Larry, "getting started" implies "beginning". A "beginning" has to start with your particular circumstances and your goals. Since you didn't include the "beginning" information, I'm going to make some assumptions.
Assumption 1.
You are working and in the accumulation phase of investing.
Assumption 2.
You already have some money saved and it is liquid and/or in Mutual Funds.
If you read Josh Peters (August issue, Dividend Investor Newsletter), you will see that only 14 stocks are recommended to buy at this time and 5 to hold. Also, when you read back issues you will see that Peters has strong reservations about BAC (he sold over half his original position in late April). That leaves 13 Builder candidates for purchase.
Peters has indicated that he favors holding more stocks in smaller quantities rather than concentrated positions in just a few stocks. Also, look at the dollar amount for each holding in the Builder portfolio. Every stock offers a risk/reward possibility at purchase, and even though determining this ratio is imprecise, it is generally a good idea to purchase larger positions when the balance is more favorable and smaller positions when the risk/reward balance is more uncertain.
IMO, if you have sufficient funds available to buy a position in all 13 stocks there is nothing wrong with doing that. However, if you are accumulating, it may not be financially feasible to buy them all at once in sufficient quantity. Even with low brokerage costs of $5 to $10 per transaction, it is cost prohibitive to buy just a few shares of each stock each month. You can make a list of a select few of the Builder stocks, each in a different industry for diversification purposes, and then save your money in a Money Market until you have accumulated enough to invest (enough so that the transaction cost is a low percentage of the transaction), and then make your purchase.
Investigate if the stocks you are interested in have a DRIP purchase plan. Drip plans may allow you to accumulate in smaller quantities at reasonable transaction costs.
If you are just starting Dividend investing, read Josh Peters new book, "The Ultimate Dividend Playbook". Also, read "The Single Best Investment" by Miller. Read them both before investing!
"Should I purchase equal shares of each stock, or equal
dollar amounts of each stock?"
IMO, neither. Size your investments by risk/reward considerations.
"Should the portfolio be re-balanced periodically, i.e. once
a year?"
I assume you mean re-balance between stocks and bonds. If you feel the need to maintain some sort of balance between stocks and bonds in your portfolio, do it by redirecting new money, not by selling the appreciated asset. IMO, the primary reasons for selling a stock is if the stock cuts its dividend or if it appreciates so much that its yield falls below your standards or becomes grossly overpriced. Stock trading decisions are heavily influenced by whether your portfolio is held in a taxable or tax deferred account.
Regards,
Russ
