My Latest Stock Buys: AWP, USA

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In early October, thanks to limit orders placed in September and the market drop in early October, I made two stock buys.

First, I bought 100 more shares of Aberdeen Global Premier Properties Fund (NYSE:AWP) at $6.00 per share. With a monthly dividend of 5 cents per share, this will add $5.00 every month to my total dividend income.

Second, I bought 80 shares of Liberty All-Star Equity Fund (NYSE: USA) at $6.60 per share, a new addition to my portfolio. With a quarterly dividend of 17 cents per share, this will add $13.60 every three months to my total dividend income. Why USA? It’s a closed-end fund with the following characteristics that made me want to invest in it:

  • Zero leverage. Many of my portfolio’s ETF/CEF investments have been in leveraged funds (yes, I was dazzled by high yields at the time too), but I know better now and prefer to invest in funds with little or no leverage or in companies with good financials.
  • It’s old (created in 1986). I prefer to invest in funds or companies that have been around for some time, as they have weathered previous recessions and economic crises. This indicates that there’s competent management at the helm.
  • It has a high, but not crazy-high, yield. At the price I bought USA, it has an annual  yield of 10.3%. That’s just about the upper limit of yield I feel comfortable with. Crazy-high yields of 11-12% or more should be avoided, as such high yields usually cannot be sustained for very long.
  • Quality equities. USA is almost entirely invested in individual companies. I like the diverse mix of USA’s holdings with 24.8% in information technology, 16.5% in financials, 15.1% in health care, 8.6% in consumer staples, 8.0% in energy, 6.2% in industrials, 3.3% in materials, etc. USA’s holdings are largely (91%) in US companies, with the rest being 8.5% in western European countries, and 0.5% in Asia.

Together, these two stock buys will raise my projected average monthly dividend income by $9.53. I know that’s not much, but it does boost my dividend income just a little bit, and that’s progress.

Both of these buys should prove to be good investments, but only time will tell how good of a choice I made.

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