Sunday, May 15, 2022

Week in Review

Happy weekend everyone!  A short update this week as I'm nursing myself back to health after being sick for the week.

Performance:  Week over week -.47% compared to S&P at ~ -2.2% and NASDAQ at ~ -2.3%.  With violitlity high all last week and more headwinds coming, I cannot allocate more funds towards growth. I would love to, but I'm not ready yet. As I mentioned earlier this week, I have convinction in my picks but not in the general market at this time. 

Michael Gayed brings up a great point below. With stocks & treasuries down, where does one go for flight to safety?  Who's safe from getting crushed?  When Luna and other crypto ponzi schemes come crashing down, where will the money go?  I'm in agreement that treasuries have to pick up the slack at some point. I've been allocating a portion of the portfolio to $SCHO and moved some more last week ready to deploy into opportunities as I find them.



 Dividends:  When you can lose 2% - 3% of your portfolio any given day, sometimes income feels like a drip into a leaky bucket. Since we're going for the long-term here though, I'm comfortable the dividend growth stocks we've selected will weather the long-term fluctuations and keep adding up over time.

  • $MED - $42.64
  • $MMP - $137.99
  • $COST - $8.10
  • $MAIN - $21.72
  • $O - $28.65
  • $APPL - $11.27
Crossed over $4,500 in total dividends this week which feels great. In about 3 weeks we'll get to $5,000. 

Projected Annual Dividend Income (PADI) is ~$9.6K. Some of this is a function of some higher yield buys like $XYLD, $MMP, $ETO, $VZ, but I'm comfortable with the balance now.

Dividend Increases: Two weeks ago we received another increase in Telus, a Canadian telecom company. 


Options:
Netted $154 mainly trading $SBUX covered calls as they went downhill. Also sold $AFL and $PFE covered call expiring next week <.30 delta. I'm closing my red gap on covered call income and hope to be in the black by July. I am sitting on an $AMC $17 put that expires in July which should have room to grow. 

Sectors: I'm a little overweight on Consumer Discretionary in this enviroment. I don't consider Dollar General 'truly' discretionary if we're looking at a recessionary enviroment and while Lowes and Target may be down, these are comfortable longer term holds.



 I'm disappointed with Williams Sonoma performance. They rank very highly on my screener (23 out of 25 points), and a quick view on Stock Rover shows some great consistent performance. Sales growth, FCF, Gross Margin, Net Margin, all heading the right direction except the stock price. In a recessionary enviroment I'm sure they will not do as well, so I'll need to think about either holding or selling. It feels like the right company at the wrong time. 


Other Trading: Sold my remaining $NVDA shared Friday at a small loss. Fortunately I purchased in October, rode a wave to ~>50% increase and sold some shares at a high so was mainly playing with house money.  As a lifelong gamer I'm very familiar with $NVDA and have been using their products since early 2000's! As interest rates rise and we start seeing more crypto crashes, less drive towards crypto in flight of safety and real assets, NVDA will take a hit. Granted I think it's an awesome long term company, but I think they're still very overvalued.

Next steps: While I keep meaning to rebalance I have had very ltitle free time. If I felt the portfolio was grossly unbalanced I'd find time so for now I'm okay. 

Saturday, April 30, 2022

Week in Review

Glad to make it to the weekend after a brutal week in the market. 

After six months of tracking we're right back where we started! Pretty much dead even. Given what's happened in the market in the last 4-5 months, I'll take it. Starting in January I reallocated the portfolio towards a lower beta (~0.59) and shifted my sector weighting more towards consumer staples, utilities, energy and real estate. 

In some areas I've started a position in sector ETFs where to help balance out areas. Currently I have positions in $XLP (Consumer Defensive) and $XLU (Utilities). Both produce some yield and are sufficiently diversified until I can decide where to allocate towards individual companies.

I've also taken some of the portfolio and shifted to a higher allocation of short term treasury bonds $SCHO. Even as bonds take a hit, I think staying in the shorter term space is a good place to park some cash until I can see my way through the risk.


Unfortunately there is no telling when we can flip the switch from risk-averse to risk-taker. And by risk-taker I mean steer the dividend growth portfolio into a higher beta zone. While I'm not convinced we have seen the bottom yet, it's becoming clear there are some great dividend growth companies out there that are getting cheaper by the day. Great companies like Lowes, Target, Microsoft and Apple are off their 52 week highs. When I'm doing research I'm using SimpleSafeDividends primarily looking for companies that can weather the upcoming risk and continue to return capital. Lowes has done it for 59 years! 

While I won't make any major changes yet, I'll continue to monitor and ensure I'm investing in high quality companies with dividend reinvestment and any covered call income. 

Lowes annual dividends per Share

Dividends:  This week we had $210 worth of dividends.
  • $XLYD - $69.26
  • $CMCSA - $27.00
  • $QQQ - -$4.34
  • $ETO - $77.10
  • $AMT - $40.60
Dividend Increases:  
  • Apple lifts payout by 4.5%, achieving 10th straight year of dividend growth

    Apple announced its next dividend of $0.23 per share, a 4.5% increase over the company's previous payout of $0.22.

    The iconic technology leader has enviable brand loyalty and market positioning, which has allowed the firm to build a fortress of a balance sheet, consistently grow earnings, and maintain a conservative payout ratio.

    Increased annual income $1.96. (Big money!)

Options:
  • Bought some $54.00 $KR calls at close of business Friday hoping to capitalize on a bounce Monday. 
Next Steps:
  • I need to revisit the quarterly rebalancing but I'm not in a big hurry as I'm overall happy with things. Need to take a few profits on energy & utilities and take some consumer discretionary ($WSM) off the table and likely allocate towards more Consumer Staples. Not sure yet.  
Have a great weekend everyone!