Hi fellow mustachians, this is my first posting in the forum but I've read a fair amount of topics and I think it's fantastic. I am currently 34 years old. I inherited some money from my grandfather after he passed away in 1987. My dad then invested $2k into an income stock mutual fund and $6k in a money market (all in a taxable brokerage account). Interestingly he invested that money right before the October '87 market crash, but the markets recovered fairly quickly. Anyway, in 1998 he transferred some of the money into an S&P500 index fund and a growth & income mutual fund where the money sat and grew.
Starting in late 2012, I started to look at my investments and questioned the performance of those mutual funds. As you probably could guess, over time the S&P500 index fund outperformed the actively managed mutual funds. And of course, after the financial collapse of 2008, the interest rate on my money market account was paltry at best. So, after doing some research and reading up on various investment strategies, I decided to sell all of the money out of the funds and implement a dividend growth strategy with individual stocks. The main reasons being the fees associated with the funds, and the fact that individual stocks I could buy have a higher yield than those funds and could have a better long-term performance. I bought individual stocks in solid companies that pay good dividends, and have a track record of regularly increase their dividend year after year, or have the potential to in the future. Also, in October 2013 I changed my traditional IRA to a self-directed IRA so I could buy individual stocks, instead of just owning mutual/index funds.
First, I would like your opinion on the quality and long-term potential of my portfolio; and second if you think I should stick to investing in index funds instead of individual stocks. So far the strategy is paying off really well, knock on wood. BTW I am taking dividends as cash in my brokerage account, and reinvesting all dividends in my IRA.
IRA: American Water Works (AWK); Colgate-Palmolive (CL); Chevron (CVX); Honeywell International (HON); Johnson & Johnson (JNJ); 3M (MMM); Microsoft (MSFT); AT&T (T); Union Pacific (UNP)
Taxable Brokerage: Clorox (CLX); Cisco Systems (CSCO); General Mills (GIS); NW Natural (NWN); Procter & Gamble (PG)
Thank you so much in advance for all your opinions and 'stach on.