It’s time to start planning your dividend portfolio moves for 2012. With a new year to consider, and new conditions in the market, it’s time to decide what you are going to do for a better dividend portfolio. Here are 4 ways to improve your dividend portfolio for 2012:
1. Re-Examine the Purpose of Your Portfolio
Now is a great time for self-reflection – and that includes reflection on your financial situation and your investments. Consider the purpose of your dividend portfolio. Are you still in growth mode, trying to put together a portfolio (with the help of DRIPs) that will provide you with income later? Or have you already shifted into position to receive income from your portfolio?
Figure out what you want to do with your dividend portfolio, and what you hope it will accomplish. Make sure that, in 2012, your investing moves are geared toward helping your dividend portfolio accomplish what you want it to do.
2. Look for Interesting New Additions
Strengthen your dividend portfolio with interesting new additions that help your fulfill the purpose of your portfolio. Look at the allocation in your portfolio, and determine if you could use a little more diversity. Then, look around for some fresh stocks to add. If you are looking for a little more solidity, start with the latest additions to the ranks of dividend aristocrats for ideas. Or, you can look at some of the latest high dividend growth stocks for some interesting options – if that’s what you feel your portfolio needs.
3. Drop Dividend Stocks that Aren’t Working for You Anymore
Honestly evaluate your portfolio. Sometimes, holding on to a loser, just because it used to be a winner, isn’t the best option. Take a look at the fundamentals, and determine whether that stock is serving the purpose of your dividend portfolio. Get rid of the stocks that aren’t working for you. Dividend cuts, management changes, and shrinking industries can all be signs that it’s time to get out. Your dividend portfolio’s performance will improve in 2012 if you can get rid of some of the dead weight.
4. Be Ready to Snap Up Great Deals
While 2011 ended on something of a high note, with signs of U.S. economic recovery, there is still a great deal of market volatility. Indeed, there is the potential for big losses in 2012 – depending on the way the cookie crumbles. Europe is still a mess, and there are whispers that China isn’t as solid as we’ve been led to believe. This is a recipe for stock market chaos later on. Keep with your current plan for your dividend portfolio, but try to arrange your finances so that you are able to jump on opportunities that may arise in 2012 for good bargains. You can bolster your dividend portfolio with cheap stocks if you are prepared for the possibility of a fire sale on equities at some point in the next year.