Welcome back to Dividend Dollars and our weekly review where we discuss what happened in the market and our portfolio.
This week the downtrend continued in the markets with each of the major indices falling more than 2.0% this week. 10 of the 11 S&P sectors closed lower with 5 of them falling more than 3% (IT, consumer discretionary, financials, and real estate). Consumer staples, one of the more defensive sector, ended with a 0.3%.
Inflation readings remained high, but a better than expected core PPI reading for April revived “peak inflation” talks. The Fed is expected to remain aggressive on tightening plans to continue the fight against inflation.
High growth story stocks like Unity (U), Coinbase (COIN), and Peloton (PTON) continued to disappoint this week. This week the stable coin TerraUSD (UST) collapsed. Billions of dollars in crypto wealth were lost, shocking the whole market. UST was designed to retain a value of one US dollar at all timed but was depegged and fell to around 14 cents at the worst.
Growth concerns in the stock and crypto market, peak inflation hopes, and a general flight to safety drew Treasury yields lower this week.
Sentiment was further pressured by the S&P breaking below 4,000 briefly, Apple (AAPL) losing its title as the world’s most valuable company, and heightened volatility driven by selling. That was until a rally occurred on Friday to end the week with a much overdue bounce.
Overall, it was another tough week. However, amid this volatility, dividend stocks continue to show resilience. Let’s dive into it!
To date, I have invested $8,800 into the account, the total value of all positions plus any cash on hand is $8,881.09. That’s a mere gain of $81.09 for a total return of 0.92%. The account is down $45.13 for the week which is a 0.51% 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 -9.69% whereas our portfolio has an overall return of 0.92%! 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 $190 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 $13 at a yield of 4.07%. 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. $1.62 from Air Products & Chemicals (APD) and $1.50 from Reality Income (O)
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: $117.11
Portfolio’s Lifetime Dividends: $140.03
Below is a breakdown of my trades this week.
- May 9th
- Bank of America (BAC) – added 0.5 shares at $36.58
- Starbucks (SBUX) – added 0.15 shares at $75.27
- Atlantica Sustainable Infrastructure (AY) – added 0.5 shares at $29.96
- ETRACS 2xMonthly Pay Leveraged (SMHB) – added 1 share at $9.48
- Air Products & Chemicals (APD) – added 0.006881 shares at $235.43 ($1.62 dividend reinvested)
- May 10th
- ETRACS 2xMonthly Pay Leveraged (SMHB) – added 1 share at $9.03
- May 11th
- SCHD – added 0.132714 shares at $75.35 (recurring investment)
- XYLD – added 0.223002 shares at $44.84 (recurring investment)
- ETRACS 2xMonthly Pay Leveraged (SMHB) – added 1 share at $9.10
- May 12th
- ETRACS 2xMonthly Pay Leveraged (SMHB) – added 1 share at $8.90
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!