My 2014 Year in Review and Portfolio Asset Allocation


A couple of weeks ago, I listed my personal goals for 2015. It will be a very busy year as I expect to retire from my day job in 2016. But besides my personal goals, I also have to take care of my investments! Let’s take a look at how I did in 2014…


2014 Portfolio Review

I’m quite satisfied with my investment return in 2014. At one point in time, I was almost beating my 2013 return! But then the price of oil sunk and hit my portfolio. I finished 2014 with a respectable +16.4% (including dividend). My portfolio pays a current dividend yield of 2.79%. This seems pretty low, but that’s because several of my picks went up greatly in the past two years (I’m over +30% since January 2013). Another interesting fact is all companies I hold raised their dividend in 2014.

My best moves in 2014 were to increase my position in Apple (AAPL) and keep investing my new money in US stocks. As a Canadian, this boosted my return since the Loonie kept losing feathers to the Greenback. Apple is just an amazing company and it will continue to rock the mobile market now that Samsung is experiencing margin problems due to its “shoot everywhere and hope to kill” marketing strategy.

Among my best performers (besides AAPL at +39.69% before dividend), I have Lockheed Martin (LMT) (+31.83%) and Disney (DIS) (+23.50%) with high returns excluding dividend. I have also many companies showing small double digits returns including dividend (JNJ, NA.TO, GS.TO, T.TO, WMT).

My worst moves (so far) were to sell CVX and HSE and replace them with two oil related companies: Helmerich & Payne (HP) and Black Diamond (BDI). So far, both stocks are down the drain since the price of a barrel can’t stop falling. HP drills wells so investors are afraid the company may lose exploration contracts and Black Diamond rents modular equipments/homes and their major clients are oil sand exploration companies in Alberta. Numbers should be all right in 2015 since both companies will continue to honor their current contracts. However, I don’t expect a dividend increase this year for these two stocks. As long as oil prices remain volatile, they will be a heavy weight in my portfolio that I have to carry. At least, the dividend is good!


Asset Allocation Review

After working on my portfolio since 2010 to make it a 100% dividend stock investment in 2012, I have finally achieved a great diversification in terms of asset allocation:

dividend guy asset allocation

68% of my portfolio is invested in US stocks compared to 32% in Canadian companies. My biggest sector is Consumer, cyclical with 18% followed by all other sectors between 13% and 14%. It’s a well balanced portfolio preventing any market hit on a single sector. Therefore, even if my two oil related stocks (HP and BDI) continue their drop in 2015, it won’t affect my portfolio much (combined together, they are worth less than 9% of my portfolio.

Since I expect to sell everything and leave on my RV trip, I don’t plan on adding new money in this portfolio for 2015. This will be the first year I skip an RRSP contribution. I prefer to use my money to pay off all my personal debts in order to improve my financial situation before I leave. The plan is to sell everything and keep roughly 50 to 60K invested (on top of my RRSP). I’ll have 0 debt and don’t plan on withdrawing money from the 50-60K either. Therefore, upon my return in late 2017, I should have enough cash for a down payment to buy another house!

There are a few companies I’d like to add to my portfolio at the moment but I’m also happy with the ones I have in hand right now. Therefore, I don’t expect to trade much in this portfolio, sadly!

Investment Return Expectation

I’m pretty confident in the US economy for 2015 and since my portfolio is almost 70% invested in US stocks, I’m looking to get another double digit return this year, what are your return expectations?

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