December 2017 Review / January 2018 Preview & End of Year Review

Happy End of Year Gremlin here to talk about December and the end of this year.  This December has been very busy.  I have completed another professional certification (CSP), dealt with Christmas shopping, run the holiday party gauntlet, and delivered a work presentation.  All while changing diapers and doing all that good dad stuff.  Most positive things should be challenging, so it makes sense that December has indeed been a splendid month.  I expect the hard work to pay off strongly in a monetary, professional, and social fashions.  Part of getting better opportunities are the credentials you have and putting forth a good personality along side of it.

It is also the end of the year.  2017, for all its hubbub and commotion, was good year for me.  Bought a house, had a baby, etc.  My investments and life have a lot of momentum, and the goal is to keep that going into 2018.

December:

This month I added one new position, Leggett and Platt (LEG), in my Roth IRA. 

Last month I brought in a total of $349.36 in dividends ($135.59 taxable, $80.64 Roth, and $133.13 in my IRA).  This is an increase from last year ($262.32 total) by 33.1%.  This total is my new highest ever.  My IRA is now a year old, and my percentages will not look as ridiculous, but the totals will continue to look juicy.

In terms of dividend increases, I realized five this month from McDonald's (MCD), Microsoft (MSFT), Starbucks (SBX), Union Pacific (UNP), VF Corp (VFC), and Emerson Electric (EMR).  The increases range from 1.3% to 20% - most being in the 6-10% range.  This brings my total raises to 50 on the year, with 1 cut and 1 initiation.

Next month I will realize two dividend increases from Realty Income (O) and Disney (DIS), at 0.2% and 11.5%, respectfully. Also one cut from General Electric (GE).

* I only count increases when realized, because until that money is delivered any statements or declarations are simply conjecture.  

January:

The mortgage continues, so at least part of our 'rent' counts towards our house. Our debts currently outstrip our assets.  Outside of our house, we still have very low interest auto debt (1.9 and 1.5% for our cars).  Both my car and house are receiving slightly out-sized payments monthly.  We are effectively eliminating debt, while still building and assets.  Even with a new Gremlin in the lair. This is a long game, and I am nothing if not patient.

I should be making another buy in January in my taxable account.

Next month should produce around $73 in dividends, which is a 3% YOY decrease.  This decrease is thanks the the excellent leadership at GE.

My portfolio page is currently up to date.

2017:

What a year.  So let's look at how I did last year compared to the goals I laid out for myself.

(Results in RED):

• Break $2500 in total dividends.  Fail. $2481 - Ugh dammit.
• Achieve forward dividends for taxable accounts of $1000.  Fail. $926 - Dammit, again.
• Get back into shape, specifically workout 5 times a week.  Mostly a success, I am about 5lbs lighter than I was at this time last year.  Even with the baby I am able to workout 3/4 times a week, so thumbs up.
• Bike to as many local places as possible, do less driving (already half way there as I do not drive to work).  Success.  I usually bike to the train station from my new house (but my bike seat was stolen recently, sigh).  I have biked and walked to the store bunch to do shopping too.

Overall that is a 2/4 success rate.  Not the best performance overall.  2017 had a lot of challenges, a new baby, a new house, etc.  I came pretty close to what I wanted and that is a success itself.

2018: 

So the question becomes what do I attack for 2018?  My main goal is to achieve the biggest swing in net worth overall.  There are two facets to that, first targeting debt and second adding wealth.

• Invest a total of $8000 next year, $6000 in taxable accounts, at a minimum.
• Achieve forward total dividends for all accounts of $3000.
• Keep getting into shape - lifting 2x and running 2x / week and bike to the train station + other places.
• Reduce total spending (after debt payments) by at least 10%.

A huge goal for 2018 will be to invest more and spend less.  This is a bigger challenge than it seems because my wife will not be working in any capacity until August.  We have decided it best for her to stay with the baby for the 1st year of his life, before he gets to spend his days with Grandma.  We both strongly believe this is in his best interest for healthy development.

We are admittedly boring these days, and that is fine by me.  Its cheaper and honestly, I do just as much enjoyable stuff without blowing loads of money.  I believe 2017 was a turning point and 2018 will reflect that.

Hope everyone has a great January and a Happy New Year!
- Dividend Gremlin
- Long all stock tickers mentioned

My Second Double

Investor Gremlin here to talk about the second time a stock of mine doubled in value over its initial purchase cost.  Today, my shares of Westlake Chemical (WLK) broke through the 100% barrier, becoming the second stock in my portfolio to do so.  My position in WLK was initiated at the end of 2016 using rollover 401k funds in my IRA.  Of all the companies in my IRA WLK was added as the "large percentage / low yield grower."  In addition, WLK represented the first materials company in my portfolio overall, which is now augmented by my recent acquisition of Sonoco Products (SON).

Overall the ride with WLK has been pretty wild.  My 45 shares were worth $2500 at the end of last year, and now are worth more than $4500 (original investment was $2270).  I have had a few friends tell me 'time to sell.'  I disagree, I am here for the income primarily.  The capital gains are nice, but I currently do not see the upside in selling without risking future payouts.  I see WLK continuing in its prosperity, and that the price run up is due more to sound fundamentals as opposed to rampant speculation.

What do you think of WLK?

- Gremlin
- Long WLK and SON

Recent Buy, December 2017

Admiring the Furniture Gremlin here to talk about my recent buy.  It has been a very busy couple of weeks going between the holidays, which means breaking down the past one and setting back up for the next one.  On top of that I have several work related functions, including another professional test that are eating into my time.  Not to mention a baby Gremlin with his own demands and needs.  Keeping up with exercising, the market, and everything else I enjoy is harder.  It makes me want to work not only harder, but also smarter so I can get as much time back as possible.  So in working smarter one typically acquires new skills and knowledge.  So here is a new bit of knowledge I am adding to the pile, which will contribute financially:

Today, I added a new position by purchasing shares of Leggett and Platt (LEG) in my Roth account.  I bought 25 shares, with a total cost of $1,159.08 ($46.09 / share, plus commission).  The current yield is 3.12%.  The P/E ratio for LEG sits today at approximately 19.23, trailing.  This is about the same as the historical 5 year average for the stock with the average yield being 3.12% and significantly better than average P/E being 28.07.  LEG boasts a trailing payout ratio of approximately 56.7%.  LEG has 46 years of dividend growth and is a member of the Dividend Champions.  This purchase will add $36.00 to my 12-month forward income.

LEG has provided dividend increases for a long time, and generally averages around 4% dividend growth each year.  LEG is a well known company, so most people probably know what they do.  In case you don't here is a description in their words:

"Leggett & Platt Inc is a manufacturer that conceives designs and produces engineered components and products found in homes, offices, retail stores, automobiles and commercial aircraft."

LEG is my first Consumer Discretionary company housed in my Roth account.  LEG makes mainly furniture, of all shapes and sizes.  The residential and industrial components have plateaued, but their commercial and specialty groups have ballooned.  I believe they will ride those two groups to be a major continuing success.  The commercial group supplies automakers, airplanes, trains, etc. and the amount of those will only go up the more people there are in the world moving around.  In addition, their specialty line fills in a lot of niches that are hard to fill otherwise.

Humans are more concerned about better furniture - make sure it is ergonomic, comfortable, useful, stylish, and portable - and with burgeoning growth in terms of both world population and wealthy segments of that population this growth in success will continue.  Lastly, this is also not an industry I see poised to lose out to internet mania.  Perhaps one day robots will need a chair and an ottoman to rest their feet (or circuits), but now is not that time.

I will update my portfolio page at the end of the month.

What do you think of LEG? 

- Gremlin
- Long LEG