Your Sunday Portfolio's Update
Guy Flynt: March 31st, 2023
Hi everyone! To be transparent, I will give bi-weekly updates on a day of my main portfolio. If I have more time, I will give biweekly updates on my second portfolio, the “Funds For Fun” account. The main account is the Alex Dividend Growth Portfolio (ADGI). For this taxable account, I use the stock trading platform called Public (this is an affiliated link where I get a small kickback if you sign up with my referral code/link!). Public charges no fees to invest, you can choose to have your dividends to be in a reinvestment plan (DRIP) (this is very important and will likely be explained in another blog), the platform is simple and user-friendly, and you can buy fractional shares. I have enjoyed Public’s platform during this past year and will continue to use it in the future. The link above is an affiliated link sign up today and get a free slice of a popular stock between $3-300! This is my compounding machine in which I hope to reach financial independence by using dividend growth stocks to supplement my income.
Currently, I am planning on investing $300 each week. This number will go back up once I am done financing my wedding!
The second portfolio is to act as a high-return savings account. For this taxable account, I use an M1 finance account (Sign up today and get $10 for free!). I will use this fund to help pay a down payment on a car or house, and any other future expenses. Instead of getting a 1-2% yield/return, I hope to get an 8-12% return.
You can check out this Googlesheets link to see which companies I invest in, which ETFs my finance invests in, my Roth 401 allocation, and my “Funds for Fun” portfolio that I am using to pay for future expenses. You can also check this website called Track Your Dividends (I am not a sponsor, but use and enjoy their product) to freely track the dividends of companies you invest in. You can create multiple portfolios, and see the future value, diversification, and next upcoming payment of your portfolio. This is the main website I use to track my annual income and the future value of my portfolio. Sign up for free and effort start to track your portfolio. This link will send you to my fiancée and I’s holdings, 401k, and Funds For Fun account to see what we invest in and dividend income.
In each update I will go over my current mindset, any buys or sells, reasons for why I bought or sold certain stocks, the future mindset of the stock market, and visual graphics of my DGI holdings.
Financial Disclaimer: I am not a Certified Financial Advisor (CFA), I am a meteorologist. The blog posts about investing are my opinions and for your entertainment purposes. They should not be considered financial advice. Investing in the stock market is risky and you can lose money. If you want to invest in the stock market, or have questions about how or where to invest, please seek a CFA.
Affiliate Link Disclaimer: Some of the links are affiliated links with Public and M1 Finance. As a member of their platform, I earn a small portion if you click the link and sign up with them. I enjoy these companies and would not recommend them to you if I did not believe in their mission and platform. Thank you!
Alex Dividend Growth Portfolio Update
Current Mindset
In its current environment, the stock market is what I would call the “Wild Wild West”. The stock market is strung by the heart of those who buy and sell daily. It is weak, feeble, and can flip to a red or green day depending on what news is playing on TV or on your phone.
Most of the world is up to its neck in heartbreaking news. All of it is so sad. Just tune in on any news platform and you will see it flooded with stories. An EF-4 tornado ripped through Mississippi and the tragic news of an elementary school shooting in TN. Riots and protests are thick in the air, unrest fills our lungs, and we breathe out a sigh just to get ready for the next round.
We are now facing one of the scariest banking crises since 2008 and 2009. Several banks are filing for bankruptcy or being bought out. A few major banks have disappeared from the stock market completely. Many people in the US are in fear of holding their hard-earned cash in either a checking or savings account with their local banks. Not all banks are FDIC insured. So please check that wherever you bank, it is FDIC insured. If you are not sure, use this link to check your local bank. Not sure what FDIC insurance covers? I got you! Click this link to learn more!
As for me, I will likely stay away from most financial stocks. I like some financial stocks like Visa, Mastercard, insurance stocks, a few REITs, S&P Global, JP Morgan, Morgan Stanley, and most of the well-known banks. However, I only own one financial stock and that is Visa in my Funds For Fund account. I do not expect myself to buy anything except for REITs, insurance stocks, or the ones already mentioned once I get older and want more cash flow. At my current age, I don’t like the risk. I rather buy an ETF that is self-cleansing and has exposure to financial stocks than own individual financial stocks. Like Bill Burr once said, I just don’t trust the banks.
Despite all the chaos, as selfish as it sounds, I keep to myself. I make sure my future wife is happy. Talk to my family as much as possible. Enjoy the outside as it begins to warm in State College, PA. I turn my blinders on to enjoy life and invest to one day reach FIRE. Because, there is so much chaos in the world, trying to comprehend it, would just drive you mad.
In terms of my DGI portfolio, there have been a few changes in terms of allocation. Which will be discussed below. I continue to dollar cost average of $300 per week into my DGI portfolio. One goal I am happy to announce is that we have reached the $500 yearly dividend mark when combining my future wife’s account, the Funds For Fund account, and my DGI account. So far, each year, our portfolio pays us over $500 in dividends. We didn’t work for that money. We let our money work for us. The true power of passive income.
The Buys and Sells
The Buys
The same weekly buys into my favorite 17 stocks and 2 ETFs.
The Sells
Nope!
Why I bought and Sold
Why Did I Buy it?
I buy to achieve FIRE!
Why Did I sell?
No, sell!
Future Mindset of the Stock Market
I am no financial expert, but I do not see our current or future economic environment in the next 6 months producing a bull rally anytime soon. There are so many parameters driving and picking at the stock market, but three factors stand out the most.
- The federal bank’s decision on interest rates will greatly affect the stocks market mood
- The CPI and job report. This will weigh in on the federal bank’s decision on the interest rate
- The fear of a recession or stagflation and the pressure of interest rates on our banking system
Many expect the fed bank to increase interest rates one more time. They could pivot sooner and decrease interest rates. They could do nothing. They could increase interest rates. No one knows. Everyone just has theories. Regardless, their decisions will impact the market.
I think most of it depends on the CPI report in the next three months. If inflation remains sticky, which I 100% believe it will, interest rates will remain high. Leading to the possibility of even more interest rate hikes. The high-interest rates, however, have been throwing rocks at the US and the world’s banking system, poking holes and exposing the issues the banks are having with the interest rates being so high.
Needless to say, we need to get inflation and living costs down. It is just not sustainable. I’ve seen the bread that I used to pay $1.2 now selling for $1.76. That’s roughly a 47% increase.
The Federal Bank will have to make very hard decisions shortly. Their job is to make sure we have the best landing possible so that we do not enter into a recession or stagflation.
In summary, for investors like me, the stock market will look like a seismograph during an earthquake. Some days will be green, some red. There could be a short one-week bull rally which may be followed by a bear environment for the next two weeks. No matter what the market conditions, keep investing in good businesses like Costco, Microsoft, Kroger, etc. Find companies that have strong cash flows to continually increase their dividend. In these conditions, cash is king.
Asset Allocation and Total Income
I have made changes to the allocation in my portfolio. I have lowered my allocation in KO and MO to 2.5%. Increasing AAPL by +0.50%, CMCSA by +0.25%, ITW by +0.25%, MCD by +0.5%, MSFT by +0.25%, NEE by +0.5%, PEP by +0.25%, and TXN by +0.5%.
I lowered KO and MO because I simply want to focus on more growth. Sure KO and MO give me that sweet sweet dividend, but I have a time horizon greater than 10 years. I like this move because I should have a higher total return, better tax efficiency along my FIRE journey, and achieve a higher dividend growth rate at the beginning.
I have learned and thought much about how to tweak and tune my portfolio as I get older. I plan to increase the dividend yield after 3-4 year periods. If I want to retire at the age of 40 or 41, I will need to also have a balance of dividend yield and dividend growth. This will be done by slowly adding in cover call ETFs like JEPI, XYLD, and JEPQ. Increase the allocation in SCHD and DGRO and decrease the number of stock holdings I have to 5-10. There are many ways to go about it, but I am enjoying the ride! I like these moves and ideas and will evaluate the portfolio in the summer or fall.
My total annual income continues to increase, which is exciting! I hope to reach the $500 mark by summer, as I am about to hit the $400 mark! As you can see in the last graph, I am slowly getting there!
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