Swingin’ for the fences


OK, so I recently put together a little somethin’ somethin’ about a strategy I use to grow my portfolio.

I call it the Cycle Method.

I broke things down the best I could in a previous post, but, if you’re anything like me, a real-life example never hurts when trying to understand a random concept made up by a novice blogger.

Well, here’s a real-life example of one-fourth of the cycle … the homer:

I knocked one out of the park today (Friday, June 9, 2017). In baseball, hit one over the fence and you get to trot around the bases … all four of ’em. The investing version of a round-tripper involves adding to your portfolio in four different ways.

My portfolio, which consists of 100-plus dividend stocks, grew by $134.57 today. Capital appreciation, the one way your portfolio can grow that pretty much has nothing to do with you, at least on a day-to-day basis, provided the biggest bump (+ $83.80). In baseball, a homer counts as four bases. In terms of investing, that appreciation counted as one.

If I didn’t do anything else, I would’ve considered today as a single. I did so something else, though … and so did my portfolio.

My part was a deposit (+ $50), which counts as another base. My portfolio did some work for me, too, as I received a dividend from XOM (+ $0.77) … another base. That’s how I grew my portfolio by a nice chunk o’ change ($83.80 + $50 + $0.77 = $134.57). The best part about it is I only invested $50 and my portfolio grew by almost three times that.

The dividend, deposit and capital gain, without the fourth base I’m about to mention, would count as a triple. I added to my portfolio in a fourth way, though, buying a share of VZ for $46.47. I now have three shares of VZ worth $139.44 (1.08% of my portfolio). The purchase brought my cost-basis down more than $2 as my average cost dipped from $52.57 to $50.54, something I’m certainly not upset about.

Now, the purchase didn’t increase the value of my portfolio in the short term – I basically used my entire deposit – but it did provide an all-but-certain bump in future gains, boosting my forward dividend income by the amount of its annualized divi ($2.31), which yields 5%.

Make sense?

I hope this example brings more clarity to my Cycle Method, something I think can help anyone who is into micro investing as much as I am. Little gains here and there, especially if you can make them daily, can and will lead to big gains down the road. If I had a single, double and triple earlier in the week, this home run would’ve completed a cycle. I plan on tracking whether or not I get a cycle each week from here on out, so stay tuned. The goal is to get a cycle each and every week … and have some fun while doing it.