The concept behind The (Almost) Daily Dividend Portfolio is that basically, the more often something compounds the faster it will grow. On top of this, the feeling of getting a dividend (almost) every day is pretty fun!
Watch the video for the full overview!
This wasn’t always easy as sometimes companies don’t pay at regular dates year on year so the first thing to note is that the dates are rough guidelines rather than an exact science. I think it would be impossible to actually make a portfolio that strictly pays every day and sometimes good enough is good enough.
After making the grid of dates I needed to choose the components.
A big problem with a set and forget portfolio like this is the fact that no investor wants to be paying attention to the stocks that are actually in the portfolio and seeing what they say on earnings call etc. So the first criteria I set was that these need to be reliable stocks. In the case of dividends there are many occasions were a shaky company is still paying out dividends when it really shouldn’t be according to its financial position, and the last thing we want in a complicated portfolio like this is for one of the companies to cut the dividend completely forcing us to rearrange it all again.
Criteria 1 was that these need to be safe, reliable companies with a decent dividend history that weren’t showing any short term warning signs. Now of course you can’t predict another event like covid19 in the next 5-10 years but I am about 90-95% sure they won’t cut their dividend of the ones I have selected in this portfolio.
The second criteria was actually more important than the first and it was that Trading212 must have the company in the selection of companies. I was actually pleasantly surprised that almost all of the companies that I researched did actually appear in the available database of Trading212 stocks and ETFs.
The Process of creating The (almost) Daily Dividend Portfolio
The next thing I aimed for was to get as many stable monthly payers as I could find as they would offer 12 payments per year and as there is a limit to how many stocks you can hold in a pie. After stable monthly payers, I wanted stable quarterly payers and unfortunately, the USA does both monthly and quarterly payers better than us here in the UK which usually pays semi-annually and occasionally annually. This means that the portfolio is heavily weighted to US stocks.
Finally, I added a few of my favourite stocks that maybe aren’t quite dividend aristocrats but still have a good few years of dividend history and seem like they are in a safe place to keep paying out. That could be based on the industry they operate in or on a case by case basis.
The final total amount of payments that this portfolio should provide 260 payments over the course of the year. That means that it really is an ‘almost daily’ dividend portfolio. Hopefully, we can make it grow and see how it compounds.
I would recommend:
- Adding at least £400 to hit the threshold of every company within the pie
- Holding for longer-term to smooth out fluctuations in the share price
- Bearing in mind that the pie is optimised for sustainable regular payments, not the highest yield or highest appreciation in the share price.
Aggregate Pie Yield is roughly 3.2%
Capital appreciation is estimated (by Trading212) at roughly 7.5%
A £1000 investment would mean an average daily payment of 14p (some days will be higher and some lower)
If you want to discuss the pie or alternatively just read the FAQ then click on the image below to go to the discussion thread on the forum