My Summer Investment To do List


Summer is the perfect time to NOT take a vacation from your portfolio

Investors often tend to leave their portfolio “as is” for the period between May and September. First, there is the old saying about selling in May and going away since summer months are not the most profitable on the market. Second, there isn’t much activity on the stock market in general. Q2 earnings are not that exciting and economic stats are not at their best. Third, most people take vacations, therefore, their mind is more at the beach than anything else. I think this is where we all make a big mistake. Taking a few hours during your vacation to review your investments is probable the best move you can make this summer.

In order to help you create your to do list, I’ll share mine with you.


#1 Review my performance

I do follow my portfolio returns on a monthly basis, but taking additional time to understand where the growth is coming from is also important. The end number is what matter since this determine if your portfolio works for you or not. However, if you have one or two stocks that surged, you might not be the next Warren Buffett and you may just be luckier this year than the average monkey.

I track performance of each of my holdings to make sure I have a strong portfolio and that each stock plays its role in my portfolio. Some companies were picked for their growth potential, others for their steady dividend payment and all of them were expected to increase their dividend payment. These are the things I look at when I review my performance. Then, I compare my results to the overall market and the VIG and XDV, two dividend ETFs (one CAD and one USD).


#2 Review my asset allocation

The second thing I look at is my asset allocation. Over the year, some positions have taken a bigger part of my portfolio. I’m thinking of Apple (AAPL) and Disney (DIS) for example which show total returns (excluding dividend) near 100% each. This means while my portfolio grew, those two holdings doubled their size in my portfolio. It’s important to make sure they don’t take too much % of my portfolio.

I like to have a relatively equal weight of all my holdings. I often use dividend payments to buy more shares of a company or to rebalance my portfolio in order to maintain a solid asset allocation. If you have too many stocks in the same sector, you become highly dependent of a specific industry to generate returns.

For example, many Canadians hold all Canadian banks. They are strong companies paying very good dividends. However, holding too many banks will eventually put your portfolio at risk (remember what happened to the people investing solely in oil income trusts in the 2000’s…).


#3 Review my investing fees

Since I manage my own account, the investing fees are minimal in my brokerage account. This might not be the case if you deal with a broker or an investment adviser selling mutual funds. I’m not saying it’s a bad thing to pay management fees (also called MERs) but you must know how much you pay and why you pay them. If you don’t get proper advice and a constant follow-up on your investment, you might be paying for nothing.

The second investing fees section is the investment services I pay for. There are various investing platforms and newsletters (like mine; Dividend Stocks Rock) which provide portfolio models, stock lists and bi-monthly investing newsletters.

I currently pay for a professional plan with Ycharts costing $300/month to manage my accounts and offer my Dividend Stocks Rock (DSR) services. I make sure I have access to all data to correctly analyze and follow each stock in our portfolios. I’ve also registered to a few paid newsletters to get the best information sources.

I’m not going to tell you it’s a bad thing to pay for such services since I even sell my own hahaha! However, the important point is to make sure you use what you pay for. Many investors simply register for investment information services and never read them. They either lack of interest or simply don’t take the time to use the tool they paid for. In this situation, you might as well cancel your membership and save your money. Registering to an investment service doesn’t make you a better investor, using the investment service does.


#4 Prepare my watch list

Stocks are usually pretty stable over summer time. This is the perfect timing to run your stock screener and start looking for your next potential purchase. You have more time to look at different industries and you have more chances of making rationale decisions. Once your list is done, you will be ready to either make a purchase by the end of summer or wait for Q3 earnings to confirm your analysis and make your purchase during fall.

At DSR, we have created a buy list (more info on it here) with 10 stocks to buy right now. The list was created two months ago and we already closed our first trade with over 40% in return after two months only. We rapidly updated the list and add another very interesting stock.


#5 Don’t hesitate to make moves

I like summer to make trades because it’s a moment in the year where the rest of my life is cooling off. Vacations help a great deal to clear my mind off work and daily household tasks. I often surprise myself by waiting a few weeks to make a trade during the rest of the year under the guise that I was too busy to make the move. I needed more time to analyze the situation and didn’t want to trade without proper reflection. Well summer time is the perfect occasion to take my time and make the right investment decisions!


Do you have anything on your summer investment to do list?



Disclaimer: I hold shares of AAPL, DIS

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