Tax loss harvesting is now in full swing, the common denominator being – all are ancillary positions. In reviewing the years’ performance (or lack thereof), two months were key drivers – March and May. The first due to February’s bank failures and the second a result of the duration mismatch fears with banks. Excluding these two months, the portfolio performed on par with the index. Being overweight in financials at the time of implosion was my failure for 2023.
The interesting metric of the month is the increase in Yield On Cost (YOC). As the issues sold were all less than 1% weighting, I expected no change. While requiring further analysis, a possibility could be lackluster performers are a greater drag on results.
Another CD was purchased (5.4%), adding another rung to the CD ladder being built. My goal being a 90/10 split in Dividends/Interest for 2024 (up from 97/3 in 2023). I’m still avoiding Treasuries for the moment.
Two equity purchases were made (none new) to offset the dividends lost in the five sales.
Portfolio Performance
For the month, the S&P rose 8.92% while we only increased 8.61%. The index is ahead for the year by 13.73%, so we lost a little more ground.
Dividends
Dividends and interest for the month registered a Y/Y increase of a 5.99% gain over 2022. The run rate remains 110.99% and Dividend increases are averaging 9.31% including one decrease with 68.75% of the portfolio announcing. The 7.44% on the Scoreboard is collected versus announced.
New Positions
- none
Positions Increased
- KMB, PEP
Completed Mergers
- none
Positions Sold
- CZNC, WSFS, CNDT, CSL, NWBI
Positions Reduced
- none
Cancelled Mergers
- none
Pending Mergers
- none
Cash Position
- Cash on hand decreased to 5.66% from 5.03%.
Spinoffs
- ABBNY announced a delay in the Chargedot IPO due to “challenging market conditions”
- Baxter (BAX) announced plans to spin off their kidney care unit
- TC Energy (TRP) plans to spin their Liquid Pipelines division
Corporate Actions
- None
Summary
The intention with the sales is to add enough to current positions to maintain a stable dividend flow and use the remainder to build the CD ladder while interest rates remain above the portfolio’s Yield On Cost (YOC) while the differential is greater than 0.5%.
Note: This particular strategy is viable for older folks only. If your investment horizon is greater than 10 years, it may not be the best option.
Have a great December!
Seeking Returns 