What a rollercoaster of a month! By mid-August, I was sitting on a return of 5%+, but life is rarely that straightforward. By the close of the month, I was glad to eke out a small gain, again underperforming the S&P 500.
If you aren’t familiar with the Income Portfolio, check it out before you read on. This series is primarily focused on monthly portfolio updates.
August was a busy month on a personal level. The work involved in moving and decorating the new house meant I didn’t have a huge amount of time for anything else. I did manage to squeeze in enough exercise to keep myself sane, but I’m looking forward to having more free time on my hands over the coming months as the work in the new house dies down.
Slightly down from the three additions in July, there were two new additions to the Income Portfolio in August.
Crunching the Numbers
Savings: €0 saved. This will be the norm for the next few months. As we start paying our mortgage and decorating our new house the money set aside for savings will be non-existent. Once the house is decorated I plan on starting to save again.
Income Portfolio: $577.41 contributed in August. Figures for the income portfolio will be stated in USD as that is the primary currency the stocks are denominated in. Currency risk will play a role in the returns for this portfolio but as we know from our risk post, that can work both ways.
Passive Income: In August I added an estimated $28.90 in future yearly dividends.
The Income Portfolio Returns
The streak of underperformance versus the S&P 500 continues! For the third month in a row, the Income Portfolio returns were less than the benchmark. The S&P 500 returned 2.90% in August. The Income Portfolio returned 1.14% in the same period. An underperformance of 1.76% isn’t ideal, but the longer I invest in the Income Portfolio the less the month to month fluctuations bother me.
On a more positive note, there were two dividend increases in August (that I didn’t notice until I wrote this post). $RGR raised its quarterly dividend from $0.86 per share to $1.00 per share ($3.44 vs. $4.00 yearly)which represents a 16.27% increase. With 5 shares in my portfolio, this increased my yearly income from $RGR to $25.00 from $17.20. Nothing to be sniffed at. $SCCO also raised its quarterly dividend from $0.70 to $0.90 per share ($2.80 to $3.60 yearly) which represents a 28.57% increase! At the time of the raise, I had 3 shares of $SCCO in my portfolio, meaning the increase raised my yearly income from $8.40 to $10.80. Whether these companies can continue paying the increased dividend remains to be seen, particularly in the case of $SCCO as the companies profits are influenced by the price of copper.
I know these amounts are small in the grand scheme of things but they give me satisfaction anyway. Seeing dividends being raised increases my all-important yield on cost, but it also tells me I’m picking my stocks well (in terms of dividend growth at least). Taking note from EngineerMyFreedom, I’m going to try to include more graphics in my monthly updates. With that said, I’ll be posting my yield numbers in future (and maybe more to come).
- SIMO $0.71 received.
- SCCO $2.70 received.
- RGR $5.00 received.
- TAIT $1.12 received.
Total Dividends Received = $9.53
Stocks Added in August
Two new stocks were added to the Income Portfolio in August. Below is the initial performance for each.
Gold Fields Limited
- Number of Shares – 3
- Purchase Price – $9.89
- Dividend Yield at Purchase – 3.13%
- Closing Price – $9.48
- Return – -4.14%
- Number of Shares – 2
- Purchase Price – $21.74
- Dividend Yield at Purchase – 4.23%
- Closing Price – $20.07
- Return – -7.68%
September Stock List
All of the below stocks are on my list to purchase in September. I have added €500 to the account for the month.
A large number of stocks on the list. Interestingly, there were a few stocks that passed my screener but did not meet all of my criteria that are already in the portfolio. $PFE, $SPTN and $TAIT are all names I own but did not make the cut in September.
Other Interesting Items
One thing I have been contemplating lately is my over-dependence on US-listed companies. The way I select stocks relies heavily on a stock screener as a first step, I use Finviz. It only covers equities listed on US exchanges. Although I’m not 100% exposed to the US ($RIO being my biggest position is UK based), I would like to try and reduce my currency exposure to the USD. With that in mind, I’m on the lookout for a good stock screener that includes EU equities. Ultimately I don’t feel overly pressured to reduce my US exposure, as most of the companies trade globally and are not solely focused on the US market, but I do need more EU exposure.
Lately, I have been trying to get back into the habit of reading before bed. I recently finished a book entitled “Shiver” by Allie Reynolds. Being a thriller/murder mystery, it isn’t something I would usually go for but I had it in the house and I’m glad I picked it up. Fun, atmospheric and descriptive I would recommend reading it. The next book on my list is “The Lies of Locke Lamora” by Scott Lynch. I have been meaning to read the “Gentleman Bastard” series for a while and finally took the plunge and bought the first book. Stay tuned for an update next month.
As always, this post is not a recommendation to buy the above list of stocks. It is for informational purposes only. Before investing your hard-earned money, make sure you do your research.
The Stoic Trader