6 Investment Tools to Help Build a Solid Dividend Income Portfolio

by John Schroeder

Investing in the stock market can often feel like a full time job if you don’t watch yourself. There is so much information buzzing around out there about the stock market and individual companies. From financial analysts predicting where the market is heading to daily news on individual companies – it can be hard to keep up on your research.

Dividend investing tools

These investing tools make dividend investing easier.

While I do spend a lot of time each month researching the overall market and individual stocks, I have also leveraged a couple of tools to help me along. Some of these tools help me save time while others save me money. Some of these investment tools are tangible and others are more of an investment strategy.

I thought it would be helpful to list a few of these tools that save me time and money building my investment portfolio. Here are 6 tools that are helping me build my dividend income portfolio.

1 – Personal Capital – Free Online Portfolio Manager

I recently started using Personal Capital to track my net worth, asset allocation, and portfolio holdings. This free online money management tool can automatically aggregate financial data like credit card balances, savings and checking account balances, and your investment holdings. Similar to Mint, Personal Capital can simplify your life by giving you an overall view of your personal finances. Users simply sync up their financial accounts with Personal Capital and the tool does the rest.

Open free Personal Capital accountAfter using the tool for just a short time, I have already found plenty of benefits for tracking my dividend income portfolio. Since I hold stocks through multiple brokers (ie. Fidelity, LOYAL3, CapitalOne, etc.), Personal Capital allows me to look in one place to check up on my portfolio instead of having to login to multiple accounts.

Personal Capital offers both online access as well as through mobile apps. Setting up an account is free, only takes a few minutes, and has saved me a ton of time in just a few weeks. You can get a free Personal Capital account here.

2 – Microsoft Excel

While Personal Capital helps simplify how I track my dividend stocks, there are plenty of things it cannot do. I use Microsoft Excel to track my dividend stock holdings and to calculate important ratios related to my portfolio. For example, I use Excel to calculate my current yield on cost as well as my annual dividend income. These are two important calculations that every dividend income investor should know.

Each month after I make my monthly automatic investments and receive dividend payouts, I update the spreadsheet with these transactions and let the spreadsheet do the rest. Even with all the different online financial apps, I still find value in using spreadsheets as tools to build my portfolio.

3- Automatic Investment Plans

Since I am still in my allocation phase of building a dividend stock portfolio, I like to use automatic investment plans. Every month I invest small chunks of money into a variety of stocks (8 right now) at either no or very low costs. This tool helps to diversify my portfolio by allowing me to spread my investment dollars around each month. It is also a great way to dollar cost average your stocks and it saves me a ton of time each month.

A few online brokers offer automatic investment plans but not all of them. Other options include using a transfer agent (see below) or a platform like LOYAL3 (see below).

4 – Dividend Reinvestment Plans (DRIP)

Another tool that I use is setting up DRIP’s on my dividend stocks. Setting up a DRIP on your investment basically tells your broker to reinvest any dividend payments from a stock back into more shares of that same stock. This tool helps me save time since the reinvestment happens automatically. It also allows me to buy partial shares of a company to keep my investment compounding sooner rather than later.

For more information on this investment tool, check out – What is a DRIP?

5 – Transfer Agents

These are third party entities used by publicly traded companies to keep track of investors who own their stock. Instead of buying stock directly from a company, investors can use a transfer agent handle the transaction.

One transfer agent that I use every month is Computershare. Through this transfer agent, I invest in companies using direct stock purchase plans and DRIPS. Instead of buying stock directly from the company or through one of my online brokers, I buy partial shares each month using Computershare.

Depending on the company, investors can also setup automatic investment plans when buying stock. In some cases, the company in which you are buying shares in will even cover any commissions or fees. I currently invest in 3 different companies each month through Computershare which allows me to slowly dollar cost average into a stock. This method of buying stock also helps me save time each month and in many cases saves me on investment fees and commissions.

It is important to note that a company will only use one transfer agent, which may or may not be Computershare. A few other common transfer agents include – American Stock Transfer & Trust Company, BNY Mellon Shareowner Service, and Wells Fargo Shareowner Services

6 – LOYAL3 – Free Stock Trades

Loyal3 - Invest as Little as $10.  Pay No Fees.LOYAL3 is a fairly new trading platform where investors can buy stock for as little as $10 while paying no fees on their transactions. I have been using this platform for several months now as a tool to buy dividend growth stocks.

I take advantage of their automatic investment plans they offer. Each month, I automatically buy shares in several stocks by using a credit card. Yes – you can buy stocks from LOYAL3 using a credit card! I certainly wouldn’t recommend this to anyone with credit card debt. However, if you pay off your balance every month then you can earn credit card rewards for buying stock.

If you are a dividend growth investor like me, there are a couple nice gems available. For example, the following dividend aristocrats can be purchased for as little as $10 a month:

  • Coca-Cola Co (KO)
  • McDonald’s Corp (MCD)
  • Wal-Mart Stores (WMT)

LOYAL3 is another tool I have been able to leverage to help me build my portfolio of dividend stocks. Here is an in-depth review of LOYAL3.

Final Thoughts

The 6 tools listed above are helping me build a solid dividend income portfolio. While I am still the one making all the decisions, these tools help guide me there. Some tools like automatic investment plans and DRIP’s save me time. Others like LOYAL3 save me on commissions and fees. Together these tools let me focus more on research and less on maintaining my stock portfolio.

What investment tools can you recommend that are not covered in the list above? I would love to hear about any opportunities out there that can help me (and others) save time and money when investing.

Published or updated February 25, 2014.
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{ 3 comments… read them below or add one }

1 Bryce @ Save and Conquer

LOYAL3 looks kind of interesting, but I am still convinced that I am happier and getting better returns with low-cost passive index funds than when I used to trade individual stocks.


2 John Schroeder

What type of returns are you getting with these index funds?


3 Bryce @ Save and Conquer

Hi John, If I were younger and 100% invested in the Total US Stock market, I would have received a 30% return last year. That is including the fund expenses of 0.05%. Since I also have quite a bit of my portfolio in a short-term bond index fund for downside protection, I received more like an 18% return last year. I am sure there are many people who had better returns, but there are many who did worse.

Looking at the historic return since 1926 for a 50/50 stock/bond portfolio, the average annual return over the past 88 years is 8.3%, with 17 years out of the 88 years having a negative return.


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