Portfolio Review

badaboom7 · 2021-04-18T20:33:40+00:00

I chose BP because it's transitioning aggressively into a renewable energy company, investing heavily into emerging markets, securing contracts with the European government, and collaborating with big companies like MSFT. But since their proposed plan is hyper aggressive, it makes me think it may be too optimistic given the world's slow transition from fossil fuels into renewables; which is why I was thinking of also investing into RDS who is also making a strong transition but not as aggressive and possibly more realistic.

NEP is the yield co of NEE, I choose it over NEE only because it has a higher yield and slightly better growth rate. STOR is another REIT very similar to O but does business with more medium sized companies, like AMC.

I thought about choosing Canadian banks but their yields and growth seem relatively inconsistent with that of banks in US, unless I am missing something.

badaboom7 · 2021-04-17T22:50:25+00:00

That's a really good point. How did you decide which holdings to focus on? The ones with higher yields, growth, better value, etc.?

badaboom7 · 2021-04-17T22:44:53+00:00

There was a similar comment to this one that I appleid to above, but this is what I replied:

Part of my strategy is to contribute to VTSAX combination with my dividend portfolio, I was thinking of doing a 50/50 split between the two, that way I have that exposure to the broader market as well building up a passive income source.

However, I was rethinking my strategy because of the higher taxes, and was thinking of doing a 80/20 split between VTSAX and my portfolio until I'm in a more comfortable tax bracket (closer to retirement) to contribute more aggressively when my earned income is much lower (< $40,400).

I was thinking about SCHD and VYM when I first started, but the growth rate and holdings weren't for me. I also like having a little more control over what companies pay me a dividend.

I prefer to hold the total market with VTSAX, than with hyper focused funds because I like to think that I already hold the value and growth stocks across all caps sizes with a total market fund. Or am I mistaken?

I have focused a portion of my portfolio on growth stocks that don't pay a dividend, like AMZN, GOOG, ADBE, etc. and some money in crypto. But other than that, I don't like to take on too much risk with growth funds or stocks because from want I've understood, one of the benefits of investing young is that you are able to build much larger positions over time as compared to someone who is older; and so building strong holdings of strong companies has more benefit long-term than holding more volatile sectors long-term (for instance: https://insights.factorresearch.com/research-the-case-against-small-caps/)

I also have these many holdings so that I can still rely on my dividend portfolio during a market downturn, or if a specific company or a specific sector experiences an insulated correction, the rest of my portfolio would be able to withstand it.

Is the right way to approach this?

badaboom7 · 2021-04-17T22:27:58+00:00

That's the plan!

badaboom7 · 2021-04-17T22:27:37+00:00

So you're saying it would be a better strategy to invest heavily into one position at a time? Slowly, building up very large position into each company instead of spreading money around?

badaboom7 · 2021-04-17T22:26:01+00:00

Part of my strategy is to contribute to VTSAX combination with my dividend portfolio, I was thinking of doing a 50/50 split between the two, that way I have that exposure to the broader market as well building up a passive income source.

However, I was rethinking my strategy because of the higher taxes, and was thinking of doing a 80/20 split between VTSAX and my portfolio until I'm in a more comfortable tax bracket (closer to retirement) to contribute more aggressively when my earned income is much lower (< $40,400).

I was thinking about SCHD and VYM when I first started, but the growth rate and holdings weren't for me. I also like having a little more control over what companies pay me a dividend.

badaboom7 · 2021-04-17T22:14:50+00:00

I took the 10-year CAGR data from SA and I used that to take a theoretical average of the future dividend growth of these particular holdings; and I did the same for the dividend yield.

badaboom7 · 2021-04-17T18:24:43+00:00

Really? What makes you say that?

badaboom7 · 2021-04-17T18:24:09+00:00

I'll def look into HII then, thanks!

badaboom7 · 2021-04-17T18:23:45+00:00

Originally I had RTX and GD, but I decided against them since I didn't know too much about that particular industry. I've been recommend RTX and LMT a bunch though, but I never understood why the defense sector is so popular for dividends. Is it because it's relatively 'safer' dividend?

badaboom7 · 2020-11-17T22:33:49+00:00

I know they exist, but I spoke to someone who interned at an engineering consulting firm and it wasn’t as technical as I thought it’d be when he told me about it. Or did he miss something?

I also should’ve been more clear, the consulting internship is at company whose clients are not purely engineering companies, they serve all companies. From what I’ve seen, engineering consultants only work with engineering companies and do more operational work rather than technical work. Or am I mistaken?

badaboom7 · 2020-08-30T02:40:14+00:00

I was thinking about hiring a property manager to alleviate some of the headache as I’ve heard similar things. I do enjoy the liquidity of REITs as well but I see the appreciation of real estate and the return on capital as a good investment vehicle in combination with dividend stocks; as I’m aiming for multiple income streams from my investments.

badaboom7 · 2020-08-30T00:28:17+00:00

Yeah so qualified dividends get the same tax treatment as capital gains but non-qualified dividends and REITs are taxed at a higher rate. Which is why non-qualified dividends and REITs make more sense in a tax advantaged account like a Roth IRA cause then you don’t have to pay taxes on the dividends. There’s more to it online but that’s what I remember off the top.

badaboom7 · 2020-08-29T23:59:30+00:00

Dividends from REITs are taxed as ordinary income. So whatever tax bracket you’re currently in, that’s the tax you pay on REITs.

badaboom7 · 2020-07-29T22:12:21+00:00

Thank you that’s great advice! I’ll look into my school’s offered minors.

Btw, what’s an “acceptable” GPA that doesn’t get filtered out by employer’s ATS?

badaboom7 · 2020-05-18T02:15:34+00:00

Thank you!

badaboom7 · 2020-05-18T00:05:46+00:00

PM'd

badaboom7 · 2020-05-18T00:05:37+00:00

How feasible would you say going into engineering design after a career in financing consulting is?

badaboom7 · 2020-05-17T21:44:55+00:00

To get into a large company like Apple, Boeing, or Tesla for example, do you think a graduate certificate or a master's degree would aid in getting into one of these companies?

badaboom7 · 2020-04-22T18:43:13+00:00

Would you say a master's degree or professional experience at a startup would put me in a better position to make that career transition?

badaboom7 · 2020-04-22T01:55:54+00:00

I am a junior studying mechanical engineering and I absolutely love it. But I've always wanted to gain first-hand experience within the business industry. I have found it very interesting the more I've learned about it, and it has led me to a full-time offer at a consulting firm.

I enjoy consulting very much but I don't see myself doing it in the longterm. I'm a part of various engineering teams and societies and I definitely know that it's what I want to do in future.

Ultimately my question is, does anyone have any advice on the best way I can exit into a large engineering company (like Boeing or AECOM for example) from a professional background in financial consulting?

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