My Investing Journey with Passive Income, Stocks, and Cryptocurrencies!

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BONDS at MAX BEARISH MOMENT

I’ve recently started adding more bond funds to my portfolio. I haven’t done this in about two years now.

This goes against what everyone is saying, it’s assumed both inflation and interest rates go higher from here. Many believe that since the interest rates are already so low, that the upside on bond funds is seriously capped.

However, a few things:

1)The FED is still buying over 80 billion Treasuries a month and has committed to doing this. This will drive interest rates down if it continues at the same pace. My prediction is the FED continues to buy more until it owns an even larger percentage of the Treasuries market (reducing supply).

2)The 10 year is at 1.45% as of today, it can still fall back under 1% and lower. Keep in mind the low last year was around 0.5% I believe people are wrongly discounting that this can’t happen from here.

3)Intermediate and Long-term Treasuries have a NEGATIVE correlation to the stock market. They offer protection and cushion to the OVERALL PORTFOLIO performance.


SO WHAT DID I DO?

I started a new position in TLT. As far as bonds go, this is of course the most risky move, as it is the long-term duration and most sensitive to interest rate rises. On the other hand, it’s the one that stands to earn the most if interest rates fall again. I believe they will.

Just a quick mention, I bought TLT back in December of 2018 and rode it for some INCREDIBLE gains all the way until the end of 2019. Remember this is where the FED tried to raise rates but it caused the market to correct and they were forced the other direction.

My prediction is that something similar will happen over the next year or rates will go LOWER from here. I have no way of knowing for sure, but I suspect some of the inflation we are currently seeing is transitory as the FED has said. Much of it is due to supply line issues, and in some cases, not enough workers available to do the job of getting all of the materials.

I’m also still adding to my VBILX position in my ROTH IRA. This is an intermediate bond fund I’ve had for about a year and half now. This is a much safer choice, although it has a yield of over 2%. This is because the quality of bonds it invests in is a bit lower. VBILX is pretty close to a “cash account” like a savings with minimum downside. To reiterate the risk here is the return gets eaten by inflation.

I will end by saying I don’t think bonds like TLT are something you buy and hold forever. I do strongly believe bonds have a place in anyone’s portfolio and I can’t see myself ever getting rid of them.

“You can’t time the market” is a saying commonly reiterated. Yet, by not holding bonds, one is timing the market. They are assuming the insane bull run of the last decade will continue, they are assume bond yields MUST rise. However, we are in uncharted territory as a nation with the FED expanding is balance sheet to unprecedented levels, with valuations of some stocks at insane levels, with demographics and political tensions we haven’t faced before. Who knows what will happen from here? I don’t. That is why I’m choosing to hold bonds regardless if most are speaking out against them.

QQQ ETF is Fantastic | My Portfolio

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!

New Moves for October

My first move of the month was I bought Westrock #WRK, my price was $34.82. This gave a dividend yield of over 5%.

I then bought 12 shares of Sterling Construction, this was one of the smallest lots of stock I’ve ever purchased but with no commission fees and having a little over $100 in my cash holdings this made sense. STRL has had a dramatic rise in price target due to a recent acquisition.

I bought some more shares of Eaton Vance. It has a earnings report here in a few days, I look forward to seeing how the report goes. However, either way, I’m yielding over a 3.4% dividend from these purchases.

I sold ALL of my TLT shares. I seldom sell things. However, I just kept thinking about how low-interest rates have dropped, how much I’ve already made from bond funds. I don’t see them running up another say 10%, so I took my profits. I used these profits to buy the Westrock and Eaton Vance shares.

I had very little cash left in my brokerage account (around $600 I believe). So I split this up buying shares of Darden Restaurants at $108, Quest Diagnostics at $100 and lastly General Mills around the $51 mark.

These were not my ideal prices but rather than just leave the money laying in the cash account I wanted to immediately put it to use. I fully accept I will buy at both low and high prices over decades of investing. Really the only one I wished would have went lower is Quest.

Quest recently had a pretty good earnings report, much better than their last one. I think it has a long way to run. It’s also been quite stable and less volatile during all the trade war turmoil. So that gives me confidence in my purchase, even though it does only pay slightly over a 2% dividend.

Swing Trade-TLT Bond ETF

I bought TLT multiple times throughout May and and starting selling in July. This was a swing trade I made.

I missed the very top; however, I am happy with my trades. I try not to get greedy and simply desire to make over a 6% profit on these types of shorter-term trades. I am primarily a dividend or buy and hold Index investor. At the same time, sometimes I think values exist that allow an investor to turn a quicker profit as well. A profit that one can use to reinvest.

TLT has had an incredible year, over 20% YTD return. My trades were a gain of 6%, 14% and 12%. This is not counting distributions I received from TLT (So not total return), it’s simply a guesstimate of how much I made. I usually think about those numbers at the end of the year!

I expect that interest rates will continue to drop and there MAY be a reentry point on TLT for me before the year is over. However, I am not counting on it. TLT could very well make a new all time high in the next month depending on what Jerome Powell and the FED reserve do here.

I do still have about $600 in TLT for risk management purposes. It’s not a position I wanted to close out completely as I think Bond Funds should always hold a place in a portfolio, unless something terrible occurs. Let’s hope not!

As always, I am NOT a professional financial advisor. I recommend seeking professional help before making any investment and doing your own research. This blog is for my own archive and entertainment purposes.

August-Dividend Income Breakdown

My August payout brought me one new dividend income stock. That stock is the DIVIDEND ARISTOCRAT, Eaton Vance. I currently have fewer stocks paying in August month than July so a slight decrease this month compared to last month.

Dividend Breakdown

Putnam Municipal Closed End Fund- $4.80

I purchased more PMM this month so this number will be higher starting next month. PMM pays me monthly.

General Mills-$10.29

General Mills was the very first stock I bought.

TLT-$3.17

I did sell a little TLT this month as I was up over 16% in it. I used this to buy more dividend stocks

Ennis-$24.30

Ennis is one of my top 3 stocks and one of my largest positions.

Kaiser Aluminum-$3.00

Eaton Vance-$10.50

TOTAL DIVIDENDS FOR AUGUST = $56.06

This group of stocks paid $24.70 the previous payment. So I have increased my total payout for this quarter by over 100%. I look forward to increasing my dividends further.
Traditional IRA account

TO BE REPORTED at the end of the month

Below you can see the progress my Dividend payouts are making. The blue line represents my brokerage account, the last point is this months payment. The yellow line represents the total amount (not calculated for August yet!). The red line is my IRA; this is largely index funds. I’m making good progress here. The most important part of any investment plan is to stay consistent. I’ve added to my portfolio each month since Novemeber, hence all of the growth.

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