Now that we have dealt with the type of investments that can be used to form your dividend portfolio, it's time to look into matters relating to tracking and managing your portfolio. Here we go. The objectives of the second part of this lecture session are as follows. Tracking your portfolio. When it comes to tracking your portfolio, there are two important things that you should be concerned about. They are the dividend payment itself and the investments that gave you those dividends.

Dividend payment tracking why we track dividend payments is simply because we want our efforts to pay off and for rebalancing purposes. Now even though I can go into detail on how to use Excel to track your dividends and dividend investments, I wouldn't do so because it isn't practical. Most of the investors I have met will not be have the time to open up an Excel file every time they buy something from the market, let alone use it to track their investments. Taking this into account, I have thought of three ways to make tracking easier. The first way is to link your trading account to a separate bank account. Let me explain.

I have two bank accounts bank account one and account two from two different banks. The first bank account is to accommodate my active income as well as my monthly expenses. The other bank account is solely for my investments. Whatever savings I have accumulated for the month, I would transfer into that account. I would also use only bank account number two to link to my trading account to buy and sell shares. So whenever shares are sold, the gains will be transferred into this bank account, which will also include dividends.

Doing so bank account number two would consist of my savings plan. gains from investment plus the dividends accumulated over the years. Essentially lumping everything together for ease of reinvestment. By the way, my trading account helps me track the number of investments I have bought over the years. Any news relating to any of my investment, I would get an email alert on it. So I have accomplished both tracking and monitoring of my dividend portfolio catching two birds with one stone.

Now, some dividend investors might not like to lump everything together. They like to see their capital gains and dividend gains separate as such here is the second way which is to use dividend tracking apps like j stock j stock can be downloaded on Google Play or your app saw. The reason why I recommend this app is because it's extremely intuitive and easy to manage. No complicated formulas, no unnecessary taps Let's take a quick look at j stocks advertisement. I want you to notice the functions they offer to dividend investors. Don't get off.

So these are examples of how I use j stock. This is my watch list, the individual dividend tracking pages and my recent trading activities which are all tracked. The disadvantage though is that j stock only tracks dividend companies and reads but not so much of bonds or dividend funds. The third way, if you aren't the diligent kind of investor that needs an Excel model to track your dividends, then here comes my third suggestion, which is to take advantage of the tons of ready made Excel models online. If you are in the US, I would suggest checking out the dividend tracking model created by the team from dividend meter.com dividend meter has detailed step by step instruction for Google Sheet to track your dividend income progress. It's beginner friendly, I pretty much started this way and it grew to include all the features highlighted above.

If you are from Singapore, you can check out investment moat blogs, dividend tracker, all the links are in the attached I wouldn't go about explaining How to use it as I'm not the Creator, but I've used it and both of them are pretty comprehensive. So there you have it, three efficient ways to track your dividends other than merely tracking the dividend amounts. More importantly, we should track the companies or investments that are paying those dividends. dividend investors often monitor their stocks reads and business trust by monitoring the numbers, the quanta aspect, following revenue margins and cash flow on a magnified basis should signal to you to check on your investment. Let's also not forget about the qualitative side. What was the cause of such a big drop to the company enter new industry without much expertise making a wrong move that caused the revenue to drop?

Or did the management bought a new business at an expensive price? acquisition by growth alone is not sustainable. Can the company recover? From the cause behind the drop in revenue or net profit. So these are the type of questions to ask when conducting qualitative analysis. Reduce your holdings if the sustainability aspect of the investment is deteriorating.

For dividend funds in particular check if there is a change in management if there is evaluate the funds performance, but do note on a few things when it comes to performance evaluation. Don't get influenced by performance two years over a short period. Give the new fund manager or asset management company some time to prove his or her worth a couple of months or quarters performance will not paint a true picture of the funds performance or allow the fund manager to do justice to his role. In addition, a funds performance cannot be judged in isolation. If you really want to check how your fund is performing over a certain period of time. Compare its performance with others in its category each month.

Quarter and lastly detect for any change in investment style. Check for changes made to the portfolio during the monitoring phase. Has the funds become too aggressive or too conservative? Is the fund incurring a lot of unnecessary cost by aggressively buying and selling investments? These are things to consider other than performance alone. rebalancing.

Okay, now for the crucial part of managing your portfolio. So assuming you know how to track your dividend portfolio efficiently and consistently, what now? Well, the next important step is learning how to rebalance your portfolio whenever necessary. Why rebalancing. If you leave your portfolio alone, without doing anything to it, your portfolio asset allocations will naturally change over time. That's because some of your investments will do particularly well.

Well, while others will not. That was the whole point of diversifying your portfolio in the first place, those investments that have done well will naturally begin to take up more of your portfolio. Those that have not will take up less of your portfolio, and you don't have to do a thing for that to happen. But every so often, you need to rebalance your portfolio to restore its original balance its original intent. If your investment goal and risk tolerance hasn't changed your portfolio's allocation mix shouldn't either. portfolio rebalancing is something that should happen throughout your investment life.

Rebalancing is primarily about risk adjustment, making sure your portfolio isn't overly dependent on the success or failure of one investment, asset class or style and to align your investment holdings with your risk tolerance. How to do it In theory, there are two levels of rebalancing for investors, those whose portfolios consists of both funds and individual baskets of stocks. Level One rebalancing applies to individual stocks in the core holdings. Level two rebalancing that applies to the entire portfolio. Let's talk about level one rebalancing. First the individual stock holdings because in reality or practical terms, rebalancing individual stock holdings can be very costly, complicated and impractical for most investors.

The higher number of stocks that you form your core or site holdings, the higher the cost incurred from commissions bid ask spreads and taxes if rebalancing is applied at this level. So instead of conducting rebalancing to a certain threshold for individual dividend stocks, I would encourage you to focus on tracking and adjusting your dividend stock holdings. What I mean by this is, for example, every year and I would really look at all my dividend stock holdings individually, especially those under the Digi stock holdings and keep track of the dividends paid to me whether each of them have managed to sustain or grow their dividends per share as intended. Those dividend stocks that didn't manage to sustain or grow dividends, I would really look into their cash flows, earnings per share and their debt levels. If their fundamentals have weakened significantly, I would group them then dispose them the next market trading day and that is all I do for level one rebalancing.

Contrary to the wisdom of rebalancing, I sell them sell IDs stocks, unless there is good reason to because after all, my core holdings should consist of high caliber dividend sustainable stocks. Now for level two e balancing, which deals with your entire portfolio, refer to the Excel file attached in this section of the course, download it and let's practice using it together. Once you open the Excel file, the first thing to do is read the instructions and try to understand what each cell is meant to do. Only key in the figures for the yellow cells. Most of the gray cells have formulas embedded in them. Okay, let's start.

The first cell to note is the amount to invest cell. This cell is the total amount of savings plus dividends plus whatever cash you have set aside to be reinvested into your dividend portfolio. We do not touch this cell first, leave it at zero dollars. All right, now look to your left For the allocation percentage cell, these cells are also known as asset allocation thresholds. How you allocate the percentage to each thresholds depends on your risk tolerance. As a guideline, if you are moderately risk at first higher percentage should go towards bonds and reads fun.

If you are willing to take on more risk, you should allocate a higher percentage toward dividend stocks followed by individual reads and so forth. Here in this hypothetical portfolio, assume I started out with $9,000 out of this $9,000 40% will be allocated to dividend stocks and the rest will be allocated equally among bond funds reeds and other which is 20% each. other's here roughly refer to other investment that give out dividends, it can be mastered Least partnerships it can be private equity etc. The important point is that the allocation must reflect your risk appetite. Now, once you are done with the percent allocation for a start, the current value should reflect the exact amount of your sub total current value. What I mean by this is if you look here, subtotal is $9,000 USD.

So since 40% is allocated to dividend stocks, the current value is 0.4. Multiply 9000 and you get $3,600 allocated. The same calculation applies to the rest of dividend assets. Once you are done, save the file. Okay, let's fast forward to the next month or next quarter or year. Whatever period you choose to rebalance your portfolio.

Let's agree to appear you'd have one month after one month, assuming you manage to save a total of $1,000 and you can use this $1,000. to reinvest into your portfolio, type in the $1,000 into the amount to invest sell. next update the current value sells all of them. Remember current value equals to current price multiply by number of units or shares owned, so the value is very likely cannot be the same as last month. In our hypothetical portfolio, let's say the current value of your dividend stocks increased by say $500 $3,600 plus $500 equals $4,100. Your bond funds decreased by $500 1800 minus 500 equals $1,300.

When you update these current value cells, you'll start to see changes in the current percent cells and the adjustment cells. So what does this mean over Here, it means that your allocation for dividend stocks should now be 45.6% 5.6% higher than your set allocation percent over here, which is 40%. Likewise, for your bonds, it's now 14.4% versus 20%, a 5.6% lower than your optimal allocation. So how can you rebalance it back to your optimal allocations? How about the cash from the $1,000 savings? Where should the cash be allocated?

The answer is in the adjustment cells as you can see over here it's a just selling off $100 worth of dividend stocks, adding $700 into bonds and equally redistributing $200 each to retail and others under the rebalance amount. The orange cells over here, you have to manually add the current value to the adjustment cells for each row. For example, current value for dividend stocks is $4,100. Add negative $100 which gives you $4,000 under the rebalance amount, do it for each row. This is for record keeping. Okay, so now, assuming some time has passed and you decided to rebalance your portfolio again, highlight all the orange cells under the rebalanced amount and paste it under current value.

Change the cells to yellow and delete all the numbers under the orange cells to avoid confusion. Doing so will reset the model. Once the resetting is done, proceed again with the amount to invest the total amount of money you have accumulated over the period for reinvestment. Let's assume this time round it's $5,000. My Portfolio grand total measures up to 9000 as my initial capital $1,000 from last period $5,000 per this period and in total $15,000 after which update the current value again, current price multiply by the number of units or shares you own. This time around dividend stocks is say worth $4,500 bond funds $2,100 reads dropped to $1,500 and others dropped to $1,500.

As you update the current value, the adjustment cells will change and the process repeats again. With all said and done, this is how a simple rebalancing model works. It's not perfect I know, but it's darn right simple and useful when it comes to portfolio rebalancing without overcomplicating things. Feel free to add more rows if you have more than four types of dividend investment assets. And if you found other ways to improve the success rebalancing model, do send it to me and I will share it with other students in this course we can all learn from each other. In summary, these are the things we have gone through