March 2019 Update

With it being tax time in the US, closing out the first quarter and a yield curve inversion – this week’s installment has plenty to offer. With the market generally on the rise for the month I decided to maintain a cash heavy (for me) position while putting the finishing touches on my tax return. My general attitude has been one of caution for the past several months with the markets finally putting a yield curve inversion on display. Larry Kudlow was making the rounds this morning maintaining this is an aberration – and it very well could be. But it easily could be an omen of a looming recession – perhaps as early as late this year. Meanwhile, the S&P rose 1.76% while my portfolio rose 1.05%. For the year, I’m slightly behind the benchmark by -0.71%.

PORTFOLIO UPDATES

  • Increased my ETF position (CUT,VGK,EWA,EWW,JPMV)
  • added WSFS and lost BNCL (merger)

DIVIDENDS

While my primary focus resides on dividends with the goal being 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.

  • March delivered an increase of 8.34% Y/Y, the largest impacts being dividend cuts and a couple of cycle changes offset by increases.
  • March delivered a 23.3% increase over last quarter (Dec) – basically a return to normalcy.
  • Dividend increases averaged 6.19% with 34.55% of the portfolio delivering at least one increase (including 4 cuts (two being OMI)). This is off last years’ pace and I believe a new personal record for dividend cuts in a single year since about 1980. The most recent one being UNIT whose largest customer declared bankruptcy.
  • 2019 Dividends received were 27.12% of 2018 total dividends putting me on target to exceed last years’ total in late October.

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.

SPINOFFs

NVS spin of Alcon (ALC) scheduled for April 9th, 1:5 ratio

On Oct 4,2018 MSG filed a confidential Form 10 to spin the sports business

MERGERS

XRX merger with Fujifilm cancelled (still being litigated).

BNCL merger into WSFS completed March 1st

BHBK to merge into INDB

TRUMP TAX PLAN IMPACT

This is a brief preview of the tax changes at a personal level. Headlines have previously reported that early filers were seeing lower average refunds – my guess is most of these did not adjust their withholding. Since then, the IRS has reported that the refunds have begun to ‘normalize’. As one who itemizes, my sense is that many filers are beginning to identify their own impact. In my case, I have a tax increase – not a cut – primarily due to being just below the new threshold for itemization. The standard deduction coupled with the tax brackets did a little number on me – which is what I was expecting so I wasn’t caught unaware. Adding salt to the wound was another change that disallows my minimal IRA contribution (as a non W-2 wage earner). On the bright side, my foreign taxes paid on dividends can still be applied as a tax credit. Bottom line – only in Trump World would the path to Making America Great Again run through the field of non-US stocks – assuming one wants as low a tax liability as possible.

SUMMARY

The blog data conversion to 2019 is almost complete still being worked on. The most significant error is my cost basis (dividend date screen) which doesn’t yet account for all DRIP additions or additional purchases. At this rate it may be 2020 before I finish this update.

Hope your month/quarter was a good one!