What a way to start the new year. Beginning with the reshuffling of my portfolio and continuing right into earnings season and the inevitable debate over the Coronavirus impact on the economy … all I can say is yep it’s a lot to digest – and it’s only January. With the gyrations in the market, all but two of my low-ball limit orders executed, probably the most controversial being MTR Corporation – the Hong Kong high speed rail line recently at the forefront of the protests. Anyway, I added two Canadian companies (Fortis and TMX Group – (Toronto stock exchange)) and starting the long rumored whittling of some of the non-core holdings (XRX and MSGN). Most of the other action was moving Canadian companies from my taxable accounts to the IRA – some of which were done as a rebalance to minimize fees (hence the slight additions to the other holdings). Also selling part of the PB stock (which went overweight due to a merger) to fund these movements. As I indicated last week, this is the first of a multi-month transition. Obviously my timing was decent (this time, anyway) as the S&P lost 0.16% for the month while my portfolio gained 1.81%.
My primary focus resides on dividends with the goal being a rising flow on an annual basis.
- January delivered an increase of 22.73% Y/Y primarily the result of last years’ dividend cuts rolling off.
- Dividend increases averaged 11.48% with 8.5% of the portfolio delivering an increase.
- 2020 Dividends received were 1.86% of 2019 total dividends putting me on target to exceed last year’s total in November. The YTD run rate is under my 110.0% goal but I anticipate this will normalize as my portfolio movement becomes clearer and the current year begins to distinguish itself from the last.
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.
AT A GLANCE
The relationship between market action and purchase activity was roughly 95/5. As I’m generally playing with ‘house money’ (proceeds from sales, M&A activity and dividends), I doubt there will be a significant variance until I fund my 2019 IRA contribution. The Net Purchase Expense being less than 1 or 2% illustrates the ‘house money’ concept. Timing did play a part as I sold early in the month (before the drop) and most of the purchases were in the latter part of the month.
Spirit MTA REIT (SMTA) voted on Sept. 4th to approve the sale of most assets to HPT for cash. A second vote was held to liquidate the REIT. The first payment was received and awaiting final settlement payout. Fully expecting a profitable outcome for one of my most speculative positions.
SCHW to acquire AMTD for 1.0837 sh SCHW to 1 AMTD. My only surprise with AMTD being taken out was the suitor – I had expected TD. Regardless, I have three concerns over this deal, 1) profit margin compression with the onset of $0 fee trades, 2) possible liquidation of a partial TD stake to reduce their ownership share from 13.4% to 9.9% (the same issue Buffet regularly faces) and 3) 10 year phase-out of AMTD/TD cash sweep account relationship. The third one means TD has a low cost (albeit, decreasing) source of deposits for the foreseeable future. After the first of the year, I’ll probably cash in AMTD and increase TD a little further.
Overall, the only complaint is the sluggish start to the year. Minus the drag from last years’ dividend cuts I figure this will be short lived. On my goals, progress was made as follows:
- Scenario 1 – TD is now confirmed
- Scenario 2 – Half complete, awaiting timing issues for the sell part
- Scenario 3 – Determination of maximum contribution amount complete
- Scenario 4 – 2020 RMD amounts identified
Here’s hoping your month was successful!