After a few months of cycling between outperforming and underperforming the S&P 500, July was the second month in a row that the Income Portfolio underperformed! Am I worried? Not in the slightest.
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.
I can finally say that nine months after purchasing our first home, we have officially moved in! What a relief, and what a feeling. My returns could have been catastrophically bad this month and I would still have been in a good mood. Thankfully, that didn’t happen. Although the returns this month were minimal, I made some important changes to how I invest, namely changing my broker of choice. Stay tuned for a post on that.
July saw three new additions to the Income Portfolio, a nice uptick from the one new name added in May and June respectively.
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: $526.85 contributed in July. 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 July I added an estimated $24.13 in future yearly dividends.
The Income Portfolio Returns
After last months poor performance, I was hoping for a rebound in July, but it never really materialized. The S&P 500 returned 2.27% in July, but the Income Portfolio underperformed again with a return of 0.22%. Although the Income Portfolio lagged the S&P, it was nice to eke out a small gain after last months loss.
As I have become more comfortable with the month-to-month swings in the portfolio, their effect on me has lessened. Early on in the life of the portfolio a positive month would leave me happy while a losing month would leave me unhappy. Now, I just take the positives either way. If it is a positive month, fantastic. If it is a negative month, the stocks I want are cheaper. Being a private long-term investor I don’t have any performance targets to meet, this portfolio will be in existence as long as I am so the performance doesn’t concern me from month to month.
That said, I will continue to report the monthly performance for the foreseeable future. I think it’s important from a transparency point of view.
- SPTN: $1.40
- CRWS: $2.80
- KBAL: $0.72
- STLD: $0.51
- MSM: $2.25
- CSCO: $2.59
Total Dividends Received = $10.27
Not quite as high as last month, but a solid month for dividends.
$RIO also announced hugely positive H1 results in July, declaring a standard dividend of $3.76 and a special dividend of $1.85 per share resulting in an overall dividend of $5.61 per share. This represents a 262% increase on H1 2020 ($1.55 per share). As one of the largest holdings in my portfolio, this represented a nice bonus for the month. With 6 shares in my portfolio, my next $RIO dividend will be $33.66! This puts my yield on cost at 6.62% for 6 months of the year, a similar dividend in H2 would mean a 13% yield!
Stocks Added in July
Three new stocks were added to the Income Portfolio in July. Below is the initial performance for each.
- Number of Shares – 1
- Purchase Price – $35.96
- Dividend Yield at Purchase – 5.57%
- Closing Price – $37.81
- Return – 5.14%
- Number of Shares – 2
- Purchase Price – $22.02
- Dividend Yield at Purchase – 3.64%
- Closing Price – $18.60
- Return – -15.53%
- Number of Shares – 3
- Purchase Price – $12.79
- Dividend Yield at Purchase – 3.13%
- Closing Price – $10.55
- Return – -17.51%
One decent performance, two pretty horrible ones. But it’s only the first month and… transparency.
August Stock List
All of the below stocks are on my list to purchase in August. I have added €500 to the account for the month.
More names than usual and two new additions will be made in August.
Other Interesting Items
With the house move, I have had very little time for my usual podcast listening and general exploring. One great episode I listened to was Tim Ferriss with Chris Bosh. I have been a long time listener to Tim, but over recent years have stopped listening religiously. Now I dip in and when I see an episode I think maybe interesting. This one caught my eye. I had never heard of Chris Bosh before, I’m not a basketball fan, but this episode blew me away. It is rare to get this sort of insight into a world-class sportsperson. I had a picture in my head of what a typical top-level athlete is like. Driven, with a singular focus on their sport of choice. In the case of Chris Bosh, I was wrong. I was impressed by how well-read he is, and even more so by his pursuits outside of basketball life. The man epitomizes lifelong learning which I believe is a cornerstone to any happy life.
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