Saturday, December 4, 2021

Week in Review

While a rough week overall, I'm pleased with the Dividend Town portfolio this week. While down -1.54%, compared to the broader indexes the portfolio performed better than the Nasdaq & S&P 500.  

I believe as the market will continue to take gains on excessive growth valuations and the threat of taping and higher interest rates continue, we'll see a return to value. Notice the spiciness on the charts below?  It's a perfect storm of future risk and past trends pointing towards an unsustainable trajectory. 


So yes, I'm a bit bearish in the short-term, but I do believe that time in the market beats timing the market. In the last month, I've been actively working to rebalance to more quality & value oriented stocks, and since the companies I'm buying are long term purchases I do not care too much about the up and down fluctuations as long as I'm receiving dividend income.

A good week for dividend income this week to help offset some of the losses.

Option activity was not great. My Pfizer $55.00 call was getting a little close so I rolled over to a $60. In retrospect, this was a poor decision as I should have held longer and counted on theta decay as long as it stayed under the strike price. Lesson learned.  

I also closed out a cash-secured put on STOR for $35 strike price for a net loss of -$151. While I need to expand my real estate sector, I'm not sure what the risk is to STOR because of short-term volatility. I'll likely keep the cash on hand and reassess before EX date later this month. 

I've also purchased 1 long put for SPY $455 for June. Breakeven for this is SPY $422.24. Between covid variants, tapering talk, inflated valuations and even some news about Russia potentially invading Ukraine, there's just a ton of risk that makes me uncomfortable.

There were some trades earlier this week to help realign the portfolio towards stocks that rank higher on the Dividend Town screener. Of the 59 stocks held, 39 make the cut on the final screener. There is a pretty good correlation of higher ranked stocks historically driving a lower yield, but also a larger 5-year overall return. Chase the yield or chase the total return?  I've got a 15-20 year horizon so I'll balance the two.

Next week looks like a good dividend week for $289.95. December itself will yield $776.  

For the to-do list:
  • Rebalance a few sectors per DT screener guidelines
  • Publish selection criteria
  • Delineate non-screener selected stocks in the tracker. 
Ultimately making some good progress. If things go well and I'm comfortable with the screener, I may start a weekly newsletter with the data. 

Have a great weekend!

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