June 2018 Update

At month end, the first of the tariffs took effect with the markets basically going sideways while trying to figure the impact.  My impression is the first industry to be impacted (via retaliation) will be the lobster industry.  Other industries will be later as the supply chains run off.  Even the US dollar is taking the noise in stride resuming its’ ascent.  Finally, the CCAR results were released with approval of the majority of the capital return plans of the banking sector (additional dividend growth on the horizon).   Through this I generally stayed the course, the only exception being the implementation of a hedge on two mergers.  June saw a rise in the S&P of 0.48% while my portfolio underperformed by registering a rise of 0.14%.  YTD I still lag the S&P by 0.69%.

Portfolio Updates:

  • Added to WM
  • Added to my ETF group (CUT, EWA, EWW, JPMV, VGK) (missing ex-div on three)
  • Initiated GBNK (hedge)
  • Initiated COBZ (hedge)
  • Reduction in NXNN (reverse split in preparation for uplist)

DIVIDENDS

This is where my main focus resides.  Market gyrations are to be expected but my goal is to see a rising flow of dividends on an annual basis.  I’m placing less emphasis on the quarterly numbers as the number of semi-annual, interim/final and annual cycles have been steadily increasing in my portfolio.

  • June delivered an increase of 14.76% Y/Y fueled by dividend increases.
  • June delivered a 7.70% decrease over last quarter (March) due to an interim/final cycle and a move of one of my larger payouts to July.
  • Dividend increases averaged 14.04% with 60.38% of the portfolio delivering at least one increase (including 1 cut (GE).
  • 2018 Dividends received were 59.58% of 2017 total dividends putting us on pace to exceed last year in early November.

Note: I updated my Goals page to provide a visual of these numbers.  Based on Mr All Things Money’s instruction set with a conversion to percentages.  My code only updates when the monthly Y/Y number is exceeded.  Otherwise, the prior year actual is used.

Spinoffs:

GE‘s rail unit to spin then merge with WEB

GE to spin 80% of the health business

Mergers:

XRX merger with Fujifilm cancelled (now being litigated).

SHPG to merge into TKPYY

GBNK to merge into IBTX

COBZ to merge into BOKF

Summary

All in all a good – not stellar – month but it appears my continuing financial overweight will payoff next quarter.

Hope all of you had a good month as well.

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4 thoughts on “June 2018 Update

  1. SR, For so many years the headlines were about all our US jobs going to China damaging the economy and middle class in the process. Now that the US is trying to do something about that, the headlines are about how tariffs will damage US and global growth. Am I missing something? Tom

    Liked by 1 person

    • My guess is ‘it depends’. My view is the intent is noble but the approach is wrong. To invoke tariffs on our allies based on national security issues is one issue. Failure to complete negotiations (NAFTA, for one) prior to implementation is another. A third issue is the focus on manufacturing jobs (generally included in import/export numbers) versus service jobs (not always included for various reasons). My preference would be the utilization of the WTO (of which we are a party) prior to arbitrary measures.

      China is poised this week to implement an agreement with the EU that is similar to the one originally negotiated with the US. We reneged while it appears the EU will proceed which will force us further on the isolationist path. Perhaps this is a negotiating ploy – but my real concern is that the supply chain is literally worldwide. The disruption could set us back years until we rebuild a US centric one. As this administration does not appear to address the law of untended consequences in their planning, this is where I think the primary push-back is coming from – a current poor situation is better than a terrible future one.

      I expect we’ll see which view is correct (or a combination thereof) with 3Q results. Until then we’ll be looking at competing views with the various talking heads. Frankly, I’m not sure if my international exposure is a pro or con right now. Thanks for the visit! 🙂

      Like

  2. You bet. I wish I was a little smarter on this stuff. I find “it” interesting, but I’m afraid it’s a little beyond my pay grade. So I will just have to deal with that and muddle along. Thanks for your thoughts. Tom

    Liked by 1 person

  3. We’re all ‘muddling’ right now. 2Q results should be good – China apparently front loaded some imports ahead of the tariffs. What I’m looking for in earnings are forward guidance and any capex holds or reductions. 🙂

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