Welcome back to Dividend Dollars and our weekly review where we discuss what happened in the market and our portfolio.
The first week of June was a short one! Short in terms of trading days, but also short in terms of the market movement as it failed build on last week’s gains. The market this week showed renewed seller’s interest off of the back of economic concerns, earnings outlooks (looking at you Microsoft), and monetary policy.
As discussed in our monthly market recap, JPMorgan Chase (JPM) CEO Jaime Dimon said that he sees a storm ahead, whether it’s an “economic hurricane” or a slight down pour, we need to ready. He and JPM will do so by being conservative with their balance sheet. On Friday, Elon Must said that he had a bad feeling about the economy and that his electric car company Tesla (TSLA) needs to freeze hiring and cut 10% of staff.
Every S&P sector finished Friday in the red with the exception of the energy sector. Healthcare, real estate, financial, and consumer staples were the worst performers. Energy was the best performer followed by information technology at a distant second.
The energy sector’s performance this week was a result of oil prices pushing higher off an announcement by the EU to ban 90% of Russian crude imports by the end of the year and an announcement from OPEC that they will boost production targets for July and August. OPEC’s oil decision is sound on the surface, however, oil traders saw it as insufficient to meet demand. Demand is expected to rise in the wake of China’s reopening and the EU’s oil ban. WTI crude started the week at $115.07 and are now at $118.87. It had just come off of highs of $120.46 which is the highest level seen since March.
Rising oil prices will yet again seep into rising gas prices, reinforcing inflationary concerns and hawkish policies at the Fed.
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 $9,220 into the account, the total value of all positions plus any cash on hand is $9,497.74. That’s a total gain of 3.01%. The account is down $85.99 for the week which is a 0.9% 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 -7.79% whereas our portfolio has an overall return of 3.01%! 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 4%. 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 four dividends. $1.00 from Aflac (AFL), $3.12 from Intel (INTC), $2.94 from XYLD, and $1.96 from Cummins (CMI)
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: $131.86
Portfolio’s Lifetime Dividends: $154.79
Below is a breakdown of my trades this week and what I’m looking to buy next week!
- May 31st
- Realty Income (O) – added 0.2 shares at $68.00
- Lockheed Martin (LMT) – added 0.05 shares at $440.80
- Ally Financial (ALLY) – initiated position at $42.82
- Bank of America (BAC) – added 0.25 shares at $36.52
- June 1st
- SCHD – added 0.128518 shares at $77.81 (recurring investment)
- XYLD – added 0.22528 shares at $44.39 (recurring investment)
- Intel (INTC) – dividend reinvested $3.12
- Aflac (AFL) – dividend reinvested $1.00
- XYLD – dividend reinvested $2.94
- June 2nd
- Bank of America (BAC) – added 0.25 shares at $36.36
- Coca-Cola (KO) – added 0.1 shares at $62.90
- Cummins (CMI) – dividend reinvested $1.96
Stocks I’ll be watching to add next week: Best Buy (BBY). BBY’s ex-date is coming up in about a week. My position is down just over 13% on it to date. I’ll continue to DCA into this position leading up to the ex-date.
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!