How To Build A Large Dividend Portfolio In 2021

imagine me this you're sitting on a

beach on an island off Thailand

you're drinking an ice cold beverage and

the best thing about this is you're

getting paid to do this why because you

made the decision two years ago to start

investing and dividend stocks and you

built up a massive portfolio your own

stocks like J&J ExxonMobil Chevron

Verizon coca-cola Disney McDonald's and

JPMorgan to pay you dividends every

month so that you can live this

lifestyle and guys this is the number

one reason why I like dividend stocks

because it gives you something called

passive income that's income that you

get for not having to do any work but

the important thing when it comes to

dividend investing is putting in the

work up front first you have to make the

decision to invest your money instead of

spending nuts second you have to invest

it in strong successful dividend stocks

and third you've got to make sure that

your portfolio is well balanced in

different sectors yields and countries

in this video we're going to go over the

key things you need to know when

building up a large dividend portfolio

and we'll finish off with some solid

dividend stock picks from me as well

the very first thing you should ask is

why should I even start building up a

dividend portfolio why dividend stocks

there are four key reasons I've already

told you the first one

passive income getting paid dividends

from companies for not having to do any

active work second is if you invest in

dividend aristocrat stocks they actually

beat the stock markets as you can see

from this graph since 1990 dividend

aristocrats have achieved a 12.1 percent

return compared to the markets nine

point eight percent return or so they've

done this at less risk less volatility

fourteen point two percent compared to

seventeen point four percent but

arguably the most important and relevant

reason why you ought to invest and

dividend aristocrat stocks is they tend

to do way better than most in stock

market crashes you know you'll know that

we've had an 11-year bull markets there

is a chance that the markets may crash

and if it does your dividend aristocrat

stocks will perform better than most

they'll still go down but just by not as

much as you can see through history 1990

they beat the market by eight point

eight percents and that crash the

dot-com bubble recession there was

nineteen point two percent twenty two

point seven percent and 12.2 percent

respectively and in the housing bubble

crash dividend aristocrats beat the

market by fifteen point one percent

the next logical question that you

should ask once you realize that

dividend stocks are equality investments

is where do I start

how do I choose good quality dividend

stocks the very first thing you need to

look at is the dividend yield I'm

guessing that most of you will know what

dividend yield is but basically it's

just the annual dividend divided by the

stock's price so let's just look at

coca-cola stock which is owned by Warren

Buffett its dividend yield is 2.7

percent that means that annual dividend

is 2.7 percent of the price you pay for

the stock and a good rule of thumb when

you buy a dividend stock is you really

want it at least above that one percent

yield the other important thing to look

at is the payout ratio because where do

dividends get paid out from well

earnings of course generally you want

the business to not be paying out all of

their earnings as dividends or else what

money will they use to grow their

business so again generally speaking the

lower the pea ratio the better now the

next thing that we need to question is

how reliable is the stocks dividend that

they payout in order to do this I like

to look at the dividend history of the

stock so let's look at coca-cola stock


and there's the site called macro trends

which gives you a really good insight

into their history of the dividend so as

you can see with coca-cola they have

increased their dividend payout for 56

years in a row

even when recessions have occurred

coca-cola have still managed to pay

their dividend generally speaking this

means their dividend is reliable and if

the market were to crash you would still

receive that form of income in the last

key thing that you really want to look

at when it comes to dividend stocks is

how will the company do in the future

will their earnings grow or decrease do

they have a good business model do they

have an advantage over their competitors

so you know if you think about coca-cola

do they have a good business model

yes of course the customers absolutely

love the product in a Strunk all around

the world

everyone knows about coca-cola and

that's one of the key advantages over

other soft drinks that's one of the

reasons why Buffett bought coke back in

the day because he knew about the

customer loyalty and dedication to their


so first if you want to ensure that your

portfolio does well you need to pick

good stocks that meet the requirements

that we just talked about but you also

need to make sure that your portfolio is

well balanced so I'm just showing you

what a well-balanced portfolio could

look like when it comes to the different

sectors in the economy obviously this

all depends on your particular interests

and understanding if you understand real

estate more you're probably going to

have a high percentage in real estate if

you understand technology better you're

obviously gonna own more technology

stocks I personally I do like to have a

decent amount and technology because I

know how powerful the sector is but it

depends on who you are you know Warren

Buffett likes to own a lot of financial

companies like the big banks because he

understands them he also owns a lot of

consumer staples stocks like coca-cola

and See's candy because he understands

how the businesses work and the consumer

side of things as well anyway the key

points that I wanted to make was that

you need to diversify your risk across

sectors so that if one sector goes down

you are balanced in another sector the

other thing I would recommend

diversifying across is countries you

could have all your wealth in the United

States like Buffett pretty much has but

I personally like to own stocks in a

range of countries this way if one

country does bad for a couple of years

I'm not worried because my risk is

spread throughout the world my net worth

is relatively safe so it really depends

on where you're from and what you know

but as I say Warren Buffett likes to

have pretty much all of his portfolio in

the US and having reliable dividend

companies there but I also recommend

like Charlie Munger having some portion

of your portfolio and China a country

that is growing at a very fast rate in

terms of economic GDP most likely those

dividends will keep growing as well then

you also want to be diversified in the

emerging markets those countries that

are building developing and getting

lifted out from the poor class into the

middle class

and making high returns as well along

with that's then Europe a good place to

diversify your dividend stocks into as

well and Australasia first of all

countries that are less known aka

resulting and cheaper prices and higher

dividend yields but this is by no means

a model portfolio it just gives you some

sort of idea and get you thinking on how

you can diversify your dividend stocks

across the world

but now to get you all started I wanted

to show you some quality dividend stocks

that you could potentially use to start

bulking up that dividend side of your

portfolio we've already mentioned the

stock coca-cola

it's the stock that warren buffett has

owned for years and it pays a handi

dividend as you can see it's a 2.7

percent yield with a market cap of 250

billion and they own a bunch of big

brands as well

they don't just own the drink Coke

you've got Fanta sprite Schweppes simply

orange and a bunch of other billion

dollar brands so they are well

diversified from the start another

dividend stock to own which is also

owned by Warren Buffett's is Wells Fargo

very nice dividend yield in today's

market of 4.3 percent and all provide

you good exposure to the financial

sector and the USA economy a TNC is

another stock that pays a really nice

dividend yield 5.4 percents this will

give you exposure to the

telecommunication sector and 5g as well

and up incoming industry a more global

dividend stock that you may want to

consider owning as BP there in Europe

North and South America Australasia Asia

and Africa as well and they're obviously

the fuel company that we all know but

they're also engaged in other businesses

like selling everyday items such as

paints clothes and packaging the

dividend yield is really nice at 7% so

when building a dividend portfolio I

recommend starting off with first

businesses that you understand so

whether that be coca-cola the beverage

business BP which is fuel 80

telecommunications or something like

Disney which is entertainment whatever

passion you have start there when it

comes to building up your portfolio and

then what you want to do is build and

grow upon your circle of competence and

start investing and perhaps more complex

businesses that have higher dividend

yields another thing that I reckon

and is following what stock experts are

buying for example in this video I

showed you a lot of Warren Buffett

stocks or you can see what the likes of

Ray Dalio

or some other expert is buying as I've

told you guys before my go-to guy is fen

Callan who actually beats most of these

investors that I've just mentioned

because he does not have to invest

billions and billions of dollars like

them he can focus down more with their

opportunities and smaller companies so

I'll leave a link on where you can see

his stock buys in the description below

so in order to build up a large dividend

stock portfolio start with the basics

first instead of wasting your money

invest it's pretty simple principle but

invest this money in companies that you

understand with strong dividend yields

low payout ratios a strong dividend

history strong business models and of

course a bargain price do these things

along with being well balanced in your

portfolio and you will be successful