2022 Dividend Investment Recap and 2023 Dividend Investment Plan

Market Summary

Each year I create a dividend investment plan to focus my attention on the investments I want to make for the year. 2022 has turned out to be one for the record books, both for the overall market and for my investment portfolio.  As of today, the indices are down significantly for the year, with the Dow down 8.13%, S&P 500 down 18.58%, and the NASDAQ down 31.49%.  Additionally, bond funds are down, with Vanguard Total Bond Market Index Fund (BND) down 13.98% and the iShares Core U.S. Aggregate Bond ETF (AGG) down 13.84%.  On a capital appreciation basis, there was little hiding from the losses.  

Luckily as dividend investors, capital appreciation is not our primary focus.  Our focus is our growing stream of passive income, with capital appreciation that follows over time.  My YTD returns are down approximately 5% for my dividend accounts but my dividend income is up substantially, coming from added capital, reinvesting all dividends, and dividend increases that happened this year.

Each year as part of my Investor Policy Statement, I set a target amount of new capital that I plan on deploying throughout the year.  This year I was able to hit and exceed my target, and ended the year at 120% of my goal!

2022 Dividend Investment Recap

Below is a breakdown of which stocks and funds the money was allocated to in 2022.

Symbol	% allocated
AQN	1.67%
BAM	1.67%
BDJ	17.10%
BST	8.39%
DIVO	15.85%
JEPI	5.04%
M1 Acct	7.37%
MFC	2.54%
NEP	0.85%
NUSI	1.96%
O	1.00%
Options Acct	12.50%
SCHD	9.93%
UTG	7.40%
VYMI	6.73%

The M1 Account is a passive account that I allocate a set amount each week and it automatically invests in a bucket of dividend growth investments and Real Estate Investment Trusts (REITs).

The Options account I use to write covered calls and cash secured puts on holdings strictly for the options premiums.  These are not long term holds.

My biggest contribution was to the BlackRock Enhanced Equity Dividend Trust (BDJ), which I discussed here.  It is a closed end fund that focuses on dividend payers and has a covered call program too.  The next highest contribution was to the Amplify CWP Enhanced Dividend Income ETF (DIVO), which I detailed here.

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2023 Dividend Investment Plan

For 2023 I am focusing on building up my allocation to ETFs and CEFs instead of individual companies.  My timeline for using the dividends is around 5-10 years so I am focused on higher yields.  As shown below the current plan provides a weighted dividend yield of 6.31% and comes with a historical average of 6.57% 5-year dividend CAGR.

Total Investment	100.00%
M1 Acct	5.00%
Options	5.00%
Special opportunities	3.33%
CEF/ETF Buys	86.67%
	Fund	Allocation % of new money	Current Yield	Weighted Yield	Dividend growth (5 year)	Weighted Dividend Growth
	JEPI	10.00%	10.62%	1.06%	0.00%	0.00%
	DIVO	20.00%	4.64%	0.93%	0.00%	0.00%
	UTG	10.00%	8.05%	0.81%	3.50%	0.35%
	BST	5.00%	10.03%	0.50%	19.14%	0.96%
	BDJ	15.00%	9.80%	1.47%	3.19%	0.48%
	SCHD	25.00%	3.14%	0.79%	13.74%	3.44%
	VYMI	15.00%	5.08%	0.76%	9.02%	1.35%
			Average Yield	6.31%	Average Dividend Growth	6.57%

The special opportunities allocation is earmarked for discounted individual stock opportunities as they arise.  As I have said before, it is a market of stocks, not a stock market.  Sometimes the market prices an individual company too low and I will use these funds to take advantage of those discrepancies.   In addition to the Options account, I will be selling covered calls on my existing holdings to increase the cash flow that comes into the account and will use those premiums to buy more dividend stocks.  I talked about how to do this here.

I look forward to 2023 and all the opportunities that will come.  Dividend growth investing is a powerful approach to passive income and one day I will be able to pay all my bills with it.