Every now and again events are thrown our direction which necessitate a change. Being one who abhors change, I tend to procrastinate until the absolute last minute. I knew the drive in my laptop was on its’ last legs a year ago when I bought a new one. Last week it bit the dust. I did perform regular backups so data loss was minimal. What loss exists is not due to Wanna Cry but their evil twin, Micosoft (MSFT). Though I have an Office license, my use (legally) of an upgraded version resulted in the inability to perform a backward migration. It appears my best recourse is to purchase an upgrade. My frugal nature has an issue with this solution (being held hostage?). Meanwhile, seeing if Google fills the void. I did add a sheet to my Dividends spreadsheet (Div Dates) which – assuming I get the hang of conditional formatting – has the potential of automating my watch list.
April brought more noise to the market with geopolitical issues front and center. The market appeared to acknowledge the fact that even with Republican control of government, a more centrist approach is necessary to accomplish much of anything. The President’s first 100 days ended with one legislative win; a Supreme Court Justice. As earnings season kicked into high gear and the French election completed (runoff pending), the markets rebounded and the S&P ended the month with a .91% gain. Including new money (mostly IRA maximization), my gain was 3.41% (2.32% excluding new money).
The forced move from the Loyal3 platform is essentially complete. Full shares arrived at Schwab April 27th. Fractionals did not move – basically a he said/she said scenario. Schwab says they would accept them while Loyal3 said they wouldn’t. All fractional shares on Loyal3 were sold April 28th, netting $218.59. Loyal3 was basically my ‘spare change’ broker and illustrates the benefits of investing even small amounts. The trades will settle Wednesday and Friday I’ll transfer remaining funds – after I see which direction the YUM dividend goes.
I decided to use Schwab’s synthetic DRIP for PEP, DIS, SBUX, KO and HAS to mitigate the sting of having to sell shares – even fractionals. I’ll take the cash on YUM, AMC, AAPL and K.
Headlines impacting my portfolio (bold are owned):
- 4/3 – IBTX closes Carlile merger
- 4/4 – NJR/SJI discuss merger
- 4/4 – MSGN discusses sale
- 4/7 – JNS merger date expected 5/30/2017 new ticker expected to be JHG w/ qtrly divs
- 4/10 – UNIT acquires Southern Light (pvt)
- 4/17 – CCI to acquire Wilcon Holdings
- 4/17 – BX acquires Eagle Claw Midstream
- 4/20 – UMBF sells institutional investment arm to RJF
- 4/20 – SLF acquires Premier Dental
- 4/24 – NWBI to close consumer finance subsidiary
- 4/27 –TOWN to acquire PBNC,
- 4/27 – IVZ to acquire Source UK
- Added to JNS
- Added to VALU
- Initiated position in PWCDF
- Initiated position in ARD
- Initiated position in HOMB
- Sold LB
- Sold UL
- Reduced (fractional positions) YUMC, SBUX, PEP, K, YUM, DIS, SQ, KO, AMC, AAPL, HAS
- April delivered an increase of 32.55% over April 2016. 17.25% of this increase is attributable to purchases, 48.41% a result of semi-annual cycles (Ireland, Australia) and the remaining 35.51% a result of dividend increases.
- April had an increase of 20.28% over the prior quarter due primarily to the same reasons.
- Declared dividend increases averaged 8.72% with 42.94% of my portfolio delivering at least one raise (including 2 cuts – YUM, XRX).
- YTD Dividends received were 38.1% of total 2016 dividends. If the current run rate is maintained would exceed 2016 in early November – particularly with most of my semi-annual or interim/final cycles paying during the next quarter.
The MET spin (Brighthouse Financial – BHF) remains pending.
Agrium/POT, JNS/HGG.L (estimated completion 30 May) andremain pending. I did add to JNS and HOMB as both appeared undervalued versus the merger price.
Every now and again you wind up getting what you pay for and there’s no such thing as a free lunch. I probably came to this realization last summer when I ensured that even my smallest holding on the Loyal3 platform had greater than a fractional share. So the news this week of their migration to FolioFirst was no big surprise. The issue I have with FolioFirst is the $5 monthly fee. So transferring my holdings becomes priority one. In fact Dividend Growth Investor lays out the options fairly succinctly in his post.
Early on, my strategy with Loyal3 was twofold:
- Move three horses to the platform to generate enough dividends to play with. This was accomplished with PEP, AAPL and SBUX.
- Build a group of speculative holdings (less than 1% portfolio weighting) via dividends generated by the first goal.
The free trades with Loyal3 accelerated this process. Today I’m faced with a (slight) strategy shift.
An order was placed this morning to sell Unilever (UL) and L Brands (LB). Unilever due to taking profits off the table and for a sense of protection from a potential single headquarter location and the possible corresponding tax implications. L Brands due to uncertainty with their ability to maintain comps while the malls where their stores are located appear to be imploding. I’ll use this as a tax loss against UL and the required fractional share sales.
My remaining Loyal3 full share holdings (YUM, YUMC, AAPL, K, SBUX, HAS, DIS, SQ, PEP, KO and AMC) will be moved … Loyal3 will not move fractionals which will need to be sold. My goal is to have the transfer complete prior to May 1st which is the ex-div date for the next payer, Hasbro. I can then sell any remaining fractionals, wait for YUM’s dividend to post (May 5th, went ex-div April 14th), then move any cash into my bank.
My default approach will be to consolidate the holdings into my existing brokerage account which provides the alternative to reinvest dividends. I will, however, meet with TD Ameritrade today as they (via phone conversations) have indicated they perform OTC ‘grey market’ trades with no surcharge. As Schwab charges a $50 surcharge, this may clinch the deal for AMTD.
So any Loyal3 strategy shifts in your future?
Update: 20 Apr 2017 – UL and LB sold, decision finalized on move of remaining to existing Schwab account. AMTD has no set ‘grey market’ policy but will normally adjust the fee. Lack of certainty killed this option.
The second month of the Rolling Unabridged Monthly Portfolio (RUMP) is in the books with the results posted a few days ago. A few were added, a couple removed and one renamed (Mr Free at 33). No major surprises revealed themselves while the update cycle settled into the 6-9 month desired lag. Following are the highlights, findings, questions and issues identified round.
Last month saw the commencement of the Congressional take on the ‘bully pulpit’ with first Heather Bresch (Mylan (MYL)/EpiPen) then John Stumpf (WFC) called on the carpet. One would think Heather would have been smart enough to avoid taking the same path blazed so brilliantly by Martin Shkreli (Turing/Valeant (VRX) fame). Her show was overshadowed by the even greedier Wells Fargo with John either portrayed as ‘asleep at the wheel’ or a criminal mastermind. Wouldn’t life be interesting if Congress actually did anything other than use hearings to frame media sound bites? The S&P was basically flat for the month ending down 0.12%. My portfolio was basically flat as well, ending up 0.04%. This increases my lead for the year to 11.88% with one quarter left to go.
Headlines impacting my portfolio:
- 9/1 – CHD 2:1 stock split
- 9/2 – Ireland to appeal EU anti-AAPL tax ruling
- 9/6 – ENB to acquire SE
- 9/12 – AGU/POT reach merger agreement
- 9/19 – REITs officially become their own sector
- 9/26 – YUM spin set at 1:1 YUMC for 10/31
- 9/29 – Supreme Court agrees to hear credit card surcharge case
- – PNY/DUK merger approved, closing set for 10/3
I’m a little behind this month but the portfolio data has been compiled and will be posted in the next couple of days with the goals update later in the week. The Unabridged portfolio should be next week as per normal.
- FMBH replaced FCLF due to merger
- Added to TOWN – this ‘makes whole’ this holding following my sale of MNRK prior to the merger. (didn’t want to hold TOWN across two accounts)
- Added to AROW prior to ex-div for the stock dividend (shares added Sept 29)
- Added to SBUX
All were funded by dividends with no ‘new cash’ deployed. New cash was deployed for the annual funding of the trust I manage (skip generation). The trust is excluded from my DGI portfolio and WFC is this year’s addition. This is only the second time I’ve duplicated one of my holdings – the other being DIS. The other trust holdings are GIS, HSY, PG, WMT, WGL, UNP, KHC and TXN.
- September delivered an increase of 24.7% over September 2015. This was due about evenly between dividend increases (Y/Y) and late 2015 funding.
- September was up 4.4% from the prior quarter.
- Announced dividend increases currently average 12.91% with 63.09% of my portfolio having at least one raise so far this year.
- Through September, dividends received were equal to 95.7% of all 2015 dividends, keeping me on pace to exceed last year’s total -now estimated to be October 4th (as compared to 2015 being Sept. 9th).
With the cash from PNY/DUK, I’ll be looking to redeploy primarily into existing Jan/Apr/Jul/Oct payers within my portfolio with no new positions expected. Losing PNY and the expected loss of LSBG (another merger) will leave about a 5.07% hole in my January dividend receipts unless I act now.
The YUM spin has been set for Oct 31st with YUMC to begin trading Nov 1st. I don’t think the XRX spin date and ratio have been set.
Month 2 of each quarter are my lowest dividend payment months of the year. And it’s destined to get worse now that my last First Niagara dividend check has arrived. Their merger with KeyBank makes them a month 3 payer now. Since I’ve got a couple of mergers left in left in the portfolio, it appears I’ll be reassessing the monthly payment flattening issue going into the new year. On to Rant #2 …
Oh the joys of summer and relearning the teenage life through the eyes of my grand daughter. An introduction to the world of Rattatas and Pinsirs as a player for Team Mystic. Unless you’ve had your head in the sand, these are characters in the latest craze (fad) to rule the planet. In case you’ve missed it, the newest ‘hot thing’ is none other than Pokémon Go.