The STRIDE Blog

#18 Little Acorns: 54% Up with $41k Cash to Pick More Stocks

stride-8-little-acorns-portfolio-up-54-with-41k-cash-means-time-to-pick-more-stocks-featured.jpgI have been so busy with my consultancy work lately that I haven’t been into STRIDE for months. I’ve been checking my emails every day to make sure none of my stocks turned red for sell, but that is all the portfolio management I’ve done.

Despite my shocking neglect, my Little Acorns have sprouted again.

Dividend...

My word of the moment. During my recent months of scant portfolio management, I’m amazed at the difference a dividend makes.

I now have a locked-in cash profit of $29,473. This is larger than my original $25k ‘rainy-day’ fund I’d set aside and, having only sold a couple of stocks since I started, this profit is largely thanks to dividends.

While I wouldn’t buy stocks purely based on whether they pay dividends, those payments rolling in really help boost the cash pile. And if, like me, you’re the kind of investor who might neglect their management duties from time to time, it’s great to know cash is pouring in regardless of other fluctuations that might be happening.

“If markets are fluctuating, how can you be sure those dividend payments are sustainable?” you may ask.

I’m confident that all my dividend-payers are financially sound companies because STRIDE won’t award a high dividend score if the business can’t afford to keep paying them. Some businesses pay out regardless of whether they can afford to, even borrowing funds make those payments.

STRIDE identifies companies that do this and scores them down, even if their dividends appear generous from the outside. The last thing you want is to receive a payment at the expense of the overall value of your stock – something I feel confident I don’t have to worry about using this stock picking tool.

My upcoming dividends for May and June 2017, listed in my update email.

STRIDE Dividends - value investing

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Portfolio Progress and Future Planning

Little Acorns is up 54% overall in two years and five months. That equates to a 19.6% compounded annual growth rate (CAGR). This means I’m doing almost as well as Warren Buffett’s 20.8%. And he’s been doing this way longer than me!

My stocks are now worth $140,860 and my cash pile has grown from $25k to almost $41k. This brings the total value of my portfolio to $181,820.

When I started out, Little Acorns was worth $108k. (I also added $10k cash from a windfall a year or so ago, bringing my total investment to $118k.)

My very healthy cash pile, while a nice problem to have, has presented me with something of a dilemma. My portfolio is built on a 30-slice model and currently that is exactly what I have. It took me a while to find all my stocks and I don’t really want to change anything.

On the other hand, I’m not making any returns on that $41k stuck in the bank. Time to steeple the hands and have a think.

My average slice size is now $6k, reflecting the overall 54% increase in value. This means I can buy two whole new slices and still retain $29k.

So that’s what I’m going to do. It’s back to the target list to start looking for my next two $6k acorns, bringing my slice number up to 32.

Stock Performance Update

Best performers:

Photon Control: +211% - my first ‘triple bagger!’

System1 Group (was Brainjuicer): +140%

Svolder AB: +127% 

Biggest losers:

FT Group Co: -66%

Cenkos Securities: -54%

Formosan Rubber Group: -52%

Compare this with my last post here.

Update email 18th April 2017

STRIDE Dividends Screenshot 2 - value investing rewards

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Topics: Portfolio Management, Little Acorns Portfolio

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