Welcome back to Dividend Dollars and our weekly review!
What a week it was for the market! The S&P went on a tear, with a four-day win streak that rallied 6.2% for the week. The other major indexes were up of 5% as well. 10 of the 11 S&P sectors made gains, energy was the only sector to fall.
Overall, there was no single event that caused the rally, instead it was a combination of a lot of factors and good news that created an amazing week. The fed chair reaffirmed confidence in the economy, ceasefire talks are showing progress, and oil prices fell over 5%. Now, this is all relatively good news, but perspective is still important here as the Fed did state that growth rates in 2023 and 2024 could suffer, Russia has continued bombing, and oil still is above $100 per barrel. Inflation is still high as well as shown by the PPI reading this month.
The market is seeing a light at the end of the tunnel in a couple of aspects and bounce was about due. Let’s see if it keeps up this next week! Moving on to our performance now.
Portfolio Value
Last week our portfolio mad gains, but not nearly as well as the rest of the market. With my portfolio’s low beta, this is to be expected. Also, this tends to be the nature of a dividend account. In order to raise my beta a tad and take advantage of holding riskier assets long term, I decided to play with a leveraged position this week. More on that down below.
To date, I have invested $7,420 into the account, the total value of all positions plus any cash on hand is $7,859.55. That’s a gain of $439.55 for a total return of 5.92%. The account is up $181.10 for the week which is a 2.36% gain.
We started building this portfolio on 9/24/2021 and when compared to the S&P 500 we are outperforming the market so far! Within that same timeframe, the S&P 500 is up 0.17% whereas our portfolio has an overall return of 5.92%! Let’s keep up this good progress with smart adds to the portfolio.
We added $230 to the account this week. My buys are detailed below.
Portfolio
Above is a dashboard of the portfolio that tracks annual dividend income, yield, beta, dividend growth, and more.
Below is a table of everything we are invested in so far. There you can see my number of shares, shares bought through dividend reinvestments, average cost, gains, and more. The tickers in green are positions that I bought shares in this week.
This week our activity raised our annual dividend income by $11. Our dividend yield decreased by 0.1% and our beta dropped 0.03. My portfolio’s dividend yield may be just slightly higher than what you will see in other portfolios, however that is strategic per my time horizon. I am in my 20s and am just starting off this investment journey, so a higher dividend yield gives me greater cash flow now to reinvest which helps me realize the benefits of compounding sooner.
Our beta usually hovers right around the mid 0.6s which is good, especially in times of uneasiness. It means my portfolio won’t dip as much as the rest of the market on red days, however, it does go the other way around and I won’t have as much green on the good days. Therefore, it is good to watch your beta in terms of cyclicity. View the chart above to see the performance of my portfolio versus the S&P 500, notice how my portfolio’s green days are not as substantial as the S&P’s but neither are my red days, that is beta at work. My beta so far has led to better returns than the market since beginning this portfolio, however, on rally weeks I underperform. In order to combat that, I am going to start adding to a levered position to raise my beta. I would like to see it in the 0.8s.
Dividends
This week we received dividends from 4 positions: $0.96 from WBA, $3.59 from MMM, $1.28 from NEE, and $1.05 from O
Dividends received for 2022: $57.27
Portfolio’s Lifetime Dividends: $80.19
Trades
This week we made some flubs with selling covered calls on UWMC and added a new levered position to our account. As I start to learn more about using options to boost cashflow, I will start to include charts/tables in this trade section so that we can start to track option gains individually.
Here’s the breakdown of the trades I made this week:
- March 14th
- SBUX – added 0.3 shares at $79.77
- INTC – added 0.5 shares at $44.76
- APD – added 0.2 shares at $217.40
- UWMC – closed $5.5 covered call from two weeks ago for a $2 gain
- MMM – dividend of $3.59 reinvested
- March 15th
- UWMC – opened and closed a $5 3/25 covered call for a $1 gain
- UWMC – opened a $4 3/18 covered call for $13 premium
- NEE – dividend of $1.28 reinvested
- O – dividend of $1.05 reinvested
- March 16th
- UWMC – closed $4 position for a $27 loss
- HD – added 0.2 shares at $332.35
- XYLD – added 0.207011 shares at $48.31 (recurring investment)
- SCHD – added 0.129183 shares at $77.41 (recurring investment)
- March 17th
- SMHB – bought 2 shares at $11.31 (new position)
- UWMC – opened a $5 3/18 covered call for $2 premium
- March 18th
- SMHB – added 0.5 shares at 11.24
- UWMC – covered call position expired for $2 gain
Summary
That is it for the update this week. Let’s kill it next week. Stay patient and be ready to buy income producing assets at a discount!
Let me know what you think of the progress so far, share with me your progress and questions, interact with me on twitter and Instagram using the links below!
Thank you for reading! See you next week!