Portfolio Update and Housing Plans

It is the holiday season, and year end. I decided to write a portfolio update and what is happening from my side as I haven't been writing as much as I wanted to this year. I wish everyone a happy holidays and it is a time to appreciate what we have and celebrate.

In the last few months, as same as before, I have not purchased any new stock except for my dividend reinvestment. In December, I have turned dividend reinvestment off, and am now holding the cash. I have also sold some stock (temporarily) to raise cash for housing down payment. I do have to pay a capital gains tax on this, as many of these positions were held for years, over 95% of the proceeds sold are long term gains, so the tax rate will be 15%.

Currently, my cash position is a bit over $320,000 USD. I have sold a bit over $200,000 USD in stock and still own around $955K in stocks. I tried to sell positions that had lesser capital gains and still keep the positions that had huge capital gains to avoid taxes. A lot of this $200K had capital gains, in total there is around $27K of capital gains. I felt selling some overvalued stock to fund a house, at stock all time high levels, is not too bad of a decision; I still hold a lot of stock still so I am still in the market. My total asset position is still around $1.31M USD, so this cash position is around 25% of my portfolio now. I don't think it's a terrible idea to hold a lot of cash at market highs. 

At the moment, I have gotten Pre-Approval from lenders for a mortgage, but due to the limited inventory in winter it's likely that I will have wait until some time in Spring and Summer when I have a better chance to find a home to live in. I have currently sent offers on 3 homes but the seller did not take the offer. For me, I am in no rush to get a house and overpay to get in quicker, I will take my time to find something I like and of good value. My plans for a home are to own it for the long term, at least 20 years, and I believe with an average 3% appreciation rate per year, and a 20% down payment (5 to 1 leverage ratio), the returns on a home can also be decent low double digit percentage over 20 years.

The following are shares that were sold, some were partial positions sold, some had all positions sold.
- Dominion Energy
- AT&T 
- Colgate Palmolive
- 3M Company
- Kimberly Clark
- Johnson and Johnson
- General Dynamics
- General Mills
- Altria
- Philip Morris
- Honeywell
- Coca Cola
- Medtronic

Although right now the housing market is very heated, my rationale is most of my asset and net worth were in stocks, and stocks have also run up a lot, and I am looking to trade one over-valued asset to another over-valued asset to diversify. Both stocks and housing are over-valued, as are many other asset types. The low interest rate and large money supply have increased demand for all forms of assets. If I were holding cash for many years, I would feel worse if I were buying a house now as my effective buying power is less. But since I had most of my money in stocks over the years, I can now diversify my assets from all stocks to now some stock and some housing. The benefit also, is with housing, I can live inside it and also perform reductions in my taxes. 

Portfolio Update - happy Thanksgiving

It has been a long time since I sat down and wrote about my portfolio. Life has become more busy and I let my portfolio go on auto-pilot in 2021. My workload has increased as I have been promoted to larger responsibilities, and spend most of my time traveling meeting new business opportunities. Right now, I do not have as close of a detail view of the stock markets but have been following at a high level. The promotion allows for more income, but I have not been continuously investing like my younger years, I just hold the cash now. 

Some takeaways I see from the overall market are:

• All assets are very inflated, too much money chasing too few deals.
• The COVID 19 stimulus and cash injection into the market and public hands has increased prices for everything.
• Inflation is high. Cost of raw materials and living going up significantly.
• There is a lack of labor or shortage of supply, increasing backlog and artificially inflating demand.
• Dividends are very low yield, due to high money supply and low interest rates.
• COVID 19 changed the way businesses work and do business with people, entire sectors of the industry are changed forever for the better or for the worse.
• Increased demand for technology and any industry that supports the social distancing lifestyle and stay at home economy.
• Decreased demand for discretionary type businesses such as restaurant and bar, travel and hotel, leisure, entertainment like movie theaters or amusement parks.
• Decreased demand for office realty and large movement of people away from mega-cities to 2nd tier cities, creating price fluctuations (up and down, depending on region) on housing compared to pre-COVID period.

The overall effect of COVID 19 and the stimulus on my portfolio has been, overall, positive as basically all my stock prices have gone up. However, this presents a challenge as I have seen on companies worth purchasing during the last year. My portfolio is more defensive and less weighted in technology stocks, as a result my overall portfolio has had less capital gains than the S&P or Nasdaq indices. To me that is fine, as overall it is still going up and paying solid dividends. If a correction or recession occurs, my portfolio will suffer less of a serious percentage loss than the broader market.

I have actually kept all my cash position idle, and have not done anything with it except reinvesting dividends in the stocks that paid the dividends. The cash is unfortunately sitting in a low interest rate bank account, and not getting much return. The high interest rate savings account I see are now 0.50%, compared to rates above 1.0% several years ago when I used to use them, the interest rate has been going down across the board over the years which really makes it challenging to hold cash as there is no return for this asset and inflation is so high now.

The reason I am holding so much cash, it is around $120,000 USD as of this writing, is because I am looking to purchase a home. That cash will be used to start a mortgage. I am looking to finally settle down somewhere and have been looking at various cities across the United States where I can live in. My work does not require me to be in a particular city permanently, I can remote work. Most of my work is spent traveling from place to place as my work is distributed around the world and is international, which is something I like as it provides flexibility and choice. I also do not like to live in high cost of living cities and prefer a remote place or quiet location to live.

March to June 2021 Dividends & Portfolio Update

I have not been able to write as much as I hoped to on my blog. I summarize the dividends I received in the last 4 months since I last published anything. Work responsibilities have been increasing as I am given new responsibilities, which has caused me to have less time to publish. I have not been able to invest much recently as I feel the market is over-valued. As a result, I just reinvest the dividends I receive but keep the remainder cash from my vocational income as a rainy day fund. Currently my cash is around $73K USD.

Dividends continue to track upwards, there were a few special dividends received in earlier months this year so there is a slight downward movement in the 3 month moving average. But overall, it is growing upwards. Dividends going forward will be growing slower as I have not been investing any of my cash positions.

February 2021 Dividends Received

This is a late post. February dividends are the following. The dividends keep on moving like clockwork.

Ticker	Total	Taxable	401k
GIS	$346.04	$304.81	$41.23
T	$340.34	$339.78	$0.56
PG	$253.25	$240.77	$12.48
CLX	$222.09	$222.09
CL	$185.46	$172.08	$13.38
O	$167.23		$167.23
APD	$140.38	$140.38
GD	$128.24	$128.24
ABT	$110.67	$110.67
MA	$40.83	$40.83
COST	$34.55	$34.55
INTEREST	$0.00
	$1,969.08	$1,734.20	$234.88

The graph of the trend is shown below. The dividends have spiked up recently and it's not because the portfolio is growing very heavily. In January there was a one time special dividend from Costco. In February, I received a lot more income from PG and CL and GIS because I moved positions from PM and MO into those three during tax loss harvesting, and then transferred the amounts back to PM and MO after the 30 day period was over. March is almost coming up, I will post a March dividend update when March is over.

December 2020 & January 2021 Dividends Received

I forgot to post the dividend report for December, and since January has also passed I will post both results in here.

December 2020 Dividends Received: Ticker Total Taxable 401k COST $480.89 $480.89 JNJ $287.33 $280.97 $6.36 HD $232.88 $204.02 $28.86 NEE $212.86 $161.95 $50.91 MMM $211.48 $183.36 $28.12 KO $178.89 $178.89 WEC $153.61 $135.69 $17.92 O $151.82 $151.82 MSFT $111.76 $80.83 $30.93 D $111.08 $73.45 $37.63 V $86.81 $69.02 $17.79 BDX $85.20 $85.20 MCD $69.07 $69.07 HON $63.52 $63.52 CHD $56.56 $40.86 $15.70 INTEREST $2.31 $2.31 $2,496.07 $2,110.03 $386.04 In December, Costco had a special dividend and that boosted the December dividends received more than what I planned.

January 2021 Dividends Received: Ticker Total Taxable 401k MO $745.22 $678.47 $66.75 PM $521.54 $459.10 $62.44 PEP $273.11 $236.51 $36.60 KMB $233.08 $186.78 $46.30 XEL $178.70 $178.70 O $165.86 $165.86 ADP $161.16 $161.16 ITW $137.00 $111.96 $25.04 MKC $105.51 $76.25 $29.26 MDT $61.46 $61.46 SYK $61.09 $55.31 $5.78 INTEREST $0.04 $0.02 $0.02 $2,643.77 $2,205.72 $438.05 January was a strong month with total dividends over $2600 USD.

Both January and December had good results, and the dividends received trend continues to push higher. I have not invested a lot of cash recently as I am debating about allocating funds for a down payment for a property. This is to diversify my assets to include real estate in addition to just stocks. Since I have stopped adding shares besides the dividend reinvestment, my dividend growth this year likely will slow compared to previous years.

I am finding it more challenging to find dividend companies at good valuations with good dividend yields in today's market environment, putting cash to work now when the market is very high is not a big urgency right now for me as I already have over a million in stocks. I can sit and wait, have a lot of cash, and if the market rises more then great since I already have a million dollars sitting in stocks to benefit. Spending my cash to get a few more tens of thousands of dollars in equities urgently now is not going to change my returns dramatically.