New year and a new strategy

New year and a new me.

Maybe a bit of a reach, but I have a new stock strategy at least. The strategy is an outcome of a new broker and their beneficial pricing regarding stock purchases in smaller amounts.

Until now I have used Nordnet as my only broker. They have no fees besides a trading fee of 0,1% This is quite good, but there is a minimum trading fee of 3,8€ and over 10 € for US stocks. There are many great dividend stocks in the US, so this price is a bit steep for my taste.

My new broker is Saxobank. They have the same trading fee of 0,1% but there is no minimum trading fee – you just have to buy for more than 135€. This is perfect for me. I don’t buy in big bulks, but would like to buy small portions, when I have the money for it in my normal budget. Often that is around 250€ per month.

Diversification is key

This inspired me to write down my new strategy:

I want to accumulate a great variety of dividend paying stocks. The diversification follows this distribution –

  • 22% personal stock picks
  • 33% index funds
  • 10% monthly paying dividend stocks
  • 30% dividend kings and aristocrats
  • 5% non-dividend stocks with rocket potential

Personal stock picks
I read a lot about the stock market and have a constant watchlist of stocks. When these stocks hit a decent price, I want to be able to buy them. This category is to keep it fun for me. The stocks has to be paying dividend with a relatively high safety rate.

Index funds
There is a danish company called Sparinvest, which offers a variety of index funds. They are not the cheapest in the market but the danish tax system is to hard on foreign ETF – therefor this category.

Monthly paying dividend stocks
One of the great things about dividends is compound interest. With a selection of these monthly paying dividend the money from these will help me in the accumulating phase paying me money every month to buy stocks.

Dividend kings and aristocrats
If I was the worlds best investor the strategy would just be 100% personal stock picks. Unfortunately I’m not. Dividend kings and aristocrats are often quality stocks with great dividend safety. I wan’t to have a great deal of my portfolio from these kings and aristocrats.

Rocket potential
Just like the personal picks category this category is here to please my interest in stocks. I wan’t to be able to buy small portions in small stocks, that have the potential to grow in to the skies. Dividend is not important here, only patience is.

The change

The new strategy alters from the previous in a few ways. In the new strategy I have room to play with non-paying dividend stocks. I also have the chance to have a great deal of diversification at an early stage. My estimate is, that I am going to buy 4-5 times more stocks due to the non-existing minimum trading fee.

What do you think of my strategy??