DIVIDEND PORTFOLIO UPDATE

My Favorite Restaurant I couldn't resist showing you a picture of my favorite restaurant, The Tschoupitoulas Steak House. It's also in one of my favorite towns, Crockett, Texas, The home of the Camp Street Cafe and Store, which is neither on Camp Street nor is it a Cafe and store. It is the home of my favorite music venue and is owned by my favorite cowboy poets/musicians, The Gillete Brothers. One of the pioneers of country blues, Lightnin' Hopkins used to play on the streets there in the early 1900's. The picture next to the cafe is a sample of what's happening to small town America. Alan Greenspan would call it an example of "Creative Destruction" which describes how older/obsolete institutions are destroyed so that newer, more efficient institutions can take their place. I suppose I may also be an example of these old/obsolete intuitions that are being destroyed to make room for the youngsters. In any event, I am grateful for places like this and not sure every example of creative destruction is all that creative.

On The More Practical Side. I told you I would give you periodic updates of the portfolio I put together last December to illustrate alternatives to risk free examples. I am not sure how long I am going to keep publishing these updates. One of the advantages of portfolios like these is that you don't have to watch them every day. I hope you don't find these updates too boring.

1. Ameren Corporation (AEE). Investment amount was $17130 and current value is $16524. Dividends since January 31 are $234.

2. Bristol Meyers Squibb (BMY). Investment amount was $18360 and current value is $19103. No dividends were received this quarter.

3. Duke Energy. (Duk). Investment amount was $19,300 and current value is $19,602. Dividends of $275 were received this quarter.

4. Lockheed Martin (LMT). Investment amount was $20460 and current value is $24,111. Dividends received were $225.

5. Medical Properties Trust (MPW). Investment amount was $20240. Current value is $22140 with dividends of $400.

6. AT&T (T). Original investment was $17,526 and current value is $17310. Dividends received this quarter were $258.

7. Health Care Properties (HCP). Original investment was $19512 with current value of $22038. Dividends this quarter were $282.

8. Kinder Morgan Partners (KMP). Original Investment was $20777 and current value is $22137. Dividends this quarter were $339.

9. Fidelity National Financial (FNF). Original Investment was 19,570 and current value is $19,306. Dividends this quarter were $168.

10. Windstream Corporation (WIN). Original Investment was $26,860 and current value is $24,491. No dividends received this quarter.

The Bottom Line. As of today's date, the total value is $206,762 as opposed a total original investment of $199753, Dividends this quarter were $2181. Since our original investment four months ago, we have earned total dividends of $3,964. This is equivalent to an annualized return of 5.95%. Approximately 3 times as much as you would have earned on a one year CD. In addition, we would have received a preferential tax rate. Of course, you could sell out and get a capital gain of $7,000+ but I would prefer not to count that since it may disappear should the market correct in the future.

Just A Sample. This is the kind of portfolio I would recommend for conservative investors who want current cash flow. If you have a highly paid job, are several years away from retirement, and have a higher risk tolerance, I might recommend something more aggressive; however, I believe now is the time for most investors to be more conservative and, even if you don't need income to live on, you might want to collect cash flow to take advantage of better opportunities that may arise in the future.