While overall a disastrous week in the market, the Dividend Town portfolio is functioning as designed. When I built the portfolio one of the things that I'm KEENLY aware of is exposure to risk. As the back half of 2021 was wrapping up I saw nothing but risk in the marketplace.
- Real inflation
- In my 9-5, I have seen the inflation risk first hand. From product shortages, higher input costs, and sky-high freight costs, higher interest rates were always an outcome.
- Sky high evaluations
- Everything feels reminiscent of the early 2000's where any idea is met with wild evaluations. No income? No problem! I love great ideas as much as the next person, but profit (or future profit) drives stock prices, not hope.
- Relentless pumping of crypto and NFTs
- Love the concept of decentralized finance, but not ready for prime time yet.
- I'll agree there's utility in NFTs, but 99.9% of what I see is based off greater fool theory.
I've been on this merry-go-round twice, in the early dot.com era and real estate bubble era and I know where this goes. This time I'm in control of the finances instead of fund managers or blind indexing.
While I'm still heavy in tech, it's nowhere near the weighting of the S&P and Nasdaq. Invesco QQQ sector weighting for the Nasdaq weightings. After the run up of the last two years, I really don't want the risk associated with that heavy of a tech weighting.
As a result, the portfolio only lost 4.4% this week compared to the NASDAQ at 7.6% and the S&P 500 at 5.7%. While there may be more of a drop to go, I believe there will be a return to value and other unloved sectors this year that should benefit the weighting over time.
Dividends this week ($134):
- CTRE - $26.50
- SRE - $34.10
- STOR - $38.50
- POR - $35.26
- I neglected to mention on Jan 14th BlackRock hiking their dividend 18% from $4.13 to $4.88 a share. This increased annual income by $15.
Purchases, deployed some of the cash from cleanup a few weeks ago:
- Added 18 shares to ($POR) Portland General Electric Company, yielding 3.28%.
- Added 39 shares to ($BKH) Black Hills Corp, yielding 3.56%.
- Added 35 shares to ($AFL) Aflac, yielding 2.63%.
- All purchases pushed up holdings to at least 100 shares unlocking the ability for additional income via covered calls.
- Holding an AMC $17 put expiring in July.
- Verizon iron butterfly expiring next week looks like it might be in the money. Need to finish between $50.33 and $53.67.
- Sold one put for Comcast at $50 expiring 01/28. Happy to hold this one to balance out my communications sector which is underweight.
- Flipped some Nike puts for $93.
- Flipped some Peloton puts for $106.
- Added a dashboard page showing how I track progress.
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