August Stock Portfolio

Here is my portfolio as of August 2008. You can see that I have since sold off my position in Freddie Mac, which proved to be a very smart move. I then used my cash to purchase Pengrowth Energy Trust, which pays me an annual Dividend of 14.5% or about 1% per month.

This portfolio performance currently sits at a 3% unrealized return this year, which I am proud of since the stock market in general has been doing so poorly because of this recession. With that being said, I'm more focused on my dividend return which is currently fetching me around $3,000 annually regardless of my portfolio performance. I'd like to eventually reach around $5,000 annually so the search continues for additional forms of income.

Symbol	% of Assets	Description	Dividend Yield	Industry
CU	32.97	United Breweries Company, Inc.	6.83	Alcoholic Drinks
BRK.B	15.59	Berkshire Hathaway Inc.	0.00	Insurance
GOOG	9.44	Google, Inc.	0.00	Online Services
CSCO	5.26	Cisco Systems, Inc.	0.00	Data Networking
JOYG	4.15	Joy Global, Inc.	0.84	Construction Machinery
WMT	3.49	Wal-Mart Stores, Inc.	1.69	Discount Stores
SCHW	3.40	Charles Schwab Corp.	1.10	Securities
JNJ	3.36	Johnson & Johnson	2.69	Drugs
PGH	12.01	Pengrowth Energy Trust	14.50	Oil & Gas
ADM	1.77	Archer Daniels Midland	1.80	Agriculture
STKL	2.62	Sunopta, Inc.	0.00	Agriculture
PXD	2.05	Pioneer Natural Resources	0.47	Energy
CASH	3.89	Cash	2.66	Cash

DRIP investing

The acronym DRIP stands for Dividend-ReInvestment Plan. DRIP let participating shareholders collect their cash dividends in the form of additional shares without paying a commission.

For example, if you own one share of a stock trading at $100 per share today and the company pays a $5-per-share dividend, your dividend would equate to 0.05 shares of stock. After the dividend, you would hold 1.05 shares.

It's a great way of increasing your shares which would result in gaining additional dividends! As I've said in previous posts, I own many company stocks that offer dividends. My highest yielding dividends come from Compania Cervecerias Unidas (NYSE:CU) @ 6.7% annual yield and Pengrowth Energy Trust (NYSE:PGH) @ 14.88% annual yield.

Check with your brokerage to verify that you are enrolled in any DRIP offered from the stocks in your portfolio.

mint.com

From a friend's recommendation I started using a website called mint.com, which basically tracks all your finances online in one location. It can track every penny you own or owe from your bank accounts, stock portfolio, 401k, and even outstanding loans you have on house/car/school.

It's interesting to see where you are spending money and what areas you can cut down on to increase savings. Apparently I spend a lot on Starbucks since I'm a fan of the new Vivanno drinks. The graphs also make this application very asthetic since I no longer have to track my own accounts with a spreadsheet.

As for security, mint.com uses industry standard 128-bit secure socket layer (SSL) encryption from Verisign similar to what Credit Card and Banks use for customers to view accounts and will automatically log you out after 5 minutes of idle time. Still many of my friends are worried about having all their account information stored in one place so this technology may not suit everybody, but I still like it.

Mad Money with Jim Cramer widget

Internet technology has matured enough now to show TV clippings from last night's show. Here are TV clippings from one of my favorite shows called Mad Money with Jim Cramer, who was a former hedge fund manager and stock broker at Goldman Sachs. Take his advice with a grain of salt because nobody is perfect, but still he has many interesting and informative things to say about current stock market trends.

A penny saved is a penny earned.

Today I sold off my Freddie Mac shares and it appeared to be a good move despite news of an 5.3% increase in pending home sales. Quoting Benjamin Franklin, "A penny saved is a penny earned." I saved my butt from losing another 10% on Freddie Mac. Then I decided to ride the housing slump and shorted some shares of Fannie Mae. With Fannie Mae reporting earnings at the end of the week, I assumed that the news would further deteriate its stock. I gained about 5% from the opening bell and found out fast that I wasn't able to stomach the swings associated with selling short and sold immediately this morning. I compare selling short shares of stock to that guy who bets on the "No Pass" line at the Craps table. Just feels like bad vibes and negative karma. So no more selling short for me.

FYI. Fannie Mae continued to decline another 8% and it looks like my assumption would have been correct that Friday's earnings was really going to drag down its price.

Pengrowth Energy Trust (NYSE: PGH)

With the market still currently in "bear" mode, I've continued to hunt for high dividend yielding stocks. I came across Pengrowth Energy Trust, which has been in business for 19 years and engages in acquisition ownership, and management of working interests and royalty interests in oil and natural gas properties in Canada.

What makes this stock attractive is that it currently pays $0.22/share on a monthly basis. That's over 15% annual return on dividends alone! Just like my posting about Compania Cervecerias Unidas (NYSE: CU), Pengrowth Energy Trust (NYSE: PGH) has a stock price that is depressed because of stock market momentum. With oil prices soaring, alternative sources of energy gain value as demand increases. So in my opinion, any sources of energy except oil have a chance to gain market share in the energy industry.

As long as I hold my stock positions, I like the fact that I will be paid $0.22/share on a montly basis (I own 500 shares so my income just went up $110 per month). Of course I'm never going to realize these gains since I'm enrolling in the Dividend Re-Invest Plan (DRIP). I'll blog about DRIP later.

=)

**UPDATE**
I finally blogged about DRIP here.

Bear Market Historical Trends

I read an article in the usatoday that in the 10 bear markets since the 1940's, statistically each bull market was followed by a bear market that has taken back 60%. In other words, for every $100 gained about $60 was taken back by the bear market that follows. According to the article, our bear market has taken about 44%.

I'm not one to argue against numbers (being an engineering major in school) so my estimate is that the market still has about 15 to 20% more to drop before we start to see some stability.

Below are some charts which show the Dow Jones Index from 1960 to its present day value.

Dow Jones Index 1960 to 1980


Dow Jones Index 1980 to 2000


Dow Jones Index 2000 to Present