I more than doubled my goals this week with a little over $100 dollars in beer money income. I also added four more shares of stock to my monthly dividend portfolio. I don’t expect to maintain this pace and so I will keep my goals the same for now. I expect a few extremely slow days over the holidays so it’s anyone’s guess as to whether or not I’ll even be able to reach my income goal each week.
I want to talk about diversification. And this is mostly me getting my thoughts out. Diversification is a strategy for risk management. In my case – especially because I am being extremely aggressive with this dividend portfolio – diversification should help mitigate some risks. So for example, if I buy a monthly dividend stock in one industry and the dividend gets cut because of unforeseen circumstances in the market, then hopefully the reason it got cut won’t affect the stocks that are in other industries in my portfolio.
The reason this is top of mind is due to the fact that a dividend cut happened today. SLG announced that they would be lowering their dividend to 0.27 cents per month next year. I think that’s a smart move for the company overall in this market and I suspect they will pay out a special dividend at the end of 2023 that will likely make up for cutting the dividend. I also think they’re still a buy long-term, but this whole game is about getting to $100 dollars a month in steady dividends so a cut doesn’t exactly help me in this particular scenario. Despite that and the parameters I set for myself in my first post, I still think it’s a solid purchase because the dividend is still high at 8%.
Because of that cut, I have endeavored to diversify more. I am still going with fairly speculative purchases, but diversification should help. So today I bought 1 share of SLG, 2 shares of PSEC, and I added 1 share of JEPI. JEPI is not so much a stock as it is a financial instrument created by J.P. Morgan. They do some fancy financial work on the back end to generate a higher dividend. The idea seems solid, but it’s so new that there’s no way of telling how it will work out in the long run. Purchasing JEPI is both risk management and a bit of a gamble and I acknowledge that, but I am purchasing it with extra income that I’m making in my spare time.