Welcome to this week’s episode of Dividend Talk, where Derek and the European Dividend Growth Investor discuss portfolio allocation strategies. We reflect on how approaches to building a dividend-focused portfolio have changed over time, touch on recent dividend hikes, answer some listener questions about diversification, and offer tips for managing a growing list of holdings.

Timestamps and Tickers

Here’s a breakdown of the episode:

• 0:00 – Welcome and weekly updates
• 4:30 – Revisiting portfolio allocation strategies
• 10:00 – The balance between diversification and conviction
• 15:30 – News of the week: Bitcoin and election chatter
• 20:00 – Dividend hikes: $HPQ and $HRL
• 25:00 – Listener Q&A: Morningstar, fractional shares, and Canadian banks
• 40:00 – Managing small positions and trimming the portfolio
• 55:00 – Closing thoughts and discussion

Tickers mentioned:
$HPQ, $HRL, $MSFT, $AAPL, $ENB, $AES, $CNR

Key News

• Bitcoin Discussion: While not directly related to dividend investing, Bitcoin sparked a conversation about risk tolerance and speculative assets, especially from a long-term investing mindset.
• Election Updates: In Ireland, the focus was on the general election, highlighting the importance of staying informed on political developments as they can indirectly affect markets.

Dividend Hikes

• HP Inc. ($HPQ): Announced a 5% dividend increase, showcasing its continued commitment to shareholder returns. With strong fundamentals and a history of share buybacks, this remains a favorite for value-focused investors.
• Hormel Foods ($HRL): Increased its dividend by 3%, marking the 59th consecutive year of growth. While modest, it’s a testament to the power of consistency.

Main Topic: Portfolio Allocation & Market Drops

The conversation centred around adapting portfolio allocation strategies. Here are the key takeaways:

• Starting Small: Early diversification is tricky with a limited portfolio size. Focus on building core positions in high-quality dividend payers.
• Risk Tolerance: It’s okay to miss out on high-risk opportunities if they don’t align with your investment philosophy.
• Adjusting Allocation Over Time: Both hosts have streamlined their portfolios, aiming for fewer, higher-conviction positions while balancing income with growth.
• Cyclicals and Sector Weighting: Financials and consumer staples dominate, but opportunities in sectors like REITs are worth exploring when valuations align.

Listener Questions

The Q&A segment brought a mix of practical advice and personal anecdotes:

• Morningstar Fair Value and Moats: The hosts rely more on fundamental analysis than third-party ratings. Moats are subjective and vary by investor goals.
• Fractional Shares: A useful tool for small investors, though some prefer full shares for simplicity.
• Canadian Banks: Acknowledge their stability and growth but note the lack of interest due to personal biases and goals.
• Managing Many Positions: Regular “spring cleaning” of portfolios helps avoid over-diversification and keeps holdings focused.

Support Us

There are a couple of ways that you can support me if you like my content

Free Ways to Support Us

1. Follow us on social media. Twitter or DividendTalk (@dividendtalkpodcast) • Instagram photos and videos
2. Listen to our Podcast Dividend Talk | Podcast on Spotify
3. Follow my Buddy Home European Dividend Growth Investor – European Dividend Growth Investor (europeandgi.com)
4. Subscribe to my YouTube channel, Dividend Talk, on YouTube.

Affiliate links: I use these services. If you plan to use these anyway, it won’t cost you any more, but I may receive a commission.

1. Seeking Alpha – I use seeking alpha quite a bit. They have a free version, but I will get a commission if you sign up for the premium version. ( I use the premium version)
2. Buy me a coffee – if you don’t want to use any of the above services, you can always buy me a coffee.
3. Buy a bracelet from my niece – BraceletsByLucyIE – Etsy Ireland. I am trying to teach my niece what they won’t teach her at school. 15% of all profits are mine, but I donate this to charity as my main goal is to teach Lucy about business

Disclaimer

Dividend Talk is not a licensed or registered investment adviser or broker/dealer. We are not providing you with individual investment advice on this site. Please consult with a licensed investment professional before you invest your money. This site is for entertainment, informational, and educational use only.

Any opinion expressed on the site here and elsewhere on the internet is not a form of investment advice provided to you. We use information, data, and sources in the articles we believe to be correct at the time of writing them, but there is no guarantee of their accuracy, completeness, timeliness, or correctness. We are not liable for any losses suffered by any party because of information published on this site. Past performance is not a guarantee of future performance. By reading this site or subscribing to it, you agree that you are solely responsible for making investment decisions with your funds.