August 2018 Update

The markets took comfort by rising on a possible trade deal with Mexico with hopes of Canada being a slam dunk being dashed (until possibly next month) by the president’s own words (albeit off-record) that shot the negotiations down.  Kind of have to wonder about the art of that deal :).  Anyway, earnings were generally good with only a few surprises although several companies guided lower on tariff concerns and the inability to maintain the run rate that was accelerated by the tax plan.  I did come off the sidelines a little this month with mostly repositioning moves on the few dips.  August saw a rise in the S&P of 3.03% while my portfolio lagged a little by registering an increase of 3.02%.  YTD I’m ahead of the S&P by 1.06%.

Portfolio Updates:

  • Initiated GNBC (hedge on VBTX merger)
  • added to LUV on weakness
  • added to CHD (repositioning move – now overweight through the dividend)
  • Initiated MSCI on weakness (capturing their 52.63% dividend increase)
  • added to JNJ (repositioning move – now overweight through the dividend)
  • added to COBZ (merger approved by regulators)


My main focus resides on dividends.  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.

  • August delivered an increase of 53.11% Y/Y, the impacts being a Sep dividend paid in Aug (10%), last month’s rebalance (5%), dividend increases (5%), interim/final cycle (5%), purchases (1%) and the remainder being dividend reinvestment.
  • August delivered a 17.93% increase over last quarter (May) due to an interim/final cycle.
  • Dividend increases averaged 14.83% with 69.16% of the portfolio delivering at least one increase (including 1 cut (GE).
  • 2018 Dividends received were 77.59% 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.


GE‘s rail unit to spin then merge with WEB

GE to spin 80% of the health business

NVS proposed spin of Alcon scheduled for shareholder approval Feb 2019


XRX merger with Fujifilm cancelled (now being litigated).

SHPG to merge into TKPYY

GBNK to merge into IBTX

COBZ to merge into BOKF

GNBC to merge into VBTX (semi-reverse)


The Y/Y dividend result is a great illustration of the power of reinvestment – particularly in light of the fact that “fresh” money investment is minimal.  Next week will be the continuation of the 3Rs series which will highlight some of the moves I’m making going into 2019.  You might guess at a couple of them based on my portfolio additions.

Hope all of you had a good month as well.

2 thoughts on “August 2018 Update

  1. Question SR. Does your broker withhold dividend tax on your Canadian dividends? Mine does. When I was working full time, it didn’t bother me since I made enough money to take a full credit on my tax return. Since I semi-retired, I don’t make enough earned income to take the credit. So I have not invested in many Canadian stocks for that reason. Can I call my broker and have them eliminate this witholding? Tom

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  2. I receive Canadian dividends in three accounts, two taxable and one IRA. On the taxable accounts, both brokers withhold 15%. In 2017 I was able to use the US credit (avoiding double taxation), in 2018 had to go the less lucrative deduction route.

    Being aware that I was about to hit the break point, I began using my IRA for Canadian issues as the tax treaty provides for no withholding. I added Power Corp in 2017 and RY in 2018. Power was new but I sold RY in my taxable account and added it to my IRA. Most Canadian securities are eligible for this tax treaty treatment in IRAs but some are not. Schwab has me call their tax people to ensure issues I purchase in my IRA are indeed eligible.

    On your Medtronic post, one of my Irish companies avoids the DWT while the other gets nailed with a Luxembourg tax. Switzerland is weird in that there’s a two-tier tax – higher if you don’t pre-declare. The ADR manager handles this paperwork so I get the lower withholding. It wouldn’t be worthwhile at the higher rate. Generally when Australia franks there is no withholding. Currently no withholding on UK or Bermuda stocks.

    Yes, it’s fun and games in international issues 🙂


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