Happy Birthday DDI portfolio!
The Daily Dividend Investor portfolio celebrated it’s first birthday a few days ago on June 1st, 2011 and boy did it have something to celebrate! The total return for the portfolio year over year, was a very respectable showed an unrealized capital gain of 19.6%.
When I started the portfolio back on June 1, 2010 it was valued at $108,137.75. One short year later, on May 31, 2011 the DDI portfolio had risen to $129,381.65 for a total gain of $21,243.90. I am very happy with this performance (who wouldn’t be?) and I’m encouraged that the daily income generated continues to grow. But there’s always a little more to the story….
Performance compared to what?
Although I’m not a mutual fund or hedge fund “manager” I am managing my own portfolio and important to realize that all performance is relative. When you invest in a mutual fund they will often compare their performance to one of the stock market indexes such as the Dow 30 or the S&P 500. So I decided to take a look and see how well I did compared to those two indexes.
Like most things in life – there’s good and there’s bad. So looking back for the June 2010 to May 2011 time period both the Dow 30 and the S&P 500 both returned 25.4%. So had I just put my money in either of those indexes my overall return would have been about 6% better for the year – ouch! But this portfolio isn’t called the “Capital Appreciation Index Fund” and it’s primary goal isn’t capital appreciation – it’s income growth.
It’s about the cash flow
When looking at the income potential, that is where the DDI portfolio continues to shine returning just over 5% in cash paid out multiple times monthly – compare that with the DOW 30 yield of 2.8% and the S&P 500 with a paltry yield of 1.79%.
Looking back over the last year, the profolio performed better than I expected and will continue to generate daily income that can be reinvested to continually grow the cash-flow performance of the fund.
I look forward to looking back a year from now and seeing how the DDI portfolio does in year #2. Happy Birthday DDI portfolio – you earned it!