July 2019 Portfolio Analytics
First, here is the portfolio's VALUE BREAKDOWN, with:
1. Total Capital Invested (not including reinvested dividends);
2. Total Dividends Received; and
3. Capital Gain (from price appreciation)
I added $241.81 (not including reinvested dividends) to the portfolio in the month of July, bringing my raw invested capital to$4,216.22 from $3,974.41. I wrote on July 1st that we were seeing new highs in the S&P and that we may reach 3,000 very soon. Well, we finally did it and then some before the month's end. I also wrote that I expected the market would likely move sideways around 3,000 for some time, which did indeed occur for all of July's latter half.
By the close of July 31st, the market has pulled back some. I could see the S&P500 revisiting 2900 this August, giving dividend investors good buying opportunities.
Still, I'm very happy with the portfolio's performance, with a total return of 6.76% and an annualized return of 17.41% (see below).
My BENCHMARKING shows that I'm lagging the S&P500 by 1.94%, another improvement from last month's 2.26% and two previous months' 3.09%. Cyclical stocks are starting to take the lead, and since I am heavy on cyclicals (financials, tech, industrial, discretionary), the gap between my portfolio and the S&P should narrow further.
Primarily financials and semi-conductor stocks look to be gearing up, which is a good sign for continuing the bull market. In the meantime, I await consumer staples, utilities, and other defensive sectors to approach better valuations, so I can initiate positions in names such as Procter & Gamble (PG), Dominion Energy (D), and Southern Company (SO).
At the close of July 31, 2019, hypothetically investing in SPY with equal raw capital would have rewarded me with a total market value of $4,588.64. My portfolio's market value ended the day at $4,501.29.
Now, let's take a look at the SECTOR distribution and performance in my portfolio.
The Financial sector remains the heaviest weighting in the portfolio, taking up 18%. All of my buys were initiating new positions in Johnson & Johnson (JNJ), Raytheon (RTN), and Simon Property Group (SPG).
I'm very comfortable with my overall sector diversification, but I'm eagerly waiting for better prices in defensive sectors. Currently, Consumer Staple makes up only 4.7%, of which contains two stocks that I consider higher-risk than your average stalwart defensive names; and Utilities is the only empty sector in the portfolio.
The best performing sector is Technology with an unweighted average performance of 29.59% (including dividend returns) across the four stocks in the sector. I'm very happy I added to this sector in May, while it was feared.
Next, let's check the average performance of stocks based on their DIVIDEND STATUS.
Dividend Contenders are leading this month, against the Initiators from last month. I'm also happy to see SEVEN of my Challengers move up to Contenders as they reach that 10-year mark of consecutive dividend increases. Those names are: Blackrock (BLK), Comerica (CMA), Eaton (ETN), Home Depot (HD), Lithia Motors (LAD), Magna (MGA), and PetMed Express (PETS).
My new additions to the portfolio were: SPG - Challenger, RTN - Contender, and JNJ - King.
The INDIVIDUAL PERFORMANCE of every stock in the Solid Dividend portfolio:
I now own 43 stocks (from 40 last month) and am positive on 30 of them. That represents an accuracy of nearly 70%. Famed investor Peter Lynch once said that a 60% success rate is more than enough to beat the market in the long run. Therefore, I'm very happy with 70% and hope I can actually put Peter's statement to the test in the very long run.
My best performing stock continues to be Lithia Motors (LAD). It continues to chug along and has made new all-time highs. Here is the recent quarter's financial statement. They continue to grow their business at a remarkable rate (especially for a non-tech) and beat analyst expectations.
The SOLID DIVIDEND End of July Snapshot
Annualized Return
Since I only started investing 8 months ago, there are still a lot of price movements that need to be digested over a longer period of time (whether up or down).
But at the moment, my portfolio has an annualized (or internal rate of) return of 17.41%, which accounts for the different time periods I invest.
If I continue picking good businesses at appropriate valuations and I'm patient for moderate market pullbacks, I expect an annualized return of above market average, which on the extremely long-term is 9.8% (not accounting for inflation).
As a long term dividend growth investor, I'm excited by what lies ahead!
Waterfall Chart