Why Low-Maintenance Investing Rules

Over the past two weeks, life has been more chaotic than usual for our family. We've dealt with no less than:

  • The unexpected passing of my wife's aunt.
  • My stepfather's surprise hospitalization.
  • Two cross-country business trips one of which was last-minute.
  • Several make-up ball games for our kids' ball teams, thanks to the very wet spring we've had.

Suffice it to say that we've been preoccupied with several life priorities recently that have very little to do with investing.

Still, the market doesn't care whether we've been paying attention to it or not, and it will keep shifting prices around whether we're actively moving money around or just sitting still.

Life happens. Invest anyway.
As the past two weeks have reinforced, there are so many more important things to do than sit around and watch a computer screen watching stocks move up and down. That's one key reason the real-money Inflation-Protected Income Growth portfolio is structured so that much of its rewards come from the success of the businesses it partially owns, rather than their share-price movements.

While it's true that the portfolio is down a touch more than $100 since last week's update, it was also an incredible week for those rewards. Six of the 20 companies whose stocks make up the IPIG portfolio paid their dividends last week, a nice boost for a portfolio that ran without any sort of supervision during that time.

Two of those companies, railroad tycoon CSX (NYSE: CSX  ) and safety equipment provider Mine Safety Appliances (NYSE: MSA  ) , paid out higher per-share amounts than they did last quarter. Both raised their payments by about 7% -- with CSX's moving from $0.14 to $0.15 per share and Mine Safety Appliances' rising from $0.28 to $0.30.

Two of the others, industrial conglomerate United Technologies (NYSE: UTX  ) and pharmacy retailer Walgreen (NYSE: WAG  ) , paid their fourth consecutive quarterly dividend consistent rates. United Technologies' dividend has been at $0.535 per quarter while Walgreen's has been at $0.275 per quarter.  While nothing is guaranteed until the board declares a change, if Walgreen follows its recent pattern, its next quarter's dividend declaration may very well be a raise.

United Technologies, on the other hand, has already declared that its dividend will remain static at $0.535 for a fifth consecutive quarter. That's in line with the company's recent history and isn't really surprising. Still, after that upcoming dividend, the company would also be due for an expected increase. The IPIG portfolio does count on increasing dividends to provide the inflation-protection that it aims to achieve, and an increase would go a long way toward helping the portfolio reach that goal.

The other two dividend payers from last week, software titan Microsoft (NASDAQ: MSFT  ) and industrial engineering giant Emerson Electric, hit their third quarters at consistent rates. Microsoft's dividend has been at $0.23 per quarter, while Emerson's has been at $0.41 per quarter. As with United Technologies, Microsoft has already declared a consistent dividend for next quarter, while Emerson is expected to declare an unchanged dividend in August.

Don't work -- still get paid
Perhaps the best part of the week was that those payments -- two increases, and four steady -- came while "life happened," with no additional work needed on the IPIG portfolio's (or its manager's) part. Every company in a portfolio does need to be reviewed occasionally to be sure it's still worth owning, but it's sure comforting to know that it's possible to invest while still having a life outside the market.

By focusing on the companies behind the stocks and the income they generate for their owners, the IPIG portfolio can afford to be fairly low-maintenance while still being on track to meet its goals. That combination is a great one to have for people who want the rewards of investing without the need to constantly tweak and heavily manage their holdings.

iPIG portfolio snapshot as of June 14, 2013

Company Name

Purchase Date

No. of Shares

Total Investment (Including Commissions)

Current Value

United Technologies

12/10/12

18

$1,464.82

$1,692.36

Teva Pharmaceutical

12/12/12

38

$1,519.40

$1,485.04

J.M. Smucker

12/13/12

17

$1,483.45

$1,751.17

Genuine Parts

12/21/12

23

$1,476.47

$1,808.72

Mine Safety Appliances

12/21/12

36

$1,504.96

$1,648.44

Microsoft

12/26/12

55

$1,499.15

$1,892.00

Hasbro

12/28/12

43

$1,520.60

$1,895.87

NV Energy

12/31/12

84

$1,504.72

$1,979.88

United Parcel Service

1/2/2013

20

$1,524.00

$1,718.20

Walgreen

1/4/2013

40

$1,501.80

$2,007.20

Texas Instruments

1/7/2013

47

$1,515.70

$1,667.56

Union Pacific

1/22/13

6

$805.42

$942.12

CSX

1/22/13

34

$712.50

$847.96

McDonald's

1/24/13

16

$1,499.64

$1,574.72

Becton, Dickinson

1/31/13

18

$1,518.64

$1,775.52

AFLAC

2/5/13

27

$1,466.35

$1,552.77

Air Products & Chemicals

2/11/13

17

$1,510.99

$1,637.95

Raytheon

2/22/13

27

$1,473.91

$1,820.07

Emerson Electric

4/3/13

28

$1,548.12

$1,571.92

Wells Fargo

5/30/13

37

$1,525.48

$1,485.92

Cash

     

$1,735.68

Total Portfolio

     

$34,491.07

Data from the IPIG portfolio brokerage account, as of June 14, 2013.

To follow the IPIG portfolio as buy and sell decisions are made, watch portfolio manager Chuck Saletta's article feed by clicking here. To join The Motley Fool's free discussion board dedicated to the IPIG portfolio, simply click here.


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