So what's next?

Well, not a great deal of activity at the moment as I am yet to hit the minimum £1000 of received dividends before I buy any more shares.

Why £1000? Well, to limit the erosion of dealing costs. The broker I use charges £12.50 a trade, so I'm only paying 1.25% on a £1000 trade, but if I were to trade in smaller amounts the percentage would creep up and become uneconomical.

Ready for when I do have enough funds I am already on the look out for the next purchase. I could top up, of course, but as the portfolio is new I am looking for further companies at the moment. Topping up will come later.

I'm looking for companies in sectors where I am not really in at the moment. The dividend yield must be at least 4.5% at the current price, covered ideally twice by earnings (but I will accept a minimum of 1.7 times).

So what have I found? GKN - it's an old, established, solid company in a sector I don't really have much exposure to (aerospace/defence) and has a long history of rising dividends. The share price is not far off current year lows, giving a current yield of 4.8%, rising to 6.2% within two years and more than twice covered by earnings.

I have another couple of ideas, but they are secondary to GKN. At the moment, I think I will have enough funds to buy at September at the latest - let's hope the share price stays down at this level until then! :-)

On a side note, there has been a lot of speculation about the Housebuilders this week. Will their dividends be slashed? Will they be able to cope with land bank write offs etc? Well, I've committed to myself that until something is 100% confirmed by a company I am not going to listen to rumour. So Barratt Devlopments, Taylor Wimpey and Persimmon stay in the portfolio.... for now at least!