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Another interesting month in the markets comes to a close! December 2020 marked the first month the income portfolio was out-performed by the S&P 500 but still managed to eke out a small gain.
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.
My savings rate was steady again in December. In a regular month, I would have saved more but Christmas had an effect. I know many people advocate budgeting over the entire year for Christmas, but I haven’t come around to that way of thinking just yet. I also contributed to my income portfolio when I possibly should have saved more, but again I am enjoying the investing process too much to worry about it.
Apart from the income portfolio, my automatic pension contributions (10% of gross salary) have continued as normal. This will double to 20% of gross salary in February. The biggest achievement for me in December was the fact that I negotiated a €15,000 raise in salary. This will take effect from January, and should add roughly €600 per month in after-tax income. As I mentioned above, my pension contributions will increase in February which means the actual amount I will receive each month will be around €200, with the additional €400 being sent to the pension. Due to the tax breaks associated with pension contributions, the €400 in after-tax income will amount to a mention contribution of around €680.
Crunching The Numbers
Savings: €1,200 saved.
Pension: €562.50 contributed. Half by my employer, half by me. My contributions cost me €168.75 in after-tax income.
Income Portfolio: $379.56 contributed in December. 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 December I added an estimated $15.83 in future yearly dividends.
The Income Portfolio Returns
As a benchmark, the S&P 500 returned 3.71% in December. The Income Portfolio return for the same period was 2.88%. December was the first month the portfolio underperformed in relation to the S&P 500, but a small gain is better than nothing.
Dividends Received: It was another busy month for dividends!
- PFE: $0.64 received ($0.76 before withholding tax).
- HNNA: $0.12 received ($0.1375 before withholding tax).
- EVR: $0.52 received ($0.61 before withholding tax).
- GNE: $0.35 ($0.425 before withholding tax).
- MSM: $2.98 received ($3.50 before withholding tax). This was a special dividend.
- NC: $0.32 received ($0.385 before withholding tax).
Total Dividends Received = $4.92
Stocks Added in December
For transparency, I will list the stocks purchased in December, all of which were purchased on the same day (1st December). The closing prices quoted are the closing prices on the 31st of December. I will provide full details of my new positions, along with additions to previously held positions. There were three new stocks added to the portfolio in December. They were HVT, GNE, and JNPR.
HVT – Haverty Furniture
- Number of Shares – 1
- Purchase Price – $28.09
- Dividend Yield at Purchase – 3.13%
- Closing Price – $27.67
- Return – -0.54%
GNE – Genie Ltd
- Number of Shares – 5
- Avg. Purchase Price – $8.32
- Dividend Yield at Purchase – 4.09%
- Closing Price – $7.21
- Return – -1.50%
JNPR – Juniper Networks Inc.
- Number of Shares – 1.75
- Avg. Purchase Price – $21.86
- Dividend Yield at Purchase – 3.66%
- Closing Price – $22.51
- Return – 1.40%
I also added to CSCO, HNNA, KBAL, MSM, and SIMO. For an up to date and more complete picture of the portfolio, you can view it here.
January Stock List
All of the below stocks are on my list to purchase in January. I have added €300 to the account for the month.
As you can see, all of the above stocks are already in the portfolio so I will not be adding new positions in January, just adding to current positions.
2020 in Review
2020 has been a hugely positive year on the personal finance front. Between starting a new job in March, buying our first home, securing a raise in the said job, and starting the Income portfolio, it has been a hugely positive year. The Income portfolio started in earnest in October when I eventually pulled the trigger and invested in some individual stocks. Up to that point, all of my investing had been done through my pension in index funds. I know most of you are numbers fanatics like me, so I will leave you with a comparison between the S&P 500 and the Income portfolio for Q4 2020 (Oct-Dec).
S&P 500 Return = 11.69%
Income Portfolio Return = 14.80%
One point to note if you are viewing the portfolio on Wallmine. The money made from my VTRS sale has not been included in the total return (yet). As discussed in the November review, rather than giving me VTRS stock from the PFE split, my broker paid me the cash.
Overall I’m happy with how 2020 went, and happy with the initial performance of the Income portfolio. If I can continue to outperform the S&P 500 by 3% per quarter I will be a happy man indeed.
Hope you all have a prosperous 2021!
The Stoic Trader