Welcome back to Dividend Dollars and our weekly review where we discuss what happened in the market and our portfolio.
The first week of May was a volatile one that ended in losses for the major averages. The NASDAQ had the worst of it with a 1.5% loss followed by 0.3% from the Dow Jones and 0.2% from the S&P.
The week started with some minor gains and then selling slapped the S&P down to its lowest level in almost a year. The market then bounced back from that weak start and made gains for the next two days. The rally really gained steam on Wednesday following the FOMC meeting where a 50-basis point rate hike was announced. Fed Chair Powell confirmed that a 75 point hike is not being considered which may have been the catalyst for the midweek rally. The S&P had made over a 3% gain on Wednesday.
By the end of the trading day on Thursday, those gains and more were lost. Friday was also weak and did not show much improvement even after the April jobs report beat expectations. Earnings season continued this week, but even the good headlines from notable reports still spurred selling due to market headwinds/concerns.
The last month was rough, and my portfolio was not immune from it! However, this week we ended green while the market ended red. This was a better start to the month of May than most! While some stocks were down, we made strategic buys to grow positions and dividends this week. Let’s dive into it!
To date, I have invested $8,610 into the account, the total value of all positions plus any cash on hand is $8,814.78. That’s a gain of mere gain of $204.78 for a total return of 2.38%. The account is up $164.70 for the week which is a 1.90% gain. This week we made back more than half of the losses from last week.
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 -7.45% whereas our portfolio has an overall return of 2.38%! It’s tough seeing the portfolio come down from highs just a few weeks ago, but it is good that we are still beating the market by nearly a 10% difference.
We added $182 in cash to the account this week. The stock purchases made with this will be broken out below.
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 $7 at a yield of 3.94%.For my portfolio, its 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.
This week we received two dividends. $6.17 from AT&T (T) and $2.59 from Verizon (VZ).
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: $113.99
Portfolio’s Lifetime Dividends: $136.91
Below is a breakdown of my trades this week.
- May 2nd
- Aflac (AFL) – added 1 share at $57.18
- AT&T (T) – added 0.320519 shares at $19.25 ($6.17 dividend reinvested)
- May 3rd
- Starbucks (SBUX) – added 0.25 shares at $73.80
- May 4th
- Intel (INTC) – added 0.5 shares at $45.04
- SCHD – added 0.129943 shares at $76.96 (recurring investment)
- XYLD – added 0.21198 shares at $47.17 (recurring investment)
- May 5th
- Intel (INTC) – added 0.5 shares at $45.70
- Starbucks (SBUX) – added 0.25 shares at $78.24
- May 6th
- Starbucks (SBUX) – added 0.1 shares at $76.90
- Texas Instruments (TXN) – added 0.14 shares at $169.29
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 stay safe!