In this episode, we take a detailed look at our 2025 Q4 dividend portfolio review and reflect on what the year really delivered for long-term dividend growth investors. If you’re building a portfolio for financial independence, this review matters because it highlights what worked, what didn’t, and how consistency, currency effects, and reinvestment shape real-world results over time.

This episode was recorded in 2026. The principles are evergreen, but market conditions, valuations, and individual company circumstances can change over time.

Looking Back on 2025 as a Dividend Investor

2025 turned out to be a strong but imperfect year for dividend growth investing. Both portfolios delivered solid income growth, but not without trade-offs. The biggest takeaway was that progress still happens even when life disrupts ideal investing habits. Dividends continued to grow, reinvestment became more powerful, and long-term discipline once again proved its value.

At the same time, the year highlighted how easy it is to drift from consistency. Cash held back for life expenses, irregular investing during parts of the year, and currency swings all left a visible mark on results. None of these were catastrophic, but they reinforced why structure and routine matter so much in dividend investing.

Portfolio Performance and Dividend Growth

European DJI’s portfolio delivered a strong year overall. Net dividends received grew by 17% year over year, even after accounting for tax and currency headwinds. Quarter four dividends alone were up roughly 14% compared to the same period the year before, while the portfolio yield ended the year at around 3.7%.

Dividend reinvestment played an increasingly meaningful role. Roughly a quarter to a third of new purchases came from reinvested dividends rather than fresh capital. This is where compounding really starts to show its strength, especially once portfolios reach a certain size.

On the value side, the portfolio increased by about 15% including currency effects, or roughly 9% excluding new capital contributions. For a dividend-focused portfolio without heavy exposure to mega-cap growth stocks, this was a result to be satisfied with.

Currency Impact and the Dollar Effect

Currency movements were one of the defining themes of the year. With a large portion of portfolios exposed to US-dollar assets, the weaker dollar reduced reported returns and dividend income for euro-based investors. In some cases, this shaved an estimated 5–6% off dividend income growth.

Rather than hedging, the approach remained simple: accept currency volatility as part of international diversification and continue euro-cost averaging over time. The lesson here was less about predicting currencies and more about understanding how they can temporarily distort results, especially for investors approaching financial independence.

Buying, Selling, and Portfolio Changes

The year included a mix of new positions, position increases, and selective exits. New investments focused heavily on quality and durability, including businesses with long dividend histories, strong balance sheets, and clear cash flow generation.

On the selling side, several positions were exited primarily for tax-loss harvesting or portfolio simplification. Some investment trusts no longer fit the original thesis, while certain holdings were trimmed to reduce overlap or improve overall portfolio clarity. The key theme was intentional decision-making rather than reactive trading.

Importantly, portfolio turnover was lower than in previous years. That was a deliberate goal coming into 2025, and it largely paid off by improving focus and conviction.

Consistency, Savings Rate, and Real-Life Constraints

One of the most honest reflections from the episode was how life affects even the most disciplined plans. Savings rates dropped significantly during the year due to home projects, travel, and family priorities. Monthly investing became less consistent, even though dividend reinvestment helped mask some of the impact.

The clear conclusion was that “paying yourself first” needs to be non-negotiable. For 2026, the focus shifts back to a strict savings rate, monitored more frequently, with investing treated as a priority rather than something that happens if there’s money left over.

Dividend Growth Measurement and Portfolio Tracking

The episode also addressed how dividend growth is measured in practice. The simplest and most reliable method discussed was comparing dividends per share for holdings owned at the start of the year against dividends paid at the end of the year, excluding new positions.

This approach avoids distortion from new purchases or timing issues and keeps the focus on organic dividend growth. While not perfect, it provides a clear and repeatable way to track progress without unnecessary complexity.

Companies Mentioned in This Episode

Throughout the episode, we referenced a wide range of companies to illustrate portfolio decisions, dividend growth patterns, valuation discussions, and investor psychology rather than to make specific investment calls.

On the income and defensive side, we discussed companies such as British American Tobacco, ASR Nederland, NN Group, Shell, Ahold Delhaize, Legal & General, VICI Properties, Realty Income, and Omega Healthcare Investors, mainly in the context of dividend reliability, yield sustainability, and portfolio concentration.

Quality and growth-oriented businesses were also mentioned, including Euronext, Automatic Data Processing, Wolters Kluwer, Merck & Co., London Stock Exchange Group, Alphabet, Microsoft, and Nike, typically as examples of valuation discipline, long-term growth expectations, and execution risk.

We also touched on several other businesses in specific listener questions or comparisons, including General Mills, Starbucks, Paychex, HP, Altria, Philip Morris International, and Hornbach, often to highlight how personal experience, geography, and risk tolerance influence investment decisions.

These are mentioned for context, not as recommendations.

These are mentioned for context, not as recommendations.

Chapters From the Episode

0:00–3:10 – Welcome and episode overview
3:10–7:30 – Dividend increases and market context
7:30–14:30 – European DJI’s Q4 and full-year portfolio results
14:30–21:30 – Currency impact and dividend reinvestment
21:30–31:00 – Derek’s 2025 portfolio review and lessons
31:00–37:00 – Buying, selling, and dividend safety thinking
37:00–45:00 – Listener questions on growth, taxes, and tracking
45:00–52:30 – Biggest learnings and goals for 2026
52:30–1:06:15 – Final questions and closing thoughts

Where to Go Next

If you enjoyed this review, you may also find these episodes useful:

EP 144 – Why Dividend Investing Is Still the Best Strategy
EP 233 – Dividend Investing with Dividendology

These episodes expand on dividend growth measurement, long-term discipline, and portfolio construction from a European investor’s perspective.

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