This is the continuation of the “The Lazy Man Portfolio – A Rethink“. I am breaking it down into several parts so that it is more manageable for my brain and to gather feedback.
|Total Portfolio (stocks only) as of 16-Jan-19||$49,301.21|
|2019 Projected Dividend ($)||$2,371.58|
|2019 Projected Dividend Yield (%) based on current price||4.81%|
|2019 Target Dividend ($)||$4,300.00|
|Dividends shortfall ($)||$1,928.42|
|Cash on hand||$35,000.00|
|Yield Target ($)||5.51%|
I set a target of 5% yield of $86,000 which equals to $4,300 dividends in 2019.
My current stocks will give a projected yield of 4.81% which is pretty close to my target of 5% yield. However I have a large cash portion of $35,000 which generates at most 1% interest in my CIMB savings account and the challenge is how to deploy it to make up for the dividend shortfall of $1,928.42.
The simplest way is to invest all my cash into a derivative that gives me 5.51% yield. However that will leave me with zero cash. Although I will still be able to build up my cash reserves ($1,000/month), I won’t be able to take advantage of any opportunity if a crisis strike in the near term.
Even if I decided to take the simplest option as mentioned above, I am also not confident in finding one stock that give me a 5.51% yield.
Ideally, I will like to split my cash into 2 to 3 stocks over a period of a few months so that I can minimise risk by diversifying and my cash will not fall immediately to zero. That said, it only adds to the complexity.
Hope to hear from you guys.