Welcome back to Dividend Dollars and our weekly review where we discuss what happened in the market and our portfolio.
This week I was out on vacation but still managed to monitor the market and make some buys. The S&P fell 3.1% this week following more disappointing corporate updates and data that shakes potential economic growth. The Nasdaq was down 3.8% for the week followed by the Dow which was down 2.9%.
Consumer staples and consumer discretionary segments were hit particularly hard this week as many retailers provided cautious outlooks due to cost pressures and supply chain concerns. Walmart (WMT), Target (TGT), and Ross Stores (ROST) were the main players here, expect to see more of this next week as more earnings reports are published. My eyes will be on Best Buy (BBY) who had a particularly rough week following the poor performance of these retailers.
On the other hand, utilities, health care, and energy sectors ended the week green, if only by a little. There was some rebound actions throughout the week pushed mainly by a contrarian approach to our potentially oversold market with a BofA survey showing that cash levels of fund managers are at their highest since 9/11 (6.1%).
The market barely stayed out of bear market territory this week amid growth concerns fueled by stubborn inflation, supply chain issues, and a number of economic data releases that were relatively disappointing.
The Federal Reserve Chair Powell spoke on inflation and said that the Fed will be more aggressive with rate hikes if inflation doesn’t come down in an obvious way. All eyes are on inflation and that will continue to be the driving narrative behind the market’s performance.
It was a tough week and my portfolio was no exception. Let’s dive into the portfolio review now.
Portfolio Value
To date, I have invested $8,980 into the account, the total value of all positions plus any cash on hand is $8,901.17. That’s a mere loss of $78.83 for a total return of -0.88%. The account is down $142.75 for the week which is a 1.58% 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 -12.44% whereas our portfolio has an overall return of -0.88%! 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 more than a 10% difference.
We added $180 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 $9 at a yield of 4.16% and passed the $1 per day milestone with an annual income of $369! 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. Also, with so many positions being down, its hard not to experience a growing dividend yield.
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 first 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 only one dividend. $1.44 from Texas Instruments (TXN)
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: $118.55
Portfolio’s Lifetime Dividends: $141.47
Trades
Below is a breakdown of my trades this week even while on vacation!
- May 16th
- Aflac (AFL) – added 0.5 shares at $55.82
- May 17th
- Microsoft (MSFT) – added 0.1 shares at $265.20
- Texas Instruments (TXN) – added 0.008306 at $173.38 ($1.44 dividend reinvestment)
- May 18th
- Best Buy (BBY) – added 0.25 shares at $74.84
- Bank of America (BAC) – added 0.5 shares at $35.60
- SCHD – added 0.131863 shares at $75.84 (recurring investment)
- XYLD – added 0.223738 shares at $44.70 (recurring investment)
- May 19th
- ETRACS 2xMonthly Pay Leveraged (SMHB) – added 1 share at $9.48
- May 20th
- Best Buy (BBY) – added 0.75 shares at $70.07
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 stay safe!