Investing next to traders,

At the start of May, my savings portfolio scratched the magical $ 1,000,000 mark.  This wasn’t the first time it happened… the first time was a short lived period last August, at the market top. By the end of May, my portfolio was back down to $987,000.  Despite this play on my emotions, my projected dividend and interest revenue for the year is up to $44,911.

The drop in value in my portfolio illustrates the annual ritual of « Sell in May and go away ». That is, traders sell their stock positions in May and take the summer off before returning to the stock market in September.  Therefore, with traders not as active buying stocks, demand for stocks goes down and so do prices.  For me, this creates a great opportunity to use my monthly dividend income to add to my existing stock positions but at lower prices.  Everyone loves a sale!

A happy coincidence is that June is a big dividend and interest harvest month.  This year, I will collect $8984.  Therefore, as the dividends roll in, I will redeploy the cash I received into adding to my existing stock positions.  I will refer to my 2019 stock allocation to help me decide which stocks to buy.  Note that as far as funds allocation is concerned, it is not complicated for me… American stocks.  They are presently under represented in my portfolio.

———————————————————————————————

Last week, the market lost interest in the fixed income market as the market expects interest rates to go down later this year.  Therefore, my interest rate reset preferred shares, which do not like decreases in interest rates, took a dive.  I guess we’ll see come fall.

In the mean time, my preferred shares are yielding dividends on schedule.  Their combined annual yield is 7.22%.  Although all the stocks are presently “under water”, my primary goal for these is dividend income.  So, as far as any capital loss is concerned… I will let my heirs worry about that.

Until next month,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s