Welcome back to Dividend Dollars and our weekly review! And boy what a rough week it was!
The S&P is down 2.8% for the week, with most of losses coming after the Fed’s comments released on Thursday. The NASDAQ is down 3.8%, Russel is down 3.2%, and the Dow Jones is down 1.9%.
Last week, it was reported that bullish sentiment among investors was at a 30-year low. Therefore, the mild rally we saw in the first half of this week was contrarian before being corrected on Thursday and Friday.
9 of the 11 S&P sectors made losses this week with communication services, energy, and materials being the biggest losers. Only real estate and consumer staples, both are defensive sectors, made gains.
The week was marked by significant earnings reports in Tesla (TSLA) and Netflix (NFLX). Tesla came in better than expected and experience a small rally, which the latter disappointed and dropped a massive 35% the day after the report which declared a decrease in subscribers.
Important earnings for the week were mostly positive. The problem this week was weakening technicals on the broader market, Fed comments that we haven’t reached peak inflation and reassurance on aggressive rate hikes, and a 10-year Treasury yield quickly pushing for 3%.
Now let’s move on to reviewing our portfolio’s performance for the week.
Portfolio Value
To date, I have invested $8,160 into the account, the total value of all positions plus any cash on hand is $8,495.19. That’s a gain of $335.19 for a total return of 4.11%. The account is down $147.91 for the week which is a 1.71% loss.
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 down -4.12% whereas our portfolio has an overall return of 4.11%! That’s over 8% better than the market! Let’s keep up this good progress with smart adds to the portfolio.
We added $140 in cash to the account this week. The stock purchases made with this will be broken out 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 annual dividend income increased by $16. 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 have started adding to a levered position to raise my beta. I would like to see it in the 0.8s.
Dividends
This week we received two dividends. $1.50 from Realty Income (O) and $1.77 from ETRACS 2x Monthly Leveraged ETN (SMHB).
In my portfolio, all positions have dividend reinvestment enabled. I don’t hold onto the dividend, I don’t try to time the reinvestment, I just let my broker do it automatically. All dividends were reinvested.
Dividends received for 2022: $94.00
Portfolio’s Lifetime Dividends: $116.92
Trades
Below is a breakdown of my trades this week.
This week we made some sales in order to add to other positions with higher conviction. Following the poor Netflix (NFLX) earnings report, I sold my Warner Bros. Discovery (WBD) shares due to concerns about streaming stocks being dragged down. I also sold my Verizon (VZ) position, and rolled that money over to AT&T (T). Communication companies like AT&T, Verizon, and T-Mobile are in such a competitive and necessary industry that investing in them truly is like investing in a utility. I decided that I didn’t need both and that I would roll Verizon into AT&T as I believe there is more growth opportunities there with how leadership seem to be correcting the company’s path.
- April 18th
- Bank of America (BAC) – added 2 shares at $37.36
- UWM Corporation (UWMC) – sold $4 4/29 covered call for $10 premium
- ETRACS 2x ETN (SMHB) – added 1 share at 10.82
- Realty Income (O) – added 0.020411 shares at $73.49 ($1.50 dividend reinvested)
- April 19th
- Verizon (VZ) – sold 4.047797 shares at $53.76
- AT&T (T) – added 10 shares at $19.50
- Atlantica Sustainable Infrastructure (AY) – added 1 share at $32.98
- UWM Corporation (UWMC) – bought call back at $9 premium
- April 20th
- Warner Bros Discovery (WBD) – sold 4 shares at $23.22
- 3M (MMM) – added 0.4 shares at $151.05
- Lowe’s (LOW) – added 0.25 shares at $209.08
- SCHD – added 0.124394 shares at $80.39 (recurring investment)
- XYLD – added 0.203008 shares at $49.26 (recurring investment)
- April 21st
- UWM Corporation (UWMC) – added 2 shares at $3.79
- ETRACS 2x ETN (SMHB) – added 0.157619 shares at $11.23 ($1.77 dividend reinvested)
- April 22nd
- ETRACS 2x ETN (SMHB) – added 1 share at $10.61
- UWM Corporation (UWMC) – added 3 shares at $3.72
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 and have a happy and safe Easter!