Starting fresh with a new portfolio can be one of the most exciting—and intimidating—moments in your investing journey.
You’ve got a lump sum of cash. You know you want to build something smart with it. And you’re drawn to dividend growth investing for all the right reasons: predictable income, long-term compounding, and the peace of mind that comes from owning quality businesses.
But then the questions start stacking up.
How many stocks should I own? Which sectors do I need? Should I invest all at once or gradually? And how do I even begin to analyze a stock without going down a rabbit hole?
These are exactly the questions Brad, a Dividend Stocks Rock PRO member, asked me not long ago. Brad wasn’t a beginner—he had been reading financial blogs for years and understood the theory behind dividend investing. But when it came time to actually build his portfolio, he was stuck.
“I know where I want to end up,” he said. “But I don’t know how to get there.”
That conversation inspired me to put together a detailed, step-by-step resource called The DSR Investment Roadmap. In this article, I’ll share some of the key takeaways from the roadmap—enough to get you moving in the right direction. And if you want the full, printable version with more examples and tools, you can download it for free below.
Step 1: Set Your Ground Rules
Before researching any stocks or screening for financials, start with a clear framework. Ground rules give you structure, clarity, and consistency in how you build and manage your portfolio. Here’s what I recommend defining upfront:
What’s Your Investment Philosophy?
Do you aim for total return, stable income, capital preservation, or a mix? This will influence every other decision. My personal approach is 100% equity, fully invested, split roughly between Canadian and U.S. stocks. That gives me global exposure, sector variety, and long-term growth potential.
What’s Your Time Horizon?
Think long-term. Personally, I plan for 50+ years—even if that takes me well into my 90s. That mindset makes market corrections and bear markets easier to handle because I’m not investing for the next quarter—I’m investing for the next generation.
How Many Stocks Will You Manage?
There’s no magic number, but your capacity matters. I’ve found that managing 20–40 positions strikes a good balance between diversification and attention. Too few, and you risk concentration. Too many, and you’ll lose track of the details.
What’s Your Target Position Size?
Once you’ve picked how many stocks you’ll own, divide 100% by that number to get your ideal allocation per stock. For 35 positions, it’s about 3%. That becomes your compass: When a stock dips under 1%, ask if you’d be willing to build it back up. If not, it might be time to sell.
What Sectors Do You Understand?
You don’t need exposure to all 11 sectors. Instead, focus on five or six where you understand the business models. For me, that includes finance, tech, and industrials. Start where you’re confident, and diversify gradually.

Step 2: Start Filtering with Simplicity
Once your ground rules are in place, it’s time to dive into the data. But here’s where many DIY investors go off track: they get lost in spreadsheets, filtering for 20 metrics and trying to read the tea leaves in every financial statement.
You don’t need 20 filters. I use three.
I look for companies with:

-
At least 1% revenue growth over the last 5 years
-
At least 1% earnings-per-share (EPS) growth over the last 5 years
-
At least 1% dividend growth over the last 5 years
That’s it. Why so simple?
Because I’m looking for businesses that are moving in the right direction. These three metrics form what I call the dividend triangle: revenue, earnings, and dividends. When all three are trending upward, that’s a strong sign of a well-run, sustainable business.
These filters will cut your list from thousands of stocks to a few hundred. From there, you can narrow down further by sector. Focus first on sectors you understand or want more exposure to. Skip the ones you already own heavily or don’t feel confident analyzing. You don’t need to be in all 11 sectors of the market. Five or six is enough to build a diversified, resilient portfolio.
Step 3: Analyze Stocks Without Getting Stuck
Even after filtering and narrowing by sector, you’ll likely still have dozens of candidates. The next step is to analyze individual companies—but without falling into “paralysis by analysis.”
Too often, investors feel like they need to be experts in accounting or read through years of 10-K filings to make a decision. That’s not realistic or necessary.
Instead, I ask one simple question first:
Can you explain the company’s business model to a 12-year-old?
If you can’t clearly describe how a company makes money and why it has a competitive advantage, you probably don’t understand it well enough to invest. That doesn’t mean you need every detail—but you need clarity.
Once you’re confident in the business model, revisit the dividend triangle. Are revenues, earnings, and dividends all growing in sync? A strong triangle suggests a company with healthy margins and the discipline to return capital to shareholders.
After that, look at the growth vectors (what will drive future revenue and profit?), the risks (what could derail the story?), and the dividend safety (can the company continue increasing its payout even during rough patches?).
Finally, check valuation—not to time the market perfectly, but to avoid overpaying for hype. Tools like dividend yield history, the Refinitiv value score, and P/E ratio averages can all help here.


Want the Full Step-by-Step Playbook?
This article gives you a strong foundation. But the full DSR Investment Roadmap takes it much further.
Inside, you’ll find:

-
A detailed process to filter and compare stocks within each sector
-
Tools to build and test a mock portfolio before investing real money
-
A framework to decide how and when to deploy your cash
-
Tips on how to review your portfolio and stay invested with conviction
If you’re ready to go from hesitation to execution, this roadmap is for you.
Enter your email to get the free roadmap. You’ll also receive our top resources and early access to our webinars—no spam, just high-quality dividend investing insights.
Leave a Reply