Saturday, July 18, 2020

My portfolio crossed $900,000 USD

Apologies to readers and followers, my blog has been rather dead on portfolio updates in the last few months. The blog has only been posting my dividend income and buys, I have been very pre-occupied with my vocation and my investing research that I have not had a time to sit down and write.

Now it is mid July, the year 2020 started off normal but then became a roller coaster ride after the outbreak of the Wuhan Coronavirus spread throughout the globe. My portfolio became a "V" shape, and actually I was expecting a "W" shape to happen as well, but that second drop down has yet to happen.

The portfolio from the peak in early 2020 was around $860K and it fell all the way to $630K when everyone was shouting the end of the world, this was the depths of despair. On Friday 7/17/2020, the day when the majority of assets I owned had a run up, largely consumer staples and utilities and healthcare and some fintech, my portfolio crossed the $900K threshold level and ended the week around $903K. Moving from $630K to $900K (large majority being just market movement in paper values of equities) was surely a roller coaster ride. I stayed the course and held the companies that I had owned for many years.

In addition to my portfolio's paper asset value, the income generated by the portfolio's positions per year is now over $23,000 USD a year. So both portfolio net worth and income produced are moving up steadily as planned, to our $1 million dollar net worth target.

ROSS and TJX, both retailers with good track records before, cut their dividends which is unfortunate. However I decided to keep them as their yields were originally very low and I feel they can come back after they can open their stores back to operating capacity. So far these are the only two companies that had cut their dividends. I have also recently added positions to Costco, as seen below.

Name Ticker Sector       Value   Weight        Divies      Yield SP Fin VL Fin VL Safety
Visa Inc V Financial $52,852.51 5.85% $325.10 0.6151% AA- A++ 1
NextEra Energy Inc NEE Utilities $41,710.93 4.62% $848.21 2.0336% A- A+ 1
Clorox Co CLX Staples $41,604.62 4.61% $772.41 1.8566% A- B++ 2
Johnson & Johnson JNJ Health $40,720.47 4.51% $1,101.51 2.7051% AAA A++ 1
Home Depot Inc HD Discret $38,394.52 4.25% $884.73 2.3043% A A++ 1
Altria Group Inc MO Staples $35,253.67 3.90% $2,851.52 8.0886% BBB B++ 2
PepsiCo PEP Staples $32,762.55 3.63% $995.09 3.0373% A+ A++ 1
Philip Morris International Inc PM Staples $32,122.77 3.56% $2,003.66 6.2375% A B++ 3
Realty Income Corp O REIT $30,991.97 3.43% $1,478.98 4.7721% A- A 2
Air Products & Chemicals, Inc APD Materials $30,527.49 3.38% $556.56 1.8231% A A+ 1
Mastercard Inc MA Financial $28,857.45 3.20% $151.85 0.5262% A+ A++ 1
Becton Dickinson and Co BDX Health $27,311.52 3.03% $323.26 1.1836% BBB A++ 1
Microsoft Corporation MSFT Tech $26,835.08 2.97% $269.83 1.0055% AAA A++ 1
Automatic Data Proc, Inc ADP Tech $25,414.59 2.81% $626.76 2.4661% AA A++ 1
Xcel Energy Inc XEL Utilities $25,348.95 2.81% $656.73 2.5908% A- A+ 1
McCormick & Company MKC Staples $24,719.93 2.74% $321.16 1.2992% BBB A+ 1
Kimberly-Clark KMB Staples $23,911.77 2.65% $708.89 2.9646% A A++ 1
Procter & Gamble Co PG Staples $22,010.68 2.44% $554.13 2.5176% AA- A++ 1
Illinois Tool Works Inc. ITW Industrial $21,760.65 2.41% $511.51 2.3506% A+ A++ 1
WEC Energy Group, Inc. WEC Utilities $21,839.09 2.42% $610.33 2.7947% A- A+ 1
Abbott Laboratories ABT Health $21,285.17 2.36% $308.82 1.4509% A- A++ 1
3M Co MMM Industrial $19,136.81 2.12% $704.03 3.6789% A+ A++ 1
AT&T Inc T Telecom $18,770.98 2.08% $1,290.70 6.8760% BBB A++ 1
Ross Stores Inc ROST Discret $18,529.82 2.05% $0.00 0.0000% A- A+ 2
Stryker Corporation SYK Health $18,614.65 2.06% $221.78 1.1914% A- A++ 1
The Coca-Cola Co KO Staples $18,387.95 2.04% $644.09 3.5028% A+ A++ 1
General Mills, Inc. GIS Staples $18,175.79 2.01% $551.12 3.0322% BBB A 1
Church & Dwight CHD Staples $17,831.58 1.98% $201.70 1.1311% BBB+ A+ 1
Colgate-Palmolive Co CL Staples $15,362.71 1.70% $359.55 2.3404% AA- A+ 1
Starbucks Corporation SBUX Discret $14,267.46 1.58% $315.52 2.2114% BBB+ A++ 1
Dominion Energy, Inc. D Utilities $13,689.59 1.52% $655.04 4.7849% BBB+ B++ 2
General Dynamics Corporation GD Industrial $13,575.89 1.50% $401.14 2.9548% A A++ 1
TJX Companies Inc TJX Discret $11,468.23 1.27% $0.00 0.0000% A+ A++ 1
Honeywell International Inc. HON Industrial $10,530.92 1.17% $244.59 2.3226% A A++ 1
Medtronic plc MDT Health $10,339.47 1.15% $243.33 2.3534% A A++ 1
McDonald's Corporation MCD Discret $10,194.55 1.13% $266.20 2.6112% BBB+ A++ 1
Costco Wholesale Corporation COST Staples $7,470.17 0.83% $64.40 0.8621%
Misc Type ……….. Partial Totals Weight Yr Dividends  Avg Yield …..832 …..9 …..82
Equity Stocks $882,582.98 97.76% $23,024.23 2.6087%
Investable US Dollars $15,300.71 1.69%
Miscellaneous Assets $4,962.50 0.55% $100.00
. .. Equity + Misc Weight …..2 ….. …..222 …22 …..223
Total $902,846.19 100.00% $23,124.23

The portfolio's king position is Visa, it has held the #1 spot for a long time, largely due to its ability to continue performing so well by itself without myself needing to add more. Recently, Next Era Energy and also very impressively Clorox have climbed to very high positions in my portfolio. NEE is a utility company and I have been investing in it for many years, most of its net worth today is from its own impressive track record.

Previously Altria was the number one consumer staples, since I had bought so many shares and since their dividends are so high which allows itself to buy even more shares. Now it is Clorox. Tobacco has lagged the general market so their returns have not been impressive. As a result, PM and MO have both sat around the $30,000 net worth area for many years. I still hold onto Tobacco for their income generating capabilities which I highly value.

Despite Coronavirus, other companies that have performed well  in my portfolio include McCormick (spices for cooking), Abbott Labs (healthcare), Air Products and Chemicals (materials and chemicals), Church and Dwight (baking soda and consumer staples), Procter and Gamble (soap and consumer staples), and Home Depot (home improvement retailer). These are all well known blue chips with reputable dividend track records and established markets for decades, these are not some high flying tech stock or innovative bio-tech that just started with an IPO. The graphs here show boring does not necessarily mean boring performance. Note (many investors do not realize this as they only focus on prices), the graphs here are all just share value graphs; with dividends reinvested (and many of these pay sizable dividends), the total returns and net worth of the positions will be even more spectacular than just comparing with the share price values.

Note there is nothing surprising about a lot of the names above. It is actually very "boring" investing. I am also not an amazing stock picker. These companies are also now all sizable positions in my portfolio, they all started off very small, dripping a few shares occasionally bit by bit. Nearly all of these positions grew by themselves to the size they are today, not with constant additions by myself. 

All the companies above are high quality and can weather difficult periods like the current COVID-19, and the majority are dividend aristocrats or have respectable dividend histories showing their ability to survive through past economic disasters. A lot of these companies are also considered "boring", they include utility companies, baking soda companies, soap and toothpaste companies, or bleach companies. There is nothing exciting or severely innovative about these nor do people talk about them everyday on CNBC, but they get the job done and they provide products and services we all need even if we're all work from home or stuck at home due to Coronavirus. And more importantly, they provide a consistent and increasing dividend payment to my brokerage account quarter after quarter.

I never sold any share in the above companies. My policy is to do the research and only invest in durable companies with strong dividend track records. And then to hold onto them and to add to them over time steadily without trying to time the market.

Right now, the portfolio sits above $900K USD, this is all net values as I have no debt. Of course selling some may incur taxes so the actual real value is a bit less. I have no doubt it may dip below this $900K level in the short term given the volatile uncertain market environment we are in, but in the long run I believe the $1,000,000 target is just right next door now.

In the last 7 to 8 years, the portfolio is increasing at a rate that was in line with my original investing forecast plan I set out almost a decade ago when I was a young college graduate with nothing to my name looking to acquire my first million. At that time, when I just graduated, I set my budget and monitored my free cash flow, so I can invest as much of my take home income as I could. My "net operating margins" I called it, or my "retained earnings", were a very high rate relative to my take home income. Since I knew what I was spending and earning down to the dollar, I was able to invest consistently and saw the assets and passive income grow over the years.

Right now the portfolio is doing a lot of the heavy lifting instead of just relying on my periodic contributions month by month, and I believe while I am still 30 years old, I can hit or get pretty close to the $1,000,000 USD mark. The $1M mark is actually much harder to hit if one is starting from scratch, this is because relying just on take home income will be very challenging as the government takes a large chunk of one's salary as taxable income, and then one has to also spend money to pay for housing and survival expenses and discretionary spending. As a result, getting paid $1 does not mean you can invest $1. If one wins the lottery and gets a $1M prize, that winner will not also be a millionaire as that $1M will basically become $500,000 after taxes. So to become a millionaire from ground zero, one really need to win a $2M lottery...

Even with past fears such as the slowing of China, to the oil price crisis with OPEC, to Trump's China USA trade war, and more recently to fears of Coronavirus shutting countries down, and now fears of a new "work from home" model, I have kept investing in market lows and market highs and had not sold on panic. I am sure a new "recession trigger" will come in the coming months, however businesses will adapt and will live on and so will my portfolio.


  1. Congrats on your progress, the one million mark is just around the corner. It's been great to follow your process over time. Are you going to be keeping D? I believe they recently announced a dividend cut. Keep up the great work!

    1. Dominion is on consideration for selling. The stock has held up well to COVID. I am considering swapping it for higher yield % stocks in my portfolio to offset the loss in the income. Still deciding on this action.

  2. Congrats on being diligent enough to saving and thinking about your retirement goals this early on in your life. I am about to cross the $1M mark soon enough as well and am surprised to see the portfolio bounce back up so quickly. I have a mix of growth non-divi paying stocks as well as dividend paying names. So my income generation is currently not on par with yours.

  3. Congrats and thanks for sharing. How do choose whom you need to add to. I am sure its some form of their valuation compared to others and your position size etc. However, would like to see if you have a specific process to narrow down you buys on every iteration. Thanks.

    1. I already have defined a set of companies I like, and I add to them when either their valuation is reasonable, or I want to increase their weighting relative to my portfolio size. I do not try to time the market so I dollar cost average periodically. I focus on investing in good businesses that have consistent revenue and earnings and as a result consistent dividends. I prefer businesses that are not cyclical and are more predictable. And lastly I like businesses that have low debt and have the ability to move through difficult periods without defaulting on their obligations.

  4. Just ran across your blog, this is fantastic progress! Appreciate the detailed update and excited to follow your journey.