Dividend Portfolio Sector Allocation December 2015

Every few months I like to take a look at my portfolio holdings and examine my overall sector allocations to see if they meet my comfort level as to how my capital is distributed. Now that we are officially approaching the end of 2015 I think it’s as good a time as any to see how my stocks are allocated sector-wise, especially since I do not expect to make any more buys this month.

As we all know, market forces affect certain sectors at different times throughout business cycles which can often throw many portfolio balances out of sync. In the last year and a half or so we have witnessed the more than halving of crude oil prices as it knocked down all energy related companies and as a result it seemed every dividend income investor was buying an oil major, oil driller, oil services or pipeline company. With attractive valuations and higher yields being offered many dividend growth portfolios began to skew heavily towards energy related stocks. Too often I read among the other dividend blogs how heavily skewed their portfolio weights are towards energy, even though tempting values and yields persist.

2015 also saw the large Canadian banks get decimated as a variety of near term headwinds such as lower oil prices and a weaker Canadian dollar among other factors have dragged down Canadian dividend stalwarts The Toronto-Dominion Bank (TD)The Bank of Nova Scotia (BNS) and Royal Bank of Canada (RY). I am very much looking forward to seeing the calendar read 2016 as it will mean my ROTH account will be ‘open for business’ once again with a fresh $5,500 available for investment in those beaten down banks.

Of course, earlier this year we also saw the health REITs take it on the chin as Fed interest rate hike chatter dragged that whole sector down, though in recent weeks have bounced back quite nicely. Great opportunities for initiating or adding to HCP, Inc. (HCP)Welltower Inc. (HCN) and Ventas, Inc. (VTR), to name a few, could have been had as recent as early November.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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