he fourth quarter swoon continued in earnest this month resulting in an annual loss for the markets. While the final trading day closed higher (DJIA up 265, NASDAQ up 51 and the S&P up 21) it was nowhere near close enough to avoid the worst December since 1931. Though surprised by the resiliency of the US dollar, last year’s intent to migrate further into foreign equities was largely preempted by tariff uncertainty. My other 2018 concern of rising federal deficits stifling the economy did not manifest itself as yet – though I remain skeptical of administration claims that growth can outpace the deficit. For the month, the S&P index dropped by 9.18% while my portfolio dropped by ‘only’ 8.44%. For the year the S&P posted an unusual loss of 6.65% while my overall loss was 3.57%. In an otherwise ugly ending to the year, my primary goal of exceeding the S&P’s return was attained marking the 33rd year (of 38) that I’ve been able to make this claim.
The month was fairly normal until the final week with Italy followed by Trump’s tariff rollout. In between we saw the on again – off again negotiating style with North Korea and China. Other than a couple of down days it appears the market is learning to ignore the noise. Again I used the dips to my advantage and stayed the course. May saw a rise in the S&P of 2.16% while my portfolio outperformed the index by registering a rise of 2.24%. YTD I still lag the S&P by 0.35%.
- Added to CMCSA (making another round lot)
- Added to my ETF group (CUT, EWA, EWW, JPMV, VGK)
- Added to GE (on the rail spin (WAB) news)
- Added SMTA (via SRC spin)
- Added to BKSC (via 10% stock dividend)
- Added to DGX on news of UNH strategic partnership
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.
- May delivered an increase of 12.97% Y/Y fueled by dividend increases.
- May delivered a 15.98% increase over last quarter (February).
- Dividend increases averaged 12.14% with 55.98% of the portfolio delivering at least one increase (including 1 cut (GE).
- 2018 Dividends received were 46.53% of 2017 total dividends putting us on pace to exceed last year in early November.
Notes: the Q/Q shows an increasing trend line due only to timing of dividend payouts (pay date shifts). Y/Y is only on par with dividend increases as dividends received were used to purchase next quarter (rather than current quarter) dividends.
GE‘s rail unit to spin then merge with WEB
XRX merger with Fujifilm cancelled.
SHPG to merge into TKPYY
Any month with increasing dividends and beating the S&P has to be considered a good one.
Hope all of you had a good month as well.
The month was relatively crazy with geopolitics driving the highs and domestic lunacy driving the lows. In between were relatively strong earnings and interest rates inching higher driving the question of the bull market sustainability. Personally, I’m not overly concerned yet but Marco Rubio‘s “implication that Republicans have found no good answer to the problems Mr Trump described is irrefutable.” may be an omen of things to come. Meanwhile, I took advantage of some dips and stayed the course. April saw the S&P rise 0.27% and my portfolio outperformed the index by registering a rise of 0.65%! YTD I still lag the S&P by 0.43%.
For all the procrastinators out there the deadline is near. In fact, this year I was one – completing mine yesterday. This season brings to mind some of the best practices compiled to minimize – or delay – the tax hit, thereby maximizing disposable income published by the Dividend Diplomats. Though geared towards wage earners, I can be considered a poster child of these practices as one migrates from the accumulation phase of investing. Over the years the use of many of these strategies have resulted in continued savings well into retirement. Case in point being a 2017 Federal effective tax rate of 8.04% on a six figure Adjusted Gross Income ($156 of which was earned income). Take advantage of all of the breaks provided in life as early as possible to reap the rewards (true in investing as well).
April was generally favorable for the markets. Earnings reports presented few surprises although the trend of beating analysts’ expectations while presenting lower year over year results continued. Financials were modestly positive while old technology seemed to disappoint. Until month end, the market was drifting higher. Then Apple’s and Starbucks reports were weak, the BOJ failed to raise rates and Carl Icahn announced he sold his Apple position over China fears. So the month ended basically flat managing a gain of .27% – at least it was positive.
My portfolio value managed a 2.66% gain with the weaknesses (KMB, SBUX and AAPL) being offset by M&A activity (Comcast (CMCSA) acquiring Dreamworks (DWA) and First Cloverleaf (FCLF) being acquired).
- I changed my portfolio reporting to measure % of dividends provided instead of market value.
- Updated the Blog Directory
- Sold Monarch Financial (due to upcoming merger).
- With the proceeds, initiated positions in SRCE, BKSC, CVLY and AROW
- Moved CVX from DRIP to brokerage resulting in a fractional share sale
- Added to LTXB prior to their earnings release.
- Added to SBUX after earnings.
- Added to AAPL after earnings(and the Icahn announcement)
- Added to XRX – I anticipate a reverse split prior to – or in conjunction with – the spinoff. So trying to position myself more favorably in this event.
- April delivered an increase of 38.7% over April 2015. This was due primarily my first dividends from NJR and SJI coupled with dividend increases.
- April was also up slightly from last quarter by 4.4%
- Announced dividend increases currently average 10.05% with 48.6% of my portfolio having at least one raise so far this year. .
- Sold: Monarch Financial
- Bought: Source 1, Arrow Financial, Bank of South Carolina, Codorus Valley Bancorp
- Cancelled Chevron DRIP
Today I made the decision to sell Monarch Financial. This was going to be pulled from my account – probably later this month – anyway, so I chose to accelerate the process for these reasons:
- Locked in a 22% total gain over the past year and half
- Since I also own the acquirer, I didn’t want the same stock in two accounts
- In the event the merger fails (doubtful), could buy in cheaply