same way, your portfolio probably isn’t “perfect” for anyone other than yourself and your own set of goals. But if we are being open and honest with one another, we can learn from one another and share those things that are working for us and those things which are not.

Some Background:

This particular portfolio was set up with one purpose in mind. It was created to generate income for my mom and to replace the income that she had been receiving from her laddered CDs, as interest rates began to fall in 2009. So we decided to take each CD as it matured and put that money into dividend growth stocks in an attempt to make up for the declining interest income from her laddered CDs.

The portfolio accomplished exactly what we set out to do and that is why it’s called The Perfect Portfolio. The name has nothing to do with anything other than meeting the goals that we had and doing it “perfectly” for us.

Now after my mother passed away, I inherited this portfolio. For the last couple of years, I’ve been using the dividend income to supplement my income from my job. Now that I’ve retired, the dividend income is a supplement to my Social Security benefit, and since this portfolio has always been a taxable portfolio, the dividends are subject to income taxes.

So, our goals for the companies in this portfolio have not changed dramatically, with my retirement, but instead have become more focused and we are looking at ways to increase our income stream with new companies and perhaps buy more shares of existing companies already in the portfolio.

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