| Asset Allocation | Actual | Target | Diff. | |
| Cash/Fixed Income | 24.3% | 24.3% | 0.0% | |
| Equities-Domestic | 47.5% | 45.9% | 1.6% | |
| Equities-International | 23.4% | 25.0% | -1.6% | |
| Employer Equity | 4.8% | 4.8% | 0.0% | |
| Total | 100.0% | 100.0% | ||
| Cash/Fixed Income | 24.3% | 24.3% | 0.0% | |
| Large Cap. | 55.4% | 54.9% | 0.5% | |
| Small/Mid Cap. | 15.5% | 16.0% | -0.5% | |
| Employer Equity | 4.8% | 4.8% | 0.0% | |
| Total | 100.0% | 100.0% | ||
Asset Allocation
Given the unsustainable low interest rates, and the associated future price pressure, I chose to begin lowering my overall bond allocation in the fourth quarter. When rates move up bond prices will be negatively impacted.At the end of the fourth quarter my asset allocation was reasonably close to my target. My philosophy is to buy the best dividend stocks available and adjust my allocation using my 401(k) and other investments, when needed. None of the variances are above my 2.5% tolerance, so I will adjusted them with future purchases.
2011-Q4 Performance
After under-performing in the first quarter, my income portfolio, pocket-change-portfolio and income ETFs portfolio out-performed the S&P and Berkshire Hathaway (BRK.B) year-to-date through December. Below are the YTD performances of various categories along with my S&P 500 (VFINX) and Berkshire Hathaway (BRK.B) benchmarks:| Portfolio | Lifetime Wtd. Avg. | '11 YTD |
| Income Stocks | 10.5% | 20.9% |
| Pocket Change (9/08) | 17.1% | 17.0% |
| Income ETFs | 2.3% | 2.8% |
| S&P 500 (VFINX) | 1.9% | 2.4% |
| BRK.B | -3.2% | -4.8% |
| Income Stocks vs S&P | 8.6% | 18.5% |
| Income Stocks vs BRK | 13.7% | 25.7% |
When weighted with results from 2008 forward, all my income investments also out-performed the S&P and BRK. As I have previously stated, it is my desire to beat the S&P over the long-run, so I don't pay a lot of attention to short-term performance either positive or negative. For more details on the performance of my income portfolios, including year-by-year performance and cumulative chart, please click here.
Passive Income
For Q4/2011 my passive income averaged $1,605/month, up from the $1,355/month in Q3/2011. The increase resulted from higher dividends in all my portfolios, offset by lower interest income from cash investments. The above amounts include all sources of passive income in my taxable accounts, primarily interest and dividends. It excludes my Roth IRA, 401(k) and blog income (which is not passive).The next update will be in late-April. As always, thanks for reading! See a list of all my dividend growth holdings here.
(Photo: sanja gjenero)
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