- Yearly dividend change
- Number of shares held.
The rationale behind this is simple: there is no point in measuring the market valuation of the assets held. Caring about the market valuation is important if once wishes to speculate on price movements; I do not.
Our main goal with investing is to create a steady and ever growing base of rent generating assets. As such, the yearly dividend change is the metric to focus on. It is therefore more interesting to post the number of shares held and their rent generating capacity than is the valuation of the asset.
The only thing that becomes a bit more difficult with only using dividend and number of shares held is the rebalancing of the portfolio. The solution to this is
- While in cash position (as we are now with almost 50% of the holdings in cash), the investments are rebalanced by simply buying more of an undervalued stock/ETF.
- Once cash position is reduced to around KSEK 100, the yearly rebalancing will take place using a net present value of future dividend payments.
The net present value of future dividend payments will result in a focus on dividend growth stocks for now, and more stable dividend payers later. To avoid a situation where everything goes into stable dividend stocks and hampers future growth, the portfolio will also take into account the amount needed to live comfortably (around KSEK 30 a month, which, today, is about MSEK 12).
