Jean-Louis's wallet

[Anonymous]

Good morning,

After much reading and learning since August 2012, I have decided to present the portfolio that I have put together. I have decided to adopt the strategy of increasing dividends, by mixing Swiss and foreign securities in equal proportions. But my first investments – fortunately few in number – were more random… J

First of all, since 2006 I have had a third pillar of the life insurance type linked to two investment funds, one bond (https://fundlab.credit-suisse.com/index.cfm?nav=fund_detail&id=LI0148578045) and the other in shares: (https://fundlab.credit-suisse.com/index.cfm?nav=fund_detail&id=LU0054754816&language=fr) (both mainly made up of Swiss securities). I pay CHF 200/month into them. I signed up for these funds without any knowledge of the stock market. This investment allows me to deduct the maximum of CHF 2,200 on my tax return (Geneva). I also have a third banking pillar at Postfinance, which reduces the tax burden.

Before discovering dividend growth investing, I had bought some stocks that I have since sold because their dividends were not interesting: Swisslog Holding, UBS, Richemont and Nike. I made profits on these resales and reinvested them in dividend stocks.

Since there are far more dividend-growing stocks in the US than in Switzerland, I invest half the amount I invest in Swiss stocks in US stocks. While most of the stocks I bought are listed on Dividendes.ch, others were found by surfing the websites of the companies themselves or on sites such as Seeking Alpha or dividendgrowthinvestor.com. Below are the portfolios of Swiss dividend stocks (with some information for stocks not listed on this site) and US dividend stocks:

Swiss stocks

Bell

Nestle

Novartis

Rock

Swisscom

ABB (yield 3.17%, dividends paid for 8 years with dividend increases six times, average annual dividend growth of 12% over the last five years, payout ratio 64%)

Syngenta (yield 1.58%, dividends paid for 10 years with dividend increases nine times, average annual dividend growth of 38% over the last five years, payout ratio 43%)

Zurich (yield 6.63%, dividends paid for 13 years with dividend increases seven times, average annual dividend growth of 4.4% over the last five years, payout ratio 70%)

On my "Buy list": Implenia (yield 2.82%, dividends paid for 5 years with dividend increase each year, average annual dividend growth of 23%, payout ratio 37%) and Jungfraubahn

US Actions

Air Products & Chemicals (APD)

American States Water (AWR)

Johnson & Johnson (JNJ)

Lorillard (LO)

Phillip Morris (PM)

McDonald (MCD)

Molson Coors (TAP)

Procter & Gamble (PG)

Clorox (CLX)

Wal-Mart (WMT)

Conoco Philipps (COP)

Microsoft (MSFT)

Wells Fargo (WFC)

On my “Buy list”: Coca-Cola (KO), Royal Bank of Canada (RY), Chevron (CVX), and many others…

In the future, I would also like to acquire dividend-growing stocks in Euros, most of which are included in the international portfolio of this site.

Your comments are welcome, especially on mutual funds. I wonder if I would not be better off investing this money in other dividend-paying stocks. What do you think? And diversification in Euros?

Have a nice weekend!

Jean-Louis

[Jerome]

Hi Jean-Louis

like you I also have a pillar 3a and 3b, especially for tax reasons. As for the funds, we'll see, but I think you don't have much choice if they are linked to life insurance?

The titles you present are all worthy of interest. Personally I find ABB a little too volatile for my taste.

Did you build this portfolio gradually or did you do a batch shot?

There are two Swiss stocks you mention, Syngenta and Zurich, which I will analyze in more detail and possibly add to my Ex-US strategy because they may be interesting.

For euro securities it is indeed always useful to bring a little diversification in currencies, especially for portfolios very oriented towards USD.

[Jerome]

Thank you for your answers.

For the 3rd pillar life insurance, I can a) stop the payments, which obviously drastically reduces the insured amount or b) terminate the contract (but then I lose the payments for the first three years...).

I have been gradually building up the portfolio over the past six months. I am now short on cash and plan to set aside my future savings to supplement my portfolio during significant corrections.

For diversification in currencies, it seems that dividends from UK stocks such as Diageo or AZN are not taxed at source (I will still check), which could be more profitable than French stocks.

 

[Jerome]

As for your 3rd pillar life insurance, I would keep it. For me it is something different than dividends, especially useful from a tax point of view and also an additional security.

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