Friday, October 26, 2018

September 2018 Portfolio Summary

I wanted to spend some time this post to summarize how my portfolio has reacted in the recent market volatility. It has been a very long time since we got to see stocks get hammered as hard as they have in the last few weeks.

From what I notice, February is usually a down month. Same with September and October periods. We are seeing just that in 2018. The recent drop reminds me of what we experienced back in early 2018. The recent volatility is linked to trade war tensions with China, the rising interest rate problem of the Fed, housing slowdown, auto slowdown, and the unexciting guidance from several companies including the industrials which are quite an important gauge on the economy.

The sectors that got hit very hard recently were cyclicals and technology. We saw industrials, materials, discretionary, and technology companies drop in value. At first the consumer staples and utilities were shelter areas for the declines as they were seen as safer areas during slowdowns. However these two sectors also eventually saw declines as the overall averages continued to drop. In today's markets, stocks seem to sell together as a lot of investors today use index funds which lumps everything in one group. Good stocks and bad stocks all got thrown out the window together. This provides a good opportunity to pick the high quality ones.
My portfolio now is sitting at $525,000. The drop is not as severe for my portfolio so far as I hold a large percentage of non-cyclical businesses such as consumer staples and utilities. I have also been adding cash periodically from my take home income. And the ~$1200 or so dollars a month I get in dividends also help a little.

Although the portfolio value fell, it is interesting to see that the dividend growth graph of my portfolio continues to climb upwards. The fundamental businesses that I hold are still strong and showing an ability to grow on their own. Also, my periodic additions to new shares increases my annual income more and more. So far no dividend cuts. I had two companies, KHC and GIS who had held their dividend instead of increasing them this year. I have decided to keep them as my positions are small in those two.

As a dividend investor I am more concerned with the growth of my income and the safety of that income instead of the dollar value of my net holdings. For me, the dollar value of stocks is important only when I am buying as a lower value stock increases the dividend yield percentage. And right now, stocks are at a much better value than before which makes me interested in potentially adding new shares. At the moment I have around $25,000 in cash and this amount I expect to grow a lot in the next month as I have some unplanned cash income from my vocation happening around November. I hope the market is still at a low in the November period so I can add a lot of shares in dividend paying stocks. This will help elevate my portfolio's dividend income by a lot.

Name Ticker Sector       Value   Weight        Divies      Yield S&P Fin VL Fin VL Safety
Altria Group Inc MO Staples $35,749.78 6.81% $1,813.27 5.0721% A- B+ 2
Johnson & Johnson JNJ Health $34,352.84 6.54% $902.90 2.6283% AAA A++ 1
Philip Morris International Inc PM Staples $31,281.52 5.96% $1,602.74 5.1236% A B++ 2
Visa Inc V Financial $29,619.10 5.64% $215.04 0.7260% A+ A++ 1
Home Depot Inc HD Discret $22,197.97 4.23% $531.01 2.3922% A A++ 1
NextEra Energy Inc NEE Utilities $21,984.82 4.19% $574.56 2.6135% A- A 2
PepsiCo PEP Staples $20,219.90 3.85% $679.18 3.3590% A A++ 1
Becton Dickinson and Co BDX Health $18,335.43 3.49% $240.20 1.3100% BBB A++ 1
Ross Stores Inc ROST Discret $17,769.81 3.38% $165.33 0.9304% A- A 2
Mastercard Inc MA Financial $17,338.46 3.30% $87.79 0.5064% A A++ 1
McCormick & Company MKC Staples $16,761.53 3.19% $251.93 1.5030% BBB A+ 1
3M Co MMM Industrial $16,299.07 3.10% $479.41 2.9413% AA- A++ 1
Realty Income Corp O REIT $15,898.93 3.03% $705.91 4.4400% BBB+ A 2
Clorox Co CLX Staples $12,388.71 2.36% $321.83 2.5978% A- B++ 2
AT&T Inc T Telecom $12,143.89 2.31% $834.92 6.8752% BBB+ A++ 1
Xcel Energy Inc XEL Utilities $12,011.69 2.29% $376.37 3.1334% A- A+ 1
Illinois Tool Works Inc. ITW Industrial $11,116.85 2.12% $358.32 3.2232% A+ A++ 1
Automatic Data Proc, Inc ADP Tech $10,536.84 2.01% $213.29 2.0242% AA A++ 1
Procter & Gamble Co PG Staples $10,228.27 1.95% $333.88 3.2643% AA- A++ 1
WEC Energy Group, Inc. WEC Utilities $9,891.47 1.88% $317.61 3.2109% A- A+ 1
Air Products & Chemicals, Inc APD Materials $9,871.45 1.88% $290.67 2.9445% A A+ 1
The Coca-Cola Co KO Staples $9,685.83 1.84% $329.05 3.3972% AA- A++ 1
TJX Companies Inc TJX Discret $9,576.34 1.82% $70.11 0.7321% A+ A++ 1
Kimberly-Clark KMB Staples $9,432.19 1.80% $368.77 3.9097% A A++ 1
Church & Dwight CHD Staples $8,955.20 1.71% $134.57 1.5027% BBB+ A+ 1
Dominion Resources, Inc D Utilities $8,763.33 1.67% $408.39 4.6602% BBB B++ 2
Microsoft Corporation MSFT Tech $8,711.46 1.66% $149.86 1.7203% AAA A++ 1
Starbucks Corporation SBUX Discret $7,458.43 1.42% $184.95 2.4798% A A++ 1
Stryker Corporation SYK Health $7,113.78 1.35% $83.39 1.1722% A A++ 1
McDonald's Corporation MCD Discret $6,278.32 1.20% $168.06 2.6768% BBB+ A++ 1
Medtronic plc MDT Health $6,113.71 1.16% $136.24 2.2284% A A++ 1
Abbott Laboratories ABT Health $5,849.02 1.11% $97.79 1.6719% BBB A++ 1
Honeywell International Inc. HON Industrial $4,545.86 0.87% $102.10 2.2460% A A++ 1
Colgate-Palmolive Co CL Staples $4,104.66 0.78% $115.74 2.8197% AA- A+ 1
Kraft Heinz Co KHC Staples $3,822.96 0.73% $174.88 4.5746% BBB- A 2
General Dynamics Corporation GD Industrial $3,778.15 0.72% $82.74 2.1900% A+ A++ 1
General Mills, Inc. GIS Staples $3,228.51 0.61% $145.40 4.5037% BBB+ A+ 1
GARRETT MOTION ORD GTX Industrial $43.74 0.01% $0.00 0.0000%
Misc Type ……….. Partial Totals Weight Yr Dividends  Avg Yield …..832 …..9 …..82
Equity Stocks $493,416.09 93.95% $14,048.20 2.8471%
Investable US Dollars $24,944.26 4.75%
Miscellaneous Assets $6,820.00 1.30%
. .. Equity + Misc Weight …..2 ….. …..222 …22 …..223
Total $525,180.35 100.00%

My recommendation in volatile periods like this is to focus on the dividend paying capabilities of the businesses one invests in instead of the dollar value of the business. For me, once I buy a share I do not plan to sell it unless the business cannot support the dividend. The dividend is the whole focus of my investing style as I will be using that passive income for my living. If one is buying, a lower price entry point is much better than a higher price. So the market pullback being experienced recently is a great opportunity for those in the accumulation phase. Instead of panicking like most people are on television and the media, one should be more optimistic and view this period as a sale. Sales are often greeted with delight in the shopping malls, but not so much in wall street.

For those that have a lot of shares already and are not accumulating, I would focus on monitoring the safety of the dividend and whether or not the fundamentals of the businesses have changed drastically. So far, I cannot see how the companies I have invested in have changed so much in the last 2-3 quarters to warrant such a price fluctuation. In periods like this, I plan to exploit the cash positions I have saved up for many months.


  1. Thanks so much for all that information. Looks like a great year so far for you. Still a while to go till the end of the year. Keep up the excellent work. Great stuff.

    1. Hi Young Dividend. Please keep your posts more often. In February I move 20% of my portfolio from bonds or cash to S and P type of companies and today 20% I did the same. I have about 30k in cash and I will deploy it all if we get 20% correction.

  2. Hey YD,

    Looks like you're firing on all cylinders heading into the final leg of the year. Looking forward to seeing how you put the additional November income to work.


  3. YD,

    Wow. Just Wow. Look at the growth, look at the charts, and look where your net worth is trending right now. That's what I am freaking talking about right here :)