Portfolio Goals: 2021

Is mid-February too late to come up with some goals for the year? I hope not!

I’ve never set solid investing goals, but they seem sort of fun. Since I had my financial “awakening” a few years ago, I’ve tried to max out my tax shelters whenever possible and dump the rest into taxable accounts. I’ve been thrilled with the results of passive investing over the last five years, but adding some hurdles should make things a bit more interesting.

1. Max tax shelters

Maxing my tax shelters is always my highest priority goal. The way I see it is that I’ll never have a chance to go back and contribute for past years, so I need to fill those in first.

  1. Contribute $6,000 to my Roth IRA
  2. Contribute $19,500 to my 401k
  3. Contribute $7,200 to my HSA (family limit)

I have been doing this fairly regularly and see this as my bottom rung of my goals, but still the most important. The HSA is new to me this year after not having access to one in 2020 and most of 2019.

2. Achieve $10/day in taxable dividend income

My calculations tell me I am currently at $260/month in taxable dividend income. Can I increase that to about $305 by the end of 2021? My portfolio yield is currently at about 1.72%, which means I would need to contribute around $2,616/month to meet this goal.

This might be a stretch, but with reinvestments and raises, I should need much less than $2,616 per month in new contributions.

3. Continue allocating at least 50% of new contributions to VTI

This has been a goal since sometime in 2019, and I have been perfect in this department. At first, I thought these contributions were boring. I have DRIP set up, so I never even got the satisfaction of spending VTI dividends on new purchases. I have to say, VTI has definitely not been boring. It has actually outperformed my individual picks by quite a bit, and I’m hoping to add a comparison to my monthly dividend income reports.

It’s really more a discipline goal. Let’s see if I can stay disciplined!

I think I need some stretch goals that I may not necessarily hit.

4. Contribute $2,500/month on average in new money

I may hit my earlier goal of $10/day in forward dividend income, and don’t want that to de-motivate my contributions. Regardless of whether I hit the $10 goal, I want to keep my contributions going. I may actually need this level of contributions if yield on my new purchases is below 1.7% (like quite a few of my favorite stocks right now).

5. Strengthen my base holdings

As I write this, I have 44 individual holdings. 8 of those holdings are over $3,000 in market value. I’d like to end 2021 with 17 holdings over $3,000 in market value. To put a number out there, I hope to spread $14,000 over 12 holdings in the middle of my portfolio, which are: BLK, RSG, MDT, TXN, PG, SBUX, AVY, TRV, HRL, NEE, AWR, and NDSN. The market could take a dive, so I’ll grade this goal on meeting the $14k number.

6. Water my growers

Somewhat oppositely of “strengthening my base,” I’d like to keep adding to my top 5 holdings, which are also some of my fastest growing. I tend to avoid adding to the best performers of my portfolio. It’s a combination of not thinking I need to since they are growing on their own, along with trying to keep my holdings more evenly weighted.

The truth is I don’t mind when a holding gets moderately heavy – that means it’s doing well! Even though my cost basis may be much lower than the current share price, I have to keep adding to these. I’m thinking of AAPL, MSFT, V, UNH, and LOW. This is something I have not done well with in recent years.

To put a number on it, I’d like to spread $5,000 in new contributions over my five best growers.

I’m looking forward to looking back on this list in a year. I have some work to do!

2 thoughts on “Portfolio Goals: 2021

    1. Thanks Lanny! Definitely adds a little fun. If it makes me actually save more, even better!

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