by Yoda

2023 was wild! started with bank failures and who would have guessed ended with S&P500 up 25% and Nasdaq 42%. Sandwiched in between were countless calls for a recession which never arrived, thanks to the power of American consumerism. Here is my dividend income update for the year 2023 & what I did with my portfolio.

Dividend Income Update 2023

I made 5945 USD from my positions in 2023! It came from the following stocks and ETF’s:

dividend income update 2023
Dividend Income Update 2023

This represents 18% increase as compared to last years dividend income update. Here is percentage breakdown of income from different stocks in the portfolio.

dividend income update 2023 percentage
2023 dividend by percentages

My goal for the last 2-3 years has been to decrease the percentage of dividends from individual stocks like NATI, MO in each dividend income update. NATI went from 26% to 16% in 2023! NATI also got bought out by Emerson in 2023. This will eliminate my NATI dividends in 2024. That sucks in the long run since those dividends were compounding for me. However I did make a 100% return on my investment.

My Buys in 2023

Despite the 18% increase in VTI in 2023, there was lot of volatility in the market due to interest rates. Fed kept raising rates till middle of the year and paused since then. This lead to great buying opportunities in REIT’s, stable dividend stocks.

I initiated a new position in Alexandria Real Estate Equities Inc (ARE). They got beaten down due to interest rates and the office real estate industry they operate in. However they are not any typical office space. They are into offices for biotech companies which have very special requirements.

Started a new position in Charles Schwab Corporation Common Stock (SCHW) after they got beaten down due to the banking crisis in the first half of the year.

Initiated positions in Vanguard Total Bond Market Index Fund ETF (BND) and Vanguard Total International Stock Index Fund ETF (VXUS). I want to have more dividend income coming from ETF’s in future. Buying BND is also a bet on interest rates coming down and it can give me some capital appreciation as well.

Healthcare also had a down year in 2023. I took this opportunity to start positions in Johnson & Johnson (JNJ) & Medtronic PLC (MDT). Both have excellent credit ratings and a very safe dividend. I believe these two can whether any storm and are excellent additions quality wise in my portfolio.

Apart from the new adds I increase my positions in O, VZ, VTI, ORCL throughout the year.

My Sells and dividend cuts in 2023

As mentioned before NATI got acquired which let me to let go off my stake.

I also sold LW, ONL as they were too small a position in my portfolio and contributed for very less dividend.

I faced dividend cuts in VFC and INTC both of which I still hold. INTC went down 50% and has come back in the past year. I still like the brands VFC owns and want to see them succeed in the long term.

Performance for the year 2023

I ended the year at 28.6% as compared to 25.5% for SPY and 42% for Nasdaq. Another year of beating SPY/VTI in the books. Here is a neat timeline of dividends thrown by my DGI portfolio over the last few years which shows compounding of dividend income in action.

Plans for 2024

I will continue to buy more etf’s and want to see them becoming a much bigger part of the next annual dividend income update. Reduce dependance and risk from dividends from individual stocks. Add/increase position sizes in highest quality dividend payers.

Dividends stocks do come with some risk, but with precautions you can avoid the risky one’s and choose the best dividend paying/growing stocks for your portfolio. I prepared a guide where I discuss some key ratios, fundamentals, some important resources to look at while deciding to buy a dividend stock. Also find out how to get free access to Morningstar, Value Line, workaround paywall behind popular news sites like Seeking Alpha etc.  Consider signing up for free instant access to the pdf version of the insights into dividend investing.

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