Wednesday, April 1, 2020

Recent buy: KO, MSFT, SYK

Today I added the following companies to my portfolio:

Stryker: $769
Coca Cola: $649
Microsoft: $623

Total invested is around $2K

Wednesday, March 25, 2020

Recent buy: V, KO, T, ABT

Today I bought the following. Around $3804 deployed.

03/25/202003/27/2020
Pending
Buy
MEDTRONIC PLC SHS
MDT
10$87.51-$875.10
03/25/202003/27/2020
Pending
Buy
ABBOTT LABS
ABT
10$70.65-$706.50
03/25/202003/27/2020
Pending
Buy
AT&T INC
T
20$29.18-$583.60
03/25/202003/27/2020
Pending
Buy
COCA COLA COM
KO
20$41.69-$833.80
03/25/202003/27/2020
Pending
Buy
VISA INC CL A SHRS
V
5$161.50-$807.50

Wednesday, March 18, 2020

Recent buy: O, MO, GD

Today the S&P500 fell around 8% when I added some buys. This was another large leg down, so I executed a few buy orders.


In previous days, I was adding more into companies with lower yields but higher long term growth potential. Today I want to add more to higher yielding companies to increase my income.

MO was down over 8%, it now yields a whopping 9%, and I find this dividend to be safe.
I added $556

O was down over 26%. Ironically they increased their dividend today. O now yields 6.8%, basically double a few days ago. The fall has been unprecendented.
I added $736

GD was down over 9%. It now yields around 3.7%, a lot for a company that usually yields in the low 2%.
I added $243

Both MO and GD are now in single digit P/E territory so they are very cheap.

My cash sits at around $25,191.

The amount of dividends that one can now receive for each dollar deployed is substantially more than it was a few weeks ago. The goal is to find companies that can maintain that dividend with good payout ratios and good financials to weather out the Coronavirus situation.


Monday, March 16, 2020

Recent buy: ADP and MSFT

The S&P500 fell around 9% today. I bought towards the latter 1-2 hours of the day on Monday trading.

Previously on last Friday the S&P rose around 10%, and the previous Thursday it fell around 10%. So we have had a lot of huge see saw movements in the S&P that has not been seen before in a long time. This level of volatility offers good bargains over time.




In times like now, it is best to avoid timing and just dollar cost average into the market. Have a predefined list of what stocks to buy and then buy the ones that move progressively lower and the yields move up.

Today I invested around $2167. Not a lot but over the days it will add up. I still have around $20K left in my cash reserve that need to be spent.

Monday, March 9, 2020

Recent buy: V

The S&P fell around 7% today.

I picked up some shares of Visa. Not a lot, just buying on the way down.
Added 4 shares for around $700 USD.

Visa is around 18% off from its highs.


Large price declines are times of great opportunity. I still have around $21,000 in cash with more on the way. As long as I have my job I will keep pouring it into the stock market as it goes lower!

In times of uncertainty, I always look for companies with the strongest financial strength and also consistently increasing earnings and sales (bottom line and top line). Companies I am eyeing right now include: V, MSFT, ADP. I have SYK and ABT also, although their financials are not as strong as the other 3, but still good. I also have GOOGL on the list even though they don't pay a dividend.

Note that my focus now is to acquire more companies that have a growth focus so the dividend yield is not as high on these types of companies.

Saturday, March 7, 2020

February 2020 Dividends Received

February dividends came in at $1218.

Ticker      Total    Taxable         401k
T $300.75 $300.23 $0.52
CLX $190.87 $190.87
PG $126.81 $115.32 $11.49
APD $119.20 $119.20
GIS $112.77 $74.46 $38.31
CL $86.78 $74.00 $12.78
O $75.50 $75.50
SBUX $65.87 $51.67 $14.20
GD $56.48 $56.48
ABT $45.50 $45.50
MA $37.86 $18.99 $18.87
INTEREST $0.38 $0.26 $0.12
$1,218.77 $1,046.98 $171.79



Monday, March 2, 2020

Recent buy: MO, V, SBUX, ADP

The following was added to my portfolio today:

MO: $2339
V: $4062
ADP: $2017
SBUX: $1968

Around $10.3K was spent today. Still have a lot of cash and more cash coming in, so averaging down as the market moves further down.

Saturday, February 29, 2020

January 2020 Dividends Received

Apologies for the late reply, been very busy recently and not been very on time in typing what I have been trying to do with my portfolio. The Coronavirus situation is disturbing my usual ways of life as I travel a lot for business and I had to adapt recently. Coronavirus has also really impacted my portfolio.

I have not purchased any stock for at least the last 3-4 months, so my cash horde is growing. I'll post more about what I plan to do with that this week. I suggest all investors to get a buy list with targets ready and start dripping into them as the market tanks further due to the virus.

Ticker      Total    Taxable         401k
MO $602.69 $525.85 $76.84
PM $479.05 $421.70 $57.35
PEP $212.20 $179.02 $33.18
KMB $154.52 $111.30 $43.22
XEL $139.51 $139.51
ADP $125.90 $125.90
ITW $120.21 $97.27 $22.94
MKC $79.67 $53.35 $26.32
O $73.65 $73.65
SYK $45.97 $40.76 $5.21
MDT $40.55 $40.55
INTEREST $0.25 $0.25

In January we had a very good month. I acquired over $2K in dividends, we broke the 2K barrier.


Saturday, February 1, 2020

Likely buying opportunities: Coronavirus

It looks like we may finally be getting the catalyst to start a correction or recession, the moment value investors have been long waiting for. This will offer an opportunity to purchase more shares at low prices. China was already hit with trade taxes with the US, and had been slowing down due to it. And now paired with the Coronavirus, the hit to the second largest economy will be impactful. Factories are closing down and citizens are being asked to not go to work or work from home. Stores are also closed such as Starbucks and Apple for example. This will have ramifications globally if it extends for a long period of time, as revenue is basically stopped.

We have cases of temporary blips in market valuation from pandemics like SARS or Ebola, with corrections around 20-25%. However, nobody knows if the Coronavirus will be far more severe. Currently the number of cases for Coronavirus is already exceeding that of SARS, but today we have much better technology to combat these viruses.

In terms of buying, I have not pulled the trigger. I think in the month of February, my cash pile will start to approach $30,000 USD. My plan will not be to deploy it all at once and try to time the bottom. I will add as the market drops or stays depressed. For example if we get to -10% off S&P highs I will start deploying a bit. And -15 to -20% I will deploy more. 

Going forward, I plan to invest heavily into a few names that I feel are winner type companies. I have already built a portfolio over $800,000 USD in a diversified set of dividend aristocrats and consistent dividend payers. I think it's getting too diversified, to the point that it hinders performance. That is the nature of diversification, it dilutes the good ideas with the average ideas. However, I am not saying in any way I am not happy with the portfolio, it has done its job very well and is very conservative.

I think all my positions are great holdings, but only a few are truly outstanding companies. Going forward, since I am still young, I will focus more on growth and dividend growth, and less on the dividend income. I have found that the companies that yield higher but raise dividends more slowly are hindering growth opportunities for my portfolio. And since I am not 30 years old yet (almost), I want to start prioritizing some growth since I have already finished building much of my portfolio's foundations. I want to start picking some companies with high growth which will in the future after many years become the new set of dividend aristocrats, and by then their yields should be high and growth lower.

Watchlist (my high growth selection):
Technology 
 - ADP: Automatic Data Processing
 - MSFT: Microsoft

Financials
 - MA: Mastercard
 - V: Visa

Discretionary
 - ROST: Ross Stores

Healthcare
 - SYK: Stryker
 - TMO: Thermo Fisher Scientific

Staples
 - MKC: McCormick
 - CHD: Church and Dwight

Saturday, January 18, 2020

2019 Year End Portfolio Summary

As of the end of day on 12/31/2019 the portfolio is sitting at $813,979.31 USD
As I am writing this post on 1/18/2020, after the new year, the portfolio has moved up to $842,509.77 in large part from continued expansion in the US markets. It appears the portfolio is moving ever closer to the $1million goal mark I set out to do 6 years ago in 2013.

I'll start with a market background for the year, and then the portfolio summary.

The year started very poorly, with the SP500 correcting largely from the highs in 2018. A lot of events happened in 2019, a major uncertainty was the trade deal with the US and Chinese and also the tightening Fed policies which put a crunch on liquidity. After the new year, the Fed started enacting more quantitative easing and accommodating monetary policy like stopping the raise of interest rates and increasing the number of assets they were purchasing. Since the year started at basically the bottom, the growth throughout the year was huge. Then late in 2019 and early 2020, the China and US "appear" to have a first phase trade deal agreement. The trade deal uncertainty created a ceiling for US stock markets, with this battle between the US and China easing down, markets increased. However, I am skeptical how real of a progress this first phase trade deal really is. I use the SP500 as a reference as the portfolio holds many large cap stocks and they move rather in tune with the SP500, although a bit more defensive.

 
In 2019 the SP500 returns was 31%, this is huge. I usually do not focus on percentage returns of my portfolio as my goals are to reach $1M by 30 years old, and increase and manage the risk of my dividend income. Comparing my performance to the SP500 index is not of interest to me as I already have my goals defined, which to me is independent of how the SP500 performs. However, since comparing one's performance against the index is very important to some, and also  interesting I guess, I will show the table below for comparison:
 
Type 2014 2015 2016 2017 2018 2019 Growth of $10K Annualized Return
Young Dividend Portfolio 14.19% 6.73% 10.24% 20.42% -0.79% 29.51% $20,787.93 12.97%
Vanguard 500 Index Fund 13.51% 1.25% 11.82% 21.67% -4.52% 31.33% $19,606.88 11.88%
 
In 2019, I lagged the index by a few, but the returns are still respectable at near 30%. This is huge, but I think not sustainable. Since my portfolio does not have a lot of high alpha picks like hot tech or industrials or discretionary stocks, I lagged behind since I hold more conservative defensive companies. When times are good, people want to own the hot stocks and not the conservative dividend paying companies. But even so, dividend companies still performed respectably in 2019.
 
Since inception, my portfolio has done slightly better, but very similar to the largest 500 companies in the US. However, my portfolio generates more dividend income and the growth of that income is much more consistent. The figures above include dividends reinvested. The calculations for the Young Dividend Portfolio had some approximations as positions are constantly being added throughout the year due to my income flowing in, however, the figures above are quite representative of how my portfolio performance relative to the index. 
 
I have noticed my portfolio has similar or higher gains than the SP500 but has lower draw downs. The standard deviation for 2019 for example is 8.6% for my portfolio, while the SP500 is 12.9%. The max percentage draw down in 2019 was double for the SP500 when compared to my portfolio. Similarly, you can also notice in 2018, annual returns, my portfolio drop was less than half of the drop of the broader market. This is because my portfolio holds more defensive and non-cyclical businesses that can still survive when there is a recession. I do not own much in industrials, technology, or raw materials for example, which have high alpha. 
 
When the economy does well, I predict my portfolio will ultimately fall behind, but when times are tough I believe my portfolio will hold up much better than the broad index. I believe my portfolio in the long run will outperform the general market since my declines will be less and the "guaranteedness" of the dividend will help provide dependable returns in good times and bad which acts like a buffer. To illustrate the power of percentages when a correction happens: a 50% drop from 100 to 50 will require a 100% gain to move from 50 back to 100. Hence, I always am in favor of protecting the downside than chasing upside. I believe in another 50% broad market crash, my portfolio will only crash 35% according to backtests of similar characteristic portfolios back in 1998, 2000, and 2008. My goal is to build a portfolio that generates more income, has larger annual dividend increases, has less volatility, while maintaining similar or more total returns, than the broader market. 
 
The market has recovered for over a decade now since the housing recession. And has produced tremendous returns. However, one issue I have is that earnings have not been keeping up with price increases of stocks. As a result, 2020 is turning out to be a very expensive year to buy stocks, so I have not bought anything in a long time. My cash pile continues to grow. At the moment it is over $20K. I remember back in 2014, I thought prices were expensive relative to 2009 to 2012. However, looking back, prices in 2014 look really good compared to where they are now...

Thursday, January 2, 2020

December 2019 Dividends Received

Time to tally up the last month of the year in 2019. December I received $1768 in dividends.
The cash was reinvested back into the stocks that paid them. This month had a lot of payers, which illustrates the resiliency of the total income flow from any one company having difficulties paying or raising the dividend.

Ticker      Total    Taxable         401k
JNJ $253.82 $248.00 $5.82
HD $196.51 $157.68 $38.83
NEE $181.01 $136.46 $44.55
MMM $149.31 $122.76 $26.55
D $148.96 $96.69 $52.27
WEC $133.11 $116.84 $16.27
KO $132.28 $132.28
BDX $80.02 $80.02
O $73.26 $73.26
V $71.62 $55.04 $16.58
MCD $60.24 $60.24
ROST $54.77 $54.77
MSFT $50.11 $22.27 $27.84
TJX $49.47 $49.47
BA $45.73 $45.73
CHD $44.41 $29.71 $14.70
HON $43.29 $43.29
INTEREST $0.15
$1,768.07 $1,451.25 $316.67