The Dividend Harvesting portfolio's 4-week losing streak was snapped in week 72 and was extended to its 5th consecutive week in the red. Some progress was made as the Dividend Harvesting portfolio went from being down -$197.60 (-2.78%) in week 71 to closing the week down -$170.92 (-2.37%). I have now allocated $7,200 ($100 weekly) to this portfolio; there are 77 positions, of which 76 pay a dividend or distribution, and the forward annual yield is 7.24%, as my projected annual income is $508.58. It's important to emphasize that market dynamics can take its toll on any portfolio in a downtrend, even one that's diversified and generating an above-average yield. This investment strategy isn't glamorous, and it won't appeal to everyone. I feel it's important to emphasize the negative weeks, so a false sense of reality doesn't set in. The Dividend Harvesting portfolio's weekly positive streak continues to diminish as it now has a 90.28% (65/72) record of finishing each week in the black.

Having incurred my 5th consecutive week in the red, I am not unhappy with the results of this portfolio. Nobody can accurately predict tops and bottoms in the market, and only time will tell if another leg down is yet to occur, if the market is bouncing along the bottom, or if we're starting to form a sustainable rally. We're not going to know until well after it occurs. The previous year has been a difficult investing environment. I believe the combination of vast diversification while reinvesting every dividend/distribution and adding capital on a weekly basis affording the ability to dollar cost average has played a large factor in the Dividend Harvesting portfolio only declining -2.37%. In week 72, I dollar cost averaged into 7 positions as I saw many opportunities to add capital to current positions. I look at the market's downturn as a long-term opportunity, and I believe these buying opportunities will be rewarded when the tide turns.

I allocate capital toward big tech, funds, dividends, and growth outside of my retirement accounts. These are not my only investments, but I did open a separate account, so I could easily track and document this series. I intentionally created broad diversification throughout the Dividend Harvesting portfolio so I could benefit from sector rotations and mitigate my downside risk. Investors who are too exposed to growth companies or large-cap tech have gotten crushed as the investment landscape changes. On the growth and tech side of my investments, I am feeling the pain as some of my favorite companies, including Alphabet (GOOGL) (GOOG), Amazon (AMZN), and Meta Platforms (META), have been taken to the woodshed.

This series has never been about hitting a target yield, generating a certain amount of profit, or beating the market. I had two specific goals with this series. The first was to create a blueprint for constructing a dividend portfolio by documenting the journey starting from the beginning. The second goal was to illustrate how allocating capital each week toward investing, regardless of the amount, would be beneficial in the long run.

Too many people are under the illusion that you need tens of thousands or even hundreds of thousands to benefit from investing. Instead of using my real dividend portfolio as an example, I decided to start a new account, fund it with $100, and add $100 weekly, providing a step-by-step guide to dividend investing. This methodology doesn't have to be used for dividend investing, and it could be as simple as an S&P index fund or a Total Market fund. Hopefully, this series is inspiring people to invest in their future to attain financial freedom.

Below are the fundamental rules I have put in place for this portfolio:

Below is a chart that extends from week 1 through the current week to illustrate the Dividend Harvesting Portfolio's Progression

Here is how much dividend income is generated per investment basket:

Collecting dividends can serve many functions in a portfolio. Some investors utilize dividends to supplement their income and live off. I am building a dividend portfolio for myself 30 years into the future. Since I am reinvesting every dividend, they serve multiple purposes today. In 2022 alone, I have collected $220.82 in dividend income from 264 dividends across 28 weeks. This has allowed the Dividend Harvesting portfolio to stay in the black while growing the snowball effect.

These dividends allow me to gain additional equity in my investments while increasing my future cash flow in down markets. This style of investing isn't for everyone, but if you're looking to generate consistent cash flow while mitigating downside risk, this method has worked for me. I am hoping to collect between $450-$500 in dividends in 2022, which will be reinvested, and finish the year generating >$700 in annual dividends.

The never-ending stream of dividend income keeps growing. There are now 576 annual dividends being produced after adding IGR in week 70. Dividend income is being produced every week, and I think 600 annual dividends will be here before Labor Day. It's going to be very interesting to see what these numbers look like several years from now.

The goal of generating enough income from the dividends to purchase an additional share per year has been the never-ending project of this portfolio. There are now 6 positions that are generating at least 1 share annually through their dividends, which include Starwood Property Trust (STWD), PIMCO Corporate & Income Opportunity Fund (PTY), Broadmark Realty Capital (BRMK), AGNC Investment Corp. (AGNC), the Global X Russell 2000 Covered Call ETF (RYLD), and the Global X NASDAQ 100 Covered Call ETF (QYLD). I am trying to get more of the current positions over the finish line. Eventually, more positions will generate one share per year in dividend income.

The Dividend Harvesting Portfolio Composition

In week 72, REITs extended their lead in the top spot as they are now over a full percentage point larger than the ETF section of the Dividend Harvesting portfolio. REITs represent 17.41% of the Dividend Harvesting portfolio, while ETFs account for 16.34%. Individual equities make up 44.92% of the portfolio and generate 31.75% of the dividend income, while ETFs, CEFs, REITs, BDCs, and ETNs represent 55.08% of the portfolio and generate 68.25% of the dividend income. I have a 20% maximum sector weight, so when a singular sector gets close to that level, I make sure capital is allocated away from that area to balance things out. In 2022, I will make an effort to even out these portfolio percentages. As more capital is deployed, the bottom half of the portfolio weighting will increase.

Oil, Gas & Consumable Fuels

Independent Power & Renewable Electricity Producers

Intel Corporation (INTC) has climbed into the top position by a fraction, with Verizon (VZ) in a close 2nd. I want to continue to add to INTC and VZ but will wait as they are getting close to my 5% threshold for individual positions.

I allocated the capital in week 72 toward dollar cost averaging into existing positions that were in the red. I ended up adding to 7 individual positions, which include:

Virtus InfraCap U.S Preferred Stock ETF

PIMCO Corporate & Income Opportunity Fund

I am leaning toward adding 2 new positions to the Dividend Harvesting portfolio in week 73. I have been looking at Walgreens Boots Alliance (WBA), as its yield is still above 5% and National Retail Properties (NNN), which I recently wrote an article on.

Thank you to everyone who continues to read the Dividend Harvesting series and leave comments. In week 72, I achieved a new milestone of generating over $500 in projected annual income. The Dividend Harvesting portfolio's losing streak has been extended to 5 consecutive weeks now. If the markets continue to rally, I think the -$170.92 (-2.37%) will reappear quickly, and a new positive trend will be started. I am looking forward to seeing how this portfolio progresses over the next 24 weeks and where it ends up at the close of 2022.

Barbell Capital provides investors with a comprehensive approach that utilizes growth, value, dividends, and options for income, to generate alpha in your portfolio while mitigating downside risk. Within Barbell Capital you will find exclusive research, model portfolios, investment tools, Q&A sessions, watchlists, and additional features for its members. There is also a live portfolio dedicated to generating capital from trading, selling puts, and selling covered calls. The profits will be allocated to future capital appreciating investments and investing in dividend investments to generate income while we sleep. Join today with a two week free trial!

This article was written by

I am focused on growth and dividend income. My personal strategy revolves around setting myself up for an easy retirement by creating a portfolio which focuses on compounding dividend income and growth. Dividends are an intricate part of my strategy as I have structured my portfolio to have monthly dividend income which grows through dividend reinvestment and yearly increases. Feel free to reach out to me on Seeking Alpha or https://dividendincomestreams.substack.com/

Disclosure: I/we have a beneficial long position in the shares of STWD, MPW, PTY, NRZ, PFFA, BRMK, ORCC, INTC, VZ either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I am long every position in the Dividend Harvesting portfolio. Disclaimer: I am not an investment advisor or professional. This article is my own personal opinion and is not meant to be a recommendation of the purchase or sale of stock. Investors should conduct their own research before investing to see if the companies discussed in this article fit into their portfolio parameters.