Friday, August 28, 2015
And then August 21st and 24th happened. The stock market tumbled double digit percentages, with some wild swings throughout the days (especially on the 24th). Speaking with a few friends who lamented their holdings lost 15% of their value. That might have been true of my holdings, but as of today's check my total account value is only 5% below what it was to start the month out. Now don't get me wrong that sucks, but it is not the end goal. Dividend income is the goal, and depressed prices are merely opportunities that provide better entry or averaging points from which I can take advantage of in my long term investing. Naturally timing the market is not always possible, especially with work that has me out of the office. So the goal is to be prepared for the long haul, and exploit these chances if able.
Last month I brought in a total of $67.45 in dividends ($18.18 taxable , $49.27 Roth), pretty much as expected. This is a increase from last year ($61.75 total) by 9.23%. Not my best increase, but one nonetheless.
In terms of dividend increases, I realized one this month; Kinder Morgan (KMI) with a 2.08% increase. KMI has been killing for me, I hope to see the trend of KMI raising quarterly payments continue as it has for 2 years straight now! No new raises were reported.
In my Roth account, I initiated a new position with Exxon-Mobile (XOM) by acquiring 14 shares. As with prior months I continued my Loyal3 march towards Financial Independence. I added approx. 2 shares of Microsoft (MSFT) and opened new positions in Wal-Mart (WMT) and Hershey's (HSY), with just above one share each. Going forward I will be doing short monthly posts on my Loyal3 Buys, it will keep purchases more streamlined in my head and allow me to shorten this summary section.
My only long term debt is my car, which continues. I have already gotten ahead on my monthly payments, and I will continue pushing that direction. My work life looks to have me traveling to Ohio this month, but in my personal life things have died down. That can only be described as financially awesome and relaxing. I hope to have a review of a local brewery next month along with my investment stuff. Also I am going tubing tomorrow, so between that and work, I needed to get this up before those things happened.
Next month should produce around $76 in dividends, which is a 21% year-over-year increase. I expect to realize two raises next month from Kellogg's (K) and Target (TGT) - which is in both Roth and Taxable. On the Loyal3 side, almost every stock is on the table after the drop, I plan to put a solid amount of capital to work here.
Hope everyone has a great September!
- Dividend Gremlin, CHMM
- Long KMI, MSFT, WMT, HSY, K, TGT
Monday, August 24, 2015
Could this be the start of another recession? Who knows, in reality no one does, but one day in the future we will be able to look back and see. Perhaps this event will just be tied in with the 2008 decline; starting some sort of economic crisis period. Maybe not, it could be this dip precludes an era of industry we've not seen in twenty years. Possibly historians will determine that this point in history has proven that economic cycles are moving faster due to technology, meaning that the business cycle is not a long wave any more, but rather more fast moving and complex. One thing is for certain is we do not know how tomorrow will unfold.
We may not know what the future holds, but we can certainly take advantage of the now. It is my firm belief that time in the market is more important than timing the market. I am not the only person who thinks this; if you scan sites such as The Dividend Growth Investor or Dividend Mantra you will see this being spoken of and playing out in real time. In fact, Dividend Mantra currently has an article up on the topic at the moment. The timing could not be more apt!
That being said, if you do find yourself with a nice set of entry or cost averaging points, get excited! In the long run it is time in the market, but every extra percentage you bring in with your dollars now will save you that much more in the future. So the question is now what am I looking for in this mini correction?
If I had a lot more capital I'd be drooling, but at the moment I am caught between a few things including waiting for my wife to start her new kick-ass job. So currently I am shouldering our lives, but that is not to say I am not going to seize the day. Once her job is rolling things will be much easier. My interests are targeted to my Loyal3 taxable account. A massive share sell off would finally make a lot of those stocks favorably priced. My current holdings (rapid fire) are: AAPL, DIS, DPS, HSY, K, KO, MCD, MSFT, PEP, TGT, UL, VFC, and WMT. Of those listed only TGT and VFC are not currently of interest to me; this is due to TGT being a strong enough position at the moment and to VFC needing to drop further in price. Outside of that my positions in AAPL, KO, MSFT, and UL are large, but may see minor additions.
Going forward I am looking to deploy some capital into DIS, DPS, HSY, (kind of) K, MCD, PEP, and WMT on weakness. DIS, HSY, PEP, and WMT lead the charts. I might select only a few of the companies or spread around a small amount of capital in each, which is feasible with Loyal3's fee free status.
What will you do? If I had more capital I would actually be targeting big industrial, financial and energy companies that are getting torched. Not only are they getting burnt, it appears to more of a guilty by association reasoning. Possibly some people are over reacting and going cash heavy, with the expectancy for a real collapse on the horizon. Either way, these are the kind of moments that only happen so often and are worthy of action.
What do you plan to do in the market?
- Long all stock symbols mentioned.
Monday, August 17, 2015
I have been eying a wide variety of companies for this move, because there are so many good opportunities in the market. To say the least, this was a hard choice to make. On one hand there were a lot of nice financial and industrial companies sitting out there undervalued. However, once in a while you see the price slashed on quality items and that only comes along once a decade or less. For this reason I enhanced my holdings in the energy sector.
Today I seized the initiative and acquired Exxon Mobile (XOM). I received 14 shares at $78.85 / share, with a commission of $6.95. The current P/E ratio is approximately 14.01 and yield is 3.73% (on current cost). Looking at past dividend payouts, XOM has managed to double payments approximately 7-9 years on average. Looking through all of the statistics on XOM it is easy to see these guys are a juggernaut. This purchase adds $40.88 to my forward 12-month dividend income.
Despite the great numbers in terms of ratios and history, this was still a hard choice to make. Oil has been roughed up quite a bit since the start of the year, and there is no way to expect that to end immediately. Many oil companies sport super high payout ratios, though XOM is currently sitting at a 70+% payout ratio and is generally considered to have one of the lower payout ratios. Their dividend is extremely well covered with current profits and cash on hand for years to come. Even with these concerns, there is a reason XOM is a 5 star pick on Morningstar.
Oil is not going anywhere anytime soon, it just isn't. Naturally when people think of companies like XOM they think gasoline, kerosene, and diesel. Few people remember all the other industries impacted such as cosmetics, plastics, etc. The value of XOM is so much more than the oil flowing from wells into refineries to us, the end users. XOM has tendrils everywhere, advanced materials, alternative energy, so on and so forth. Without a doubt, XOM is now the single largest company in my Roth, in fact the only Mega-Cap company.
On another interesting side note I have initiated a new Loyal3 position as well with WalMart (WMT). It is small at the moment, but Loyal3 has been growing rapidly for me, and there is no reason to suggest that will stop.
I will update my portfolio page at the end of the month, keep enjoying August everyone.
- Newly long XOM and WMT!
- Long KHC and CB
Friday, August 7, 2015
In my travels I got to visit two breweries, and though sadly I could not try every beer, I got to try a good bunch. Also fair warning, most of these are probably hard to get in general, and I have never seen them 3 states away, so this is more of a 'if you get the chance to visit' sort of post. So without beating around the bush, here are the reviews.
CB Craft Brewers (http://www.cbcraftbrewers.com/):
These guys started out as a contract brewery and branched out after. While I was there, I tried both their beers and some of the ones they made on contract. In general CB offered a lot of high percentage beers, especially on the IPA front. IPAs are their flagship in general. My two favorites IPAs were their Silverback Double IPA and their contract GC "Fat 20" brand IPA. Their current list is found at here, but sadly I do not remember the name of the GC brand IPA. Of the ones listed it was my preferred. My other favorites were their Scotch style ales including CB's MacBubba and the contract Roger's Hound Dog. The last one was by far my favorite drink on tap. One of my coworkers was along for this ride as well and recommended the Three Head "The Kind", another IPA. He is primarily an IPA drinker, so I would take that as a good recommendation. Overall a good spot with a nice bar and reasonably priced tasting. I would heavily recommend it.
VB Brewery (http://thevbbrewery.com/):
I know, what are the odds we would go to CB and VB? Well anyway, this was our second stop and the tasting was little less comprehensive than the first. Sadly they were out of my first choice, which was a Belgian style ale. This brewery was also very heavily bent towards IPAs, with a full 1/2 of their choices being IPAs. Here is their current beer selections. My coworker concentrated on the IPAs, and found them not to be up to the level of the prior brewery, but this may be due to drinking too many bitter pours. We both agreed that their #6 Petite IPA was one of the better IPAs we've had. However, I found that #7 their Black Magic IPA was probably a head better. I also tried their number's 8 and 10. 8 was decent, but 10 was disappointing. At both breweries I tried a brown ale, and was not very impressed. Typically I find that type excellent, but not these.
Both are in nice spots, in or near very nice small towns. IPAs and Scotch ales seem the way to go. If I had more samples I would have added the Altbier at the first place and the #11 at the second place (which was the not available of course when I was there!). However, I feel there is a little too much focus on IPAs in general between the two.
My coworkers on this job are a true cast of characters. One of them was discussing money with me, specifically how much he had made on some past jobs. It was mind boggling, he was throwing out that as his bonus on some jobs he was making as much as some people make in a year. Don't get me wrong, he is good at his job. However, it appears he is very strongly fitted to that work hard - spend hard hedonistic treadmill. Yet, he still complained about work and travel a lot.
He has been working for a long time, I get the complaining, but he also makes a pretty great paycheck. Perhaps he loves his job, but then why is he complaining? Truth is he probably could solve a lot of his problems through DG-investing (or similar) and living a more frugal existence. Frugality does not make life any less enjoyable. No more dragging your progressively aging and aching body to a job that you may not care to do. Considering his salary, he could have quit years ago with cash and time to spare and spend as he deemed fit. Instead he is worried about the things at home he is missing and the fish he sadly is not catching.
For these reasons, I pushed myself even harder being here to save a few bucks and make some new investments. This gladly brings me to the conclusion that I have opened a position in Hershey (HSY). It is a small Loyal3 slot, but I hope to really expand it over the next few months and I plan to add Walmart (WMT) soon too!
I hope everyone is safe and having a great August.
- Long HSY