- Chasing Dividends – Do not chase DIVIDENDS. You will Underperform the market. Look at the following ETF’s-ITOT vs NOBL vs DGRO. You will find that taking on the additional risk of a concentrated dividend portfolio did not provide you with any additional rewards this year. The more you focused on dividends with those ETF’s, the less your return was.
- Cut losers Faster- Tax Loss Harvesting is a real thing. If a stock falls 15%, don’t be tempted to keep buying. Get out of the stock and move on to something else. I am talking INDIVIDUAL STOCKS not Mutual Funds or ETF’s. Things like total market funds/ETF’s are meant for buying and holding.
- Buy into strength not weakness – This was something I learned that immediately improved my returns. Don’t always buy the dip, buy stocks that are moving higher via strength (momentum if you will). Stocks that are going up often just keeping going on. Meanwhile, stocks that are losers, often continue going down for very long periods of time. It has been my experience that chasing TURNAROUND KIDS are simply not worth it. The amount of time you hold them before they turn around is a HUGE opportunity cost.
- Buy and Hold with Individual stocks doesn’t always make sense. If you just had a year of 30% returns, why not scrape a little off the top? It is not winning until you take something off the table. If a companies revenues and earnings are still growing strong, it may make sense to buy and hold for a long time; however, if you see them start to slow, it MAY be time to sell a little bit.
- Pick LESS stocks – I see investors pick 40 individual stocks. I’m sorry, but if it takes 30 stocks, then you are doing it wrong. You should not need that many stocks to be diversified. This is partly why a total market ETF or fund should be the meat and potatoes of your portfolio. Pick a few strong stocks to JUICE your returns. I’m still trying to reduce my positions a year later. It has been proven past a certain point, you are now over diversified, and aren’t adding anything positive to your returns.
- Swing Trading is ok if you don’t risk much and you limit yourself to doing it a few times a month. If you MUST swing trade, no, you don’t always lose. In fact, I don’t ever remember losing on a swing trade (only on buy and holding). Just use very small positions and pick stocks you will be okay holding if your trade doesn’t work out. Yes, as a general rule of thumb ACTIVE investing underperforms PASSIVE investing. However, that doesn’t mean you can’t have a little fun with stocks if you enjoy it, just be sensible. Many people get addicted to gambling and such and can’t be sensible.
- Avoid Retail company stocks that are in the mall. The biggest loser I’ve bought is American Eagle Outfitters. Trust me when I say, Wall Street does not like these apparel/clothing stocks. If it’s not Target, Wal-mart or LULU then buying a retail stock is a losing proposition. You could invest in most any other sector and come out better.
- Sector ETF’s will most likely underperform. I’ve owned Healthcare Sector funds, country ETF’s and they ALL underperformed a boring total market ETF or QQQ. They are usually not worth the additional risk. QQQ that is heavily weighted towards tech is really the only exception I’ve found so far; however, even it holds more than just tech stocks.
- Don’t spend too much time eyeing your portfolio. Go get to work making more money. Your returns are basically decreasing if you spend hours each day looking at your brokerage account (BEEN THERE, STILL AM THERE SOME DAYS!
Category: Index Investing Page 1 of 4
HERE IS MY JUNE BREAKDOWN
- Adsense $4.96
- Amazon Affiliate $2.82
- Skillshare $9.21
- Digital Products $24.50
- Patreon $76.81 (Before Taxes)
- Teachable $9.21
- Dividends $12.33
- Dividends in retirement accounts $101.21
- Swing trading $37.06
TOTAL PASSIVE INCOME (NOT COUNTING RETIREMENT) $197.35
TOTAL PASSIVE COUNTING RETIREMENT DIVIDENDS $298.56
Some notable improvements, last month I had ZERO Digital Products and Amazon Affiliate income. So even though they are small amounts, it is a positive movement. Patreon, like last month, continues to be the outperforming. My swing trades for the month include ROKU and FACEBOOK, both over an 8% return.
My DIVIDEND BREAKDOWN:
Putnam Municipal Income CEF (PMM) $.26
Marten Transport $0.20
In my Traditional IRA:
The MAIN thing I’m doing is contributing more and more into ITOT (A total market ETF). I am also selling small portions of VALUE/DIVIDEND stocks like Westrock, Medical Properties Trust, and American Eagle Outfitters.
I want to increase my positions in growth stocks like Chewy, Fortinet, Akamai, and Marten Transportation.
I’m also buying small portions of the gold ETF, IAU. I think Gold still has a little bit more to run before another pullback.
The two main ETF’s I’m buying this month are QQQ and ITOT. QQQ is weighted towards the Nasdaq and technology. I think during this Coronavirus crash, weighing heavier towards technology is a wise move. So far, it has paid off quite well.
I just added $400 to my ROTH IRA and $500 to my Traditional IRA. In addition to the above ETF’s, I’m also buying these individual stocks-Universal Forest Products and Chewy. I am up over 25% in Chewy, it is of course a growth stock. Chewy is a company that specializes in pet foot delivery. We use their services and see Chewy boxes all around us via our neighbors each week.
In this video, I discuss these ETF’s and bring you my dividend report SO FAR for the month of June **More Dividends to come!**
So far, my DIVIDENDS are as follows:
Stanley Black & Decker $11.04, IEF $0.61 for a total of $11.65 in my TRADITIONAL IRA
PMM $0.61 in my BROKERAGE. Lots more DIVIDENDS to come in this account!
In my ROTH IRA, VBILX $6.77
I’m FINALLY able to add to my accounts this month, so, I’m looking forward to watching that money grow in the market.
I am currently sitting at 6%; one of my short-term goals is to get my total market ETF’s/Index Funds up to 25%. I also want to continue increasing my position in Chewy, Universal Forest Products, Marten Transports, and Fortinet. I feel strongly that these stocks are going to GROW big over the next few years.
Lastly, I’ll briefly mention my Swing Trade for the month. I am swing trading ROKU. This won’t be a long-term hold for me, I’m simply looking for a 8% gain. I am sitting at 2% right now, holding a bit longer. Update later!
Here are my DIVIDENDS for the month of May. If you’d like to compare to last month, here you go:
First up is my BROKERAGE account, here they are:
Putnam Municipal Income Closed End Fund paid me 0.13 cents. Ha, if you haven’t seen my post before, I bought into this over a year ago and completely sold out of my position BEFORE the crash. Now I’m diving back into this one with small doses. This is free from Federal Taxes and pays over a 5% yield, so great for the brokerage account. Now I just have to get that percentage up there.
General Mills-The very first individual stock I ever bough. It paid me $16.66. I LOVE General Mills, it’s still looking good and have no plans to EVER sell this stock
Ennis paid me $29.48. This is one of my heavier positions in my portfolio. I actually sold just a little bit of Ennis this month, so that amount will most likely be less next time. I just felt like I was overweight in the stock and wanted to take some of the gains off the table to put to use elsewhere.
Eaton Vance is one of my absolute FAVORITE Dividend stocks. It paid me $23.63. This DIVIDEND ARISTOCRAT is a great addition to any portfolio; it has dividends, growth and presents a great value opportunity at these prices.
Westrock-It paid me $10.60. Westrock recently slashed their dividend so we can expect smaller payouts like this from them for awhile.
These brings the total up to $80.50 in my BROKERAGE account.
Now a quick look at my Traditional IRA:
Lowes paid me $1.65. I swing trade Lowe’s so this is not a permanent dividend.
IEF (Intermediate Bond Fund) paid me .64 cents
My cash account threw me .01 cents, haha.
So a very small total of only $2.30 in my IRA. Keep in mind that dividends are not really the focus of my IRA (or brokerage for that matter), so some months will be extremely small amounts.
Going forward into June, I had some money I took out of the market to pay about $1000 extra on my car loan. So, I will be getting a little bit less dividends in the following months. However, this will be short-lived and I’ll be back on the income/cash flow train again shortly, headed up.
Thanks for tuning in and as always-I’m NOT a financial advisor; I am simply sharing my journey here.