Welcome back to Dividend Dollars and our weekly review where we discuss what happened in the market and our portfolio.
This week the S&P 500 broke a seven-week losing streak. Last Friday the S&P hit its lowest level since March of 2021, only to rally back a strong 6.6% this week. The NASDAQ did better with a gain of 6.8% while the DOW was at 6.2%.
All eleven sectors of the S&P finished positive with consumer discretionary leading the way with a 9.2% performance to follow its rather disappointing performance last month. The sector still down over 5% for the month of May, largely due to the terrible showing of large retailers being shocked by inflation and supply chain concerns. However, the second half of this past week saw renewed gumption from the retailers with hopes that the worst is behind us. This is evident if the performances of Best Buy (BBY), Costco (COST), Target (TGT), and Walmart (WMT) with respective gains of 16.7%, 12.2%, 8.3%, and 7.7% for the week.
Mega caps also did some work with Apple (AAPL), NVIDIA (NVDA), and Tesla (TSLA) contributing to the rally with similar gains.
Through this rally, the energy sector continues to show strength and is up to almost 17% gains for the month of May. Crude oil is back to its high prices for the month.
Treasuries continued their gains for the third consecutive week this week, drawing some strength from speculation that the Fed could pause its rate hikes in September.
Overall, this was a great week! We saw some volatility in the first two days, but the market rallied strongly after the S&P managed to stay above last week’s lows. Let’s dive into the portfolio review!
To date, I have invested $9,100 into the account, the total value of all positions plus any cash on hand is $9,531.06. That’s a total gain of 4.74%. The account is $448.18 for the week which is a 4.93% gain, after briefly being in the negative territory 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 -6.7% whereas our portfolio has an overall return of 4.8%! I love tracking my portfolio against a benchmark like the S&P. The above chart comes from Sharesight which makes portfolio and dividend management a breeze!
We added $120 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 $5 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. Also, with so many positions being down, it’s 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. 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. $1.84 from ETRACS levered dividend ETN (SMHB) and $2.45 from Starbucks (SBUX).
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: $122.84
Portfolio’s Lifetime Dividends: $145.76
Below is a breakdown of my trades this week even while on vacation!
- May 23rd
- ETRACS 2xMonthly Pay Leveraged (SMHB) – added 0.18918 shares ($1.84 dividend reinvested)
- May 24th
- Bank of America (BAC) – added 0.5 shares at $35.50
- Lowe’s (LOW) – added 0.1 shares at $183.80
- May 25th
- SCHD – added 0.131113 shares at $76.27 (recurring investment)
- XYLD – added 0.22901 shares at $43.67 (recurring investment)
- May 27th
- Bank of America (BAC) – added 0..25 shares at $36.68
- Lowe’s (LOW) – added 0.3 shares at $197.20
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!