More Big Changes To My Dividend Growth Portfolio

seekingalpha03-18

I have been actively reshaping my portfolio by selling off low-conviction holdings and focusing on high-growth compounders.I have reduced my holdings from roughly 90 to roughly 70 over the past 6 ...

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PM ImagesLate last year, I published an article titled, “Why I Made Big Changes To My Dividend Growth Portfolio” which highlighted a series of sales that I made to help pay for a new home that we’re building. At the time, I mentioned that I wasn’t only looking to make the deposit on the build, but that I was also looking to simplify my financial life a bit by reducing my portfolio holdings. When thinking about streamlining holdings, I wanted to begin taking steps to reduce/eliminate exposure to certain industries that I no longer felt strongly about. In short, I wanted to get more concentrated into my top ideas (typically, high growth compounders) and reduce exposure to low growth, deep value/high yield-centric ideas. For years, I've beaten the market consistently with my original DGI-centric approach; however, I believe that his more concentrated, compounder-oriented strategy will yield even better long-term results while also saving me time/energy in my day-to-day life. The process that I began late last year has continued throughout 2024 thus far and therefore, I wanted to provide another update on my portfolio, highlighting many of the trades that I’ve made thus far in 2024 as I slowly, but surely, reshape my portfolio. In doing so, I’ll provide several charts showing my dividend growth trends/trajectory and a table that includes my current holdings, cost basis, gain/loss %, and portfolio weightings to give readers a sense of how the dividend growth investing strategy can work over time. Dividend Growth Results First and foremost, let’s talk about my dividend growth results (which are the foundation of my financial freedom plans). If you want to read about recent trades, skip down to the next sub-header.   Nick's Data 2023 was an amazing year for me in terms of passive income, largely because of the fact that I was able to generate high yields on my cash position (my organic income growth was nowhere near 45%; however, active management and asset allocation decision-making provided massive gains). I am thankful for high yields on money market funds, but they are going to result in very tough comps for me to clear in 2024. So will the trades that I made late last year to begin paying for our new home, alongside several of the trades that I’ll discuss below. But, it takes time for these headwinds to trickle into my dividend results. So far, the first two months of the year have been great. In January, I posted 54.5% y/y income growth. And in February I posted 19.44% y/y income growth. At the end of February, I was up by 35.28% compared to the first two months of 2023. But, looking forward, I expect to see negative results begin to show up because of asset allocation/trades that I’ve made during the last 6 months or so and therefore, I wouldn’t be surprised to see my 2024 passive income come in below my 2023 passive income (this would be the first time that I’ve ever generated negative y/y passive income results).   Nick's Data Even so, we’re excited about our new house. And looking out over the long-term, I think a bit of a re-set with regard to some of my low conviction, high yield positions (potential value traps) was warranted. I don’t manage my portfolio with the next month or quarter’s results in mind. Instead, I’m thinking about my financial position 5-10 years down the road and as I continue to reshape my portfolio, I believe that the overall quality of my holdings continues to improve. While my passive income may be lower this year, I believe that I’m setting the table up nicely for continued double digit annual income growth in 2025 and beyond.   Nick's Data Over the longer-term, I believe that this red trend-line will continue along its positive exponential slope. Reshaping My Portfolio Now I’ll highlight all of the sales that I’ve made since the start of 2024 as I take steps to get more concentrated into my highest conviction ideas. On 1/2/2024 I sold Cummins (CMI) at $240.02, locking in 10.3% profits. This one was unplanned, but simply. I didn’t have any plans to sell my CMI position at the end of last year. I thought shares were undervalued, the yield was solid, and I liked the total return potential in a mean reversion situation if/when the industrials caught a bid. But, the illegal defeat device issue and the $1b+ fines were an unforeseen issue for me. Since I was sitting on profits when the news broke, I sold my shares due to lost trust with management (at the end of the day, I feel as if I can’t trust the management teams of the companies that I own, then I shouldn’t own them). When thinking about reducing my position count, that was an easy call. On 1/2/2024 I sold Digital Realty (DLR at $134.52, locking in 169.7% profits. Digital Realty was a stock I was going to sell in 2023 when raising cash to make the deposit payment on my new home build, but I didn’t want to take the tax penalty since I already had massive capital gains locked in. Well, as soon as the year reset, I went ahead and locked in triple digit profits here because of poor dividend growth metrics and a high valuation. At ~24x AFFO, I thought DLR was pricey (given its mid-single digit growth prospects). Furthermore, DLR hasn’t raised its dividend since March of 2022 and therefore, the stock was breaking a fundamental rule in my portfolio. Any company that goes 8+ quarters with the same dividend payment is a prime sell candidate for me. Once again, locking in profits on DLR was an easy decision here when thinking about simplifying things a bit. I used the DLR proceeds to bolster my bear market cash position. This cash is now sitting in SPAXX, generating a higher yield than DLR, while the same (0%) income growth expectations. With markets hitting new all-time highs I wanted to start preparing for the next sell-off. I don’t know when it will come, but when it does, I now have my full cash arsenal ready to go (just like I did during the 2020 and 2022 sell-offs). On 1/11/2024 I sold Carrier (CARR) at $56.95, locking in 74.3% profits. I think Carrier is a fine company. But, I was disappointed in its most recent dividend raise (just 2.7% on a y/y basis) and being that CARR was a very small position for me (less than 0.20%) I was happy to take profits in the new tax year. Because of the poor 2023 dividend raise, I had to plans to add to CARR anytime soon. And therefore, due to the small position size, selling the shares made sense so that I no longer have to track the company. Basically, this one was just about efficiency and saving myself time/energy/stress in the due diligence/portfolio management process. I bought more shares of Visa (V) with the Carrier proceeds. On 1/22/2024 I sold Lowe’s (LOW) at $219.30, locking in 62.3% profits. Late last year I wrote this article explaining why I sold my Home Depot (HD) shares. In short, when thinking about reducing my position count and getting more concentrated into my top ideas, I’m selling out of low-conviction areas of the market. One of these industries is physical retail. I’ve been buying Amazon (AMZN) aggressively throughout 2024 to replace this exposure. I prefer that way to play the consumer since it comes with the secular growth tailwinds associated with cloud, digital ads, and AI growth. With the LOW proceeds I added to existing positions in Amazon (AMZN), Rexford Industrial (REXR), Air Products and Chemicals (APD), and I started a new position in Elevance Health (ELV). On 2/1/2024 I sold Pfizer (PFE) at $26.96, locking in 29.3% losses. Another area of the market that I’m looking to reduce exposure to moving forward in the bio-pharma industry. To me, this industry is just too unpredictable. It has always required M&A execution to work (blue chips in this space have to use the sales from their blockbuster drugs to buy future revenue growth before patent cliffs arise). And when you throw in regulatory threats and the potentially significant impact of AI on the industry (from a research/development point of view) I think things are going to become even more unpredictable. On top of that uncertainty, I worry about the competitive moats of the companies that I own because of the inevitability of patent cliffs. Honestly, I’m not sure that it’s possible to assign a wide moat rating to any of these companies, no matter how strong their drug portfolios and balance sheets are, because of the nature of the industry regarding patent cliffs. The fact is, I’m not a scientist. I don’t have advanced degrees in chemistry or biology. And therefore, it’s difficult to keep up with the early stage pipeline assets that these companies own/acquire via M&A. I track the portfolios of a lot of so-called “super investors” that focus on wide moat, monopolistic compounders and one of the common themes that I’ve noticed is the lack of bio-pharma stocks. When thinking about simplifying my portfolio and life, I’ve decided to follow a similar path. I still own a handful of bio-pharma stocks. I’m not in a hurry to make this transition. But slowly and surely, I expect to exit the industry and I decided that selling PFE - which was my lowest quality/conviction pick in the space - was a good place to start. On 2/1/2024 I sold Federal Realty Investment Trust (FRT) at $101.81, locking in 11.4% losses. When thinking about moving away from physical retail, FRT was another company at the top of my sell-list. The company trades with a premium valuation to peers and while there’s an argument to be made that its top-tier portfolio warrants it, I was happy to take FRT shares off of the table and reallocate the funds towards a higher yielding Realty Income (which also offers exposure to a more diversified property portfolio). FRT was a long-term hold for me, so even though the shares were sold at a loss, with dividends included, total returns were solidly in the black. Even so, FRT was an underperformer for me and moving forward, when thinking about getting out of slow growing, low conviction picks with relatively poor total return outlooks, FRT was an easy position to cut. On 2/1/2024 I sold Royal Bank of Canada (RY) at $97.79, locking in 2.4% losses. Once again, this sale was about reducing redundancy since I am also long shares of The Toronto-Dominion Bank (TD). When comparing the two, TD was my top pick from the Canadian banking space, so cutting ties with RY was an easy way to simplify my life while sticking with my favorite stocks. Once again, the proceeds from this sale went into Realty Income to help bolster my yield while also increasing my exposure to one of my top high-yield picks. I should note that alongside of O, I also added to my RTX (RTX) and Northrop Grumman (NOC) positions with the proceeds of these high yielders + the Cummins sale from January. Once the lost income was covered by O’s higher yield, I used the rest of the cash to bolster my growth and maintain industrial exposure with RTX/NOC. On 2/2/2024 I sold Altria (MO) at $41.43, locking in -2.2% losses. Like FRT, MO was a company I had owned for years, so with dividends included, my total returns here were solid. MO has underperformed the market over the last 5 years or so in a major way though (even with that big dividend yield included) and moving forward, I wouldn’t be surprised to see that trend continue (even with the stock’s very low valuation in mind). Simply out, I’ve lost faith in the idea that we’ll see multiple expansion via mean reversion for the tobacco names anytime soon - if ever. When thinking about pivoting out of low growth, deep value names, both MO and British American Tobacco were easy cuts. It was difficult selling these names from an income oriented perspective, though. I hate making trades that damage my passive income stream and by selling Altria, I certainly did that. I wasn’t interested in chasing yield with the proceeds because my focus is on quality, above yield/value these days. With that in mind, my year-over-year income growth is very likely going to be negative during the months that MO pays a dividend, but that’s okay. I ended up going pretty heavily into Meta Platforms with the proceeds from the MO/BTI sale and over the long-term, I think the strong, double digit fundamental and dividend growth prospects from those shares will result is much higher returns that I would have received if I had held onto my tobacco stocks. On 2/2/2024 I sold British American Tobacco (BTI) at $30.13, locking in -19.5% losses. The same logic applies to this trade as the one above. When thinking about selling out of low conviction/low growth ideas and getting more concentrated throughout my portfolio, selling out of BTI made sense to me as I moved out of the tobacco industry. I know this is an area of the market that have generated massive wealth for investors for decades. However, I think the world is changing. I don’t necessarily believe that reduced risk products will save these companies (at least, in terms of returning to strong top/bottom-line growth). Yes, they continue to possess pricing power because of the addictive nature of the products, but cigarette volumes continue to glide lower and I don’t think that’s a sustainable trend in terms of dividend safety. I’ve been trimming away at my tobacco stakes for several years now and in February I decided to pull the final plug as I was looking to raise cash to buy into META after its dividend announcement. On 2/14/2024 I sold Cisco (CSCO) at $47.80, locking in 100.8% profits. During the pandemic, I gave companies a pass when it came to poor dividend growth. I get it…those were times of unprecedented uncertainty. But, now that we’re back to normal times, I’m back to normal expectations when it comes to dividend growth. When CSCO provided a ~2% dividend raise in 2023, I trimmed my position on the disappointing news. I told subscribers that if it happened again in 2024, I’d sell the rest of my shares. Well, CSCO disappointed again with its 2.6% raise and I cut ties with the company. CSCO’s ~3.3% yield was safe in my opinion, but at that yield level, I need to see 5-7% annual dividend growth. Cisco wasn’t living up to those expectations so I sold out and bought a basket of CME Group (CME), Amazon (AMZN), Starbucks (SBUX), and PepsiCo (PEP). I’ve discussed my bullish outlooks for each of these companies recently:  Why I Just Bought More Starbucks For The First Time In Years PepsiCo: A Wonderful Company Trading At A Fair Price Amazon: The Best Of The Big Tech Stocks CME Group Is One Of My Favorite High-Yielding Stocks Today  On 2/22/2024 I sold Veralto (VLTO) at $86.07, locking in 2% profits. My recent Veralto sale was driven by a similar mindset to my Carrier one. These were both spin-off companies and relatively low conviction picks moving forward. They were both small positions that I didn’t have plans to add to. And therefore, I decided to save myself time and energy by removing them from my portfolio (and therefore, removing the need to perform regular due diligence on the shares). My VTLO stake made up less than 0.20% of my portfolio so the sale here was not significant. I used the proceeds to bolster my AMZN position (one of my highest conviction picks in today’s market). On 2/22/2024 I sold Merck (MRK) at 129.33, locking in 75.5% profits. Merck is a wonderful company, but like I said before, the bio-pharma space is an area of the market that I’m looking to pivot out of. And this MRK trade is an example of the ideal playbook moving forward. During their year-to-date rally, MRK shares ran up above my fair value estimate for them, allowing me to lock in large profits on shares that were no longer trading with an attractive margin of safety. With the Merck proceeds I bought shares of Blue Owl Capital Corp. (OBDC), AvalonBay Communities (AVB), Amazon, and Meta. This was a bit of a barbell trade, with OBDC/AVB covering the income that I lost from the MRK trade and META/AMZN providing exposure to strong, secular growth trends. Right now, I believe that other significant bio-pharma positions in my portfolio such as Amgen (AMGN) and Johnson & Johnson (JNJ) are undervalued. I’m already sitting on large gains on AMGN/JNJ; however, I don’t want to sell out of blue chips when they’re undervalued. As I’ve said many times before, selling low is a great way to underperform. If these names were to rally up to the point that I no longer believed they were cheap, I would consider selling as well. But, in the meantime, I’ll continue to hold onto them and collect their respectable dividend yields while I wait for the market’s overall sentiment surrounding the healthcare sector to improve. On 2/23/2024 I sold L3Harris Technologies (LHX) at $214.7, locking in 11.7% profits. Like this CSCO trade, this one was due to two consecutive years of disappointing dividend growth. Last year, when LHX’s raise was only 1.8% I put the stock in the penalty box, meaning that I would not add to it until the dividend growth got right…and if it disappointed again the following year, shares would be sold (wonderful companies always get that 1-year grace period while I wait for better dividend growth rates). Well, LHX disappointed again this year when they announced a 1.8% raise in late February. LHX yields ~2.2% and at that level, I’m looking for 6-8% annual increases. They didn’t meet expectations and since I was sitting on profits, it was an easy decision to move on. I used the LHX proceeds to buy shares of Booking Holdings (BKNG), which is now one of my highest conviction dividend growth picks (as recently discussed in this report). On 2/26/2024 I trimmed approximately 20% of my GOOGL position at $137.73, locking in 170.5% profits. After Alphabet’s most recent trip up with its generative AI platform, I bought into some of the rising concerns that they’re falling behind in the race. Furthermore, I’ve been reading reports about the threats that their search platform is facing (which is their cash cow) - including the risk that it might have to be disrupted by their own LLM for them to compete long-term - which were concerning Being that I was so heavily overweight Alphabet, I decided to trim the position, taking significant profits on shares held in an IRA (so no negative tax consequences). I sold roughly 20% of my stake, reducing my weighting from 4.3% to 3.6% (at the time). GOOGL remains a top-10 holding for me because I still believe that shares are attractively valued. Furthermore, I truly believe that if GOOGL adopts a more disciplined plan with regard to capex and shareholder returns like META has recently, their shares could pop 10-20% immediately. But, that’s a big “if” with regard to management’s plans for the company. The market rewarded META in a major way for its Year of Efficiency and I suspect that GOOGL could receive similar treatment. But, I think there’s a good argument to be made that META has higher quality management than GOOGL right now, so I’m not sure if they can pull that sort of transformation in the short-term (META reduced its head count by over 20% in a year). Regardless, I didn’t want to be greedy sitting on triple digit profits on an overweight position and after the stock’s significant ttm and year-to-date rally, I took some risk off of the table. I used the GOOGL proceeds to buy more Booking Holdings and Meta Platforms, maintaining growth prospects while also bolstering my passive income stream. On 2/29/2024 I sold Blackstone (BX) at $127.29, locking in 30.5% profits. On 2/29/2024 I sold Brookfield Infrastructure Corp. (BIPC) a $33.90, locking in 9.1% profits. On 2/29/2024 I sold Brookfield Renewable Corp. (BEPC) at $23.84, locking in 28.8% losses. And, on 2/29/2024 I sold Brookfield Asset Management (BAM) at $40.36, locking in 70.5% profits. I’ll talk about these 4 final sales together since they were all inspired by a similar mindset and made as a group, with profits in mind. I decided to move away from the Brookfield funds because of their complexity. These companies are relatively time consuming and difficult to analyze. My conviction behind my fair value estimates on these companies were relatively low because of their sophisticated financials and the fact that they don’t always trade on traditional earnings metrics. BAM, BEPC, and BIPC all continued to meet my income oriented standards (with yield + dividend growth in mind). But, I decided to part ways with all 3 stocks in my pursuit for a more concentrated/simple portfolio. Because of the large losses that I was looking at on the BEPC shares, I decided to include my Blackstone position in this trade basket to ensure that overall, I was locking in gains. BX has always been a relatively low priority hold for me because of its variable dividend (I prefer more predictable passive income payers). Once again, I think BX is a fine company. But, it has been one of my more volatile companies and I was happy to lock in gains here after a strong start to 2024. Overall, my profits on this basket were 3.45%. Again, I took a barbell approach with the proceeds of this trade, adding to my Meta Platforms, and Salesforce positions when looking for growth/dividend growth and then my Main Street Capital (MAIN) and Ares Capital Corp. (ARCC) to help replace lost income. Lastly, On 3/12/2024 I sold Illinois Tool Works (ITW) at $261.20, locking in 98.8% profits. ITW is a wonderful company, without a doubt. It’s a dividend aristocrat that continues to post solid, mid-to-high single digit annual dividend growth. However, I think that shares are potentially grossly overvalued right now (ITW is trading for ~26x forward with 4-6% earnings growth prospects over the next several years). This has reduced my forward-looking total return estimate to basically 0% between now and 2026 (I expect to see ITW’s earnings multiple contract as it reverts to its historical mean). With those poor return prospects in mind, when looking to raise capital to buy more Booking Holdings last week, ITW stood out as a leading sale candidate. Furthermore, the fact that I held shares in a retirement account, meaning no negative tax implications associated with the big gains, was a plus. I’d be happy to buy back into ITW in the future; however, I’d be looking to pay 18-20x earnings. In the meantime, I used the proceeds of this trade to buy more shares Booking Holdings at $3,505.37 and Automatic Data Processing (ADP) at $245.21 last week. Nicholas Ward’s Dividend Growth Portfolio           Ticker Name Share Price Cost Basis/Share Overall Gain/Loss % Portfolio Weighting   (AAPL) Apple Inc. $172.62 $22.79 657.44% 7.50%   (NVDA) NVIDIA Corp $878.37 $61.61 1325.69% 5.44%   (AVGO) Broadcom Inc. $1,235.50 $234.30 427.32% 4.84%   (MSFT) Microsoft Corp $416.42 $80.69 416.07% 4.82%   (AMZN) Amazon.com, Inc. $174.42 $113.22 54.05% 3.51%   (GOOGL) Alphabet Inc. Class A $141.18 $45.01 213.66% 3.48%   (V) Visa Inc. $283.04 $124.24 127.82% 3.04%   (QCOM) Qualcomm Inc. $167.20 $76.44 118.73% 2.09%   (O) Realty Income Corp $52.19 $59.43 -12.18% 2.07%   (BLK) BlackRock, Inc. $802.52 $462.83 73.39% 2.05%   (META) Meta Platforms, Inc. $484.10 $479.44 0.97% 1.98%   (RTX) RTX Corp $92.93 $84.65 9.78% 1.69%   (APD) Air Products and Chemicals, Inc. $244.63 $260.12 -5.95% 1.58%   (BKNG) Booking Holdings Inc. $3,413.98 $3,503.75 -2.56% 1.55%   (CNI) Canadian National Railway Co $128.62 $112.23 14.60% 1.44%   (SBUX) Starbucks Corp $90.12 $51.21 75.98% 1.43%   (CRM) Salesforce, Inc. $294.33 $294.32 0.00% 1.39%   (SPGI) S&P Global Inc. $422.81 $358.53 17.93% 1.31%   (USFR) WisdomTree Floating Rate Treasury Fund $50.41 $50.40 0.02% 1.28%   (JNJ) Johnson & Johnson $158.18 $114.02 38.73% 1.27%   (PEP) PepsiCo, Inc. $164.66 $115.51 42.55% 1.26%   (PH) Parker-Hannifin Corp $535.42 $255.96 109.18% 1.17%   (MAIN) Main Street Capital Corp $46.20 $41.19 12.16% 1.12%   (ABBV) AbbVie Inc. $177.88 $79.08 124.94% 1.09%   (MA) Mastercard Inc. $475.83 $119.79 297.22% 1.08%   (HON) Honeywell International Inc. $197.69 $142.19 39.03% 1.06%   (TMO) Thermo Fisher Scientific Inc. $584.15 $529.96 10.23% 1.01%   (OBDC) Blue Owl Capital Corp $15.22 $13.95 9.10% 1.01%   (ACN) Accenture plc $374.60 $270.99 38.23% 0.99%   (BR) Broadridge Financial Solutions, Inc. $200.20 $148.90 34.45% 0.98%   (NKE) Nike, Inc. $99.64 $62.68 58.97% 0.98%   (LMT) Lockheed Martin Corp $435.82 $354.14 23.06% 0.95%   (UNH) UnitedHealth Group Inc $490.82 $484.60 1.28% 0.94%   (KO) Coca-Cola Co $59.88 $42.38 41.29% 0.88%   (TXN) Texas Instruments Inc $172.52 $110.11 56.68% 0.83%   (DE) Deere & Co $383.39 $347.85 10.22% 0.80%   (CME) CME Group Inc. $217.50 $196.49 10.69% 0.79%   (REXR) Rexford Industrial Realty, Inc. $51.41 $52.86 -2.74% 0.79%   (AVB) AvalonBay Communities, Inc. $183.82 $168.21 9.28% 0.79%   (ECL) Ecolab Inc. $226.70 $150.04 51.09% 0.78%   (ENB) Enbridge Inc. $35.52 $39.33 -9.69% 0.78%   (AMGN) Amgen Inc. $268.87 $136.07 97.60% 0.76%   (DHR) $Danaher Corp(DHR-W)$ $249.40 $211.57 17.88% 0.75%   (ARCC) Ares Capital Corporation $20.19 $19.08 5.82% 0.71%   (CP) Canadian Pacific Kansas City Ltd $89.68 $71.64 25.18% 0.70%   (ASML) ASML Holding N.V. $940.21 $649.43 44.77% 0.69%   (LIN) Linde plc $468.23 $355.48 31.72% 0.64%   (BIL) SPDR Bloomberg 1-3 Month T-Bill ETF $91.63 $91.63 - 0.63%   (NOC) Northrop Grumman Corp $461.75 $385.78 19.69% 0.63%   (HSY) Hershey Co $193.54 $217.10 -10.85% 0.62%   (ICE) Intercontinental Exchange, Inc. $134.64 $97.23 38.48% 0.61%   (ELV) Elevance Health, Inc. $513.08 $474.58 8.11% 0.56%   (NNN) NNN REIT, Inc. $41.46 $38.38 8.03% 0.54%   (TD) Toronto-Dominion Bank $60.06 $65.06 -7.69% 0.51%   (ADP) Automatic Data Processing, Inc. $242.09 $238.79 1.38% 0.51%   (WM) Waste Management, Inc. $210.53 $159.54 31.96% 0.50%   (MCD) McDonald's Corp $279.14 $258.34 8.05% 0.46%   (BAH) Booz Allen Hamilton Holding Corporation $144.79 $75.49 91.80% 0.44%   (SHW) Sherwin-Williams Co $334.66 $219.30 52.60% 0.43%   (ESS) Essex Property Trust, Inc. $239.07 $214.97 11.21% 0.41%   (ZTS) Zoetis Inc. $172.57 176.61 -2.29% 0.39%   (PLD) Prologis, Inc. $129.02 $118.30 9.06% 0.38%   (MCO) Moody's Corp $384.16 $326.70 17.59% 0.35%   (MSCI) MSCI Inc. $544.74 $469.41 16.05% 0.35%   (RSG) Republic Services, Inc. $186.31 $123.71 50.60% 0.32%   (A) Agilent Technologies, Inc. $147.48 $116.28 26.83% 0.28%   (CSL) Carlisle Companies Inc. $371.48 $228.31 62.71% 0.27%   (CPT) Camden Property Trust $98.49 $114.08 -13.67% 0.27%   (ARE) Alexandria Real Estate Equities, Inc. $123.75 $130.96 -5.51% 0.26%   (PLTR) Palantir Technologies Inc. $23.49 $10.79 117.70% 0.12%   Cash         12.07%   Click to enlarge Conclusion Since late last year, I’ve trimmed my position count down from roughly 90 companies to 70 or so. And looking at my portfolio today, there aren’t many more that I’m very interested in selling. To me, just about every company above is contending for best-in-class status and those are the types of companies that I want to own over the long-term. Furthermore, I’ve largely eliminated my exposure towards certain industries that I was looking to get out of, so those trades are nearly over with (outside of a few bio-pharma names that I wouldn't mind selling at the right prices). I would also consider selling/trimming several of my REITs in the event that the Fed cuts rates and that sector catches a bid. As I said last November, I consider the new home to be a part of the household’s investment portfolio overall and since it will increase our exposure to real estate, I’d be willing to continue to reduce REIT exposure to balance things out. However, since REITs continue to be out of favor I don’t mind holding onto low-weight positions like CPT or ARE until they experience a rebound. I’m also consistently asking myself, at what point do I think about taking some Nvidia profits off the table? I’m not in a hurry to do so because that company remains one of my favorite growth stocks; however, NVDA’s recent rally has pushed shares up above my fair value estimate and as shares approach $1,000.00 I find myself considering profit-taking more and more. Overall, I feel pretty good about my sector allocations right now (I remain overweight technology, which continues to be my favorite area of the market as a long-term investor). Now, the biggest thing that I’m looking forward to is potentially more dividend initiations from big-tech players (Alphabet, I’m looking at you). If a company like Alphabet or Amazon started paying a dividend, it would be a boon to my income stream. I’m loving the trend that I’m seeing in the technology sector with regard to shareholder returns and I think there’s a lot to look forward to throughout the rest of the year.  Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. 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