Today I woke up with a big smile on my face. Eaton Vance, my 4th largest position, was acquired by Morgan Stanley for 7 billion dollars. This made the stock shoot up approximately 50%.
Needless to say, I sold about 85% of my shares for a nice 47% gain (not counting years of dividends of course). While I’m happy for the gains, now I do have one less dividend paying stock, haha. On the other hand, I did make over $1000 in gains off of this sale so not bad.
I took some of the money and bought more ITOT, Kaiser Aluminum, and added QQQ to my Brokerage account as well.
In other news, I am very pleased with the way my TOTAL RETURN is going. The value of all of my accounts is going up rather nicely. Last month I was quite surprised with some of my value stocks like Hooker Furniture company, Westrock, and others. They all had fantastic months.
I’m not sure what positions I will be adding to this next month. Chewy, DR Horton, and QQQ are the most likely suspects.
In my IRA account, I did buy just a bit more Universal Forest Products today. With that account, I think ITOT and QQQ are about the only things I want to buy more. However, I may add some to Virgin Galactic, just for a risky “bet” as it has been very kind to me so far.
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!
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 is my latest youtube video where I detail how my GROWTH stocks are killing my DIVIDEND stocks. How are your dividend stocks fairing in this Coronavirus Correction? I’ve had THREE Dividend cuts and that sure hasn’t helped things
My top performers continue to be Fortinet, Netflix, and General Mills.
I am up over 30% in each of these. I’m up almost 40% in Fortinet in a super short time (only 2 months!). General Mills I’m up in because I bought it starting Christmas Eve of 2018 and by the time I count the dividends I’ve gotten, my total return is over 40% on this stock. Netflix continues to outperform; I just hope that price appreciation continues.
In this video, I also detail why I am buying ITOT and QQQ over NOBL and DGRO. In summary, a basic Total Market ETF outperformed ETF’s that focused specifically on Dividends. Focusing on dividends led to increased risks and a weaker performance. One line often touted by Dividend investors is “Dividend Investing performs better during bear markets, it is safer.” However, what this correction is proving is that it is NOT necessarily safer. Currently over 33 companies have cut their dividend. Imagine relying on that dividend during retirement? Not good!
I am continuing to buy QQQ and ITOT a little bit each week. I also plan on increasing positions in Marten Transports, Chewy, Eaton Vance, and perhaps Mcgrath Rentcorp. I think these stocks still present incredible growth opportunities and I’m thinking LONG-TERM here.
As usual, I will repeat the old mantra, timing the market is difficult. I think there is nothing wrong with sitting on the sidelines for a bit, but I want to get that money working for me as quick as possible.
One question I keep seeing all over the internet is was March 23rd the bottom? Well, that remains to be seen. Maybe, maybe not.
I am of the opinion that the market could keep going up and that COULD have been the bottom. At the same time, we could also go lower from here.
At the same time, I can’t say I care one way or the other. The majority of my investments are on a 5-20 year timeline. All that matters to me is that the prices we saw in January are not the highest we will EVER see again. I expect that we will get back to All-time highs and go higher after this is over. The pressure is building and when we hear good news, I fully expect the market will rally like never seen before. I won’t be surprised if a rally occurs faster than most people expect.
As long as the market is up higher than the current ATH during your investment horizon, you are getting dividends, reinvesting, making regular contributions, then the current market conditions are not something to worry about.
How is the Coronavirus itself looking?
We are now seeing a slowing of Coronavirus cases in Italy and Spain. Cases are increasing under 3% and deaths under 4%. This is reassuring. Who knows how long it will be until those economies open back up. However, we are seeing a move in a positive direction. Here in the states, we are still seeing an increase of 8.4% in cases and a whopping 18% increase in deaths today. We have a ways to go, especially here in Georgia, where I don’t believe we adequately prepared for this. Our governor is a bit of a disappointment.
I think life as we know it will probably change until the end of the year. Things will gradually open up but we will all be cautious of going to a crowded concert or restaurant again. Who wouldn’t be???
I have largely been staying in, only to go out for mail/groceries and a rare walk (most places are closed). My fear is not the illness itself but perhaps the medical bills that come with it. My greater fear is having it, not knowing it and giving it to my elderly mother who is an extremely high-risk case here. These are the things that linger at the back of our minds as we face this. My wife’s job has been TERRIBLY affected because she is a full-time musician who depends on gigs for a living. Imagine all of your work gone in a blink of an eye. Myself, I am lucky that I do mostly online teaching anyways and my business has even increased due to the virus.
I fear what will happen to the country during this downturn. So many small businesses could go under here. I see LOTS of businesses over leveraged, borrowing more so they will be “prepared” if this goes on longer.
Anyways, what moves have I made this week with my buying and selling?
1)I keep buying Stanley Black & Decker. I am up an incredible 42% in one tranche I bought, not even that long ago. Of course, I keep buying, so overall I’m up something around 18% in the stock. Nice Dividend Aristocrat and solid company LONG-TERM
2)I am taking nibbles at ITOT every couple of days. I am NOT trying to time the bottom here. I am sticking to my plan of buying anywhere near 2400 and under. I am also buying smaller portions at 2600. I think these are decent entry points long-term.
3)I am gobbling up QQQ on any dips. I think this is a SUPERB ETF to be in. It is less exposed to things like restaurants, hotels, and cruise lines. It is tech-heavy, but I am fine being tech-heavy during these times.
4)I bought Lowes for a SWING TRADE. I only made around $24 bucks off of it but I only held it like three days. I continue to play either Home Depot or Lowes for weekly Swing trades. I like these stocks for swing trades, because I am fine holding either long-term if I can’t get out of my trade quickly for a profit. I made around 8.4% off of this trade. Last week, I traded Home Depot in my IRA account for even a greater profit. I think THIS is the type of market to swing trade-in. You will see tremendous volatility, swings of 8-10% in one day. Why not take advantage of it to go with your long-term investing??
5)I am still playing the TRUCKING SECTOR as I feel these stocks were already beaten down prior to the crash and are holding up well. Marten Transports is one that continues to perform well. So far, up over 8% in the stock over the course of a few days.
As always, here is the YOUTUBE video discussing Some of this: