10-04-2022, 07:22 AM
September Portfolio Update
This was a more active month so this update will be longer. I get busier during market declines. I'll have something that's fulfilling its purpose but something else will drop to a nice buy level that would serve that purpose better. Plus I retired some money and unlike past months this was not just a little to live off of but a chunk.
The big withdrawal from my Taxable Account included a little to supplement my dividends and live off of. The big one was to pay the taxes on my big IRA-Roth conversion from August 1. Unlike past months which didn't have a big impact, this one did. Without that chunk of change taken out my Taxable Account - and overall - value decline would have been about the same as for the IRAs. Part of the point for tracking this is to demonstrate, hopefully, that I can continue to increase investment value despite periodic withdrawals so I'm not adjusting losses to reflect that.
After some debate I decided not to do calculations which involved the June LYB special. If I had I'd need to include a qualifier which is just a pain and one I'd need to keep doing until next June. So that nice little bonus isn't in the comparison numbers.
Here are the numbers.
Metric IRAs Taxable Total
Buys 2 2 4
Sells 1 2 3
Dividend Increase
over September, 2021 412.51% -4.80% 47.60%
Dividend Increase
over June, 2022 1.16% -9.67%* -5.34%
Change in value
over 8/31/22 -8.88% -12.28% -11.43%
Current Dividend Yield 1.86% 3.39% 2.60%
Change in 12-mo
projected Dividend
Income fr 8/31/22 1.29% -2.60% -1.15%
Organic/Internal
annual DGR 14.74% 10.88% N/A
As has been the case, and will be for another several months, the comparison of IRA and total dividend numbers from a year ago are meaningless. From 3 months ago they do mean something.
I have cash sitting in my Roth and my Taxable Account. I have not yet bought something with the OGE sale proceeds.
Taxable Account Transactions
Sales:
Buys:
Roth Transactions
Buys:
IRA Transactions
Sales:
Buys:
For these transactions, I have not "liked" VZ since the last ER. There are just no growth prospects. Now I expect it will keep paying its dividend with minimal annual increases for some time. But with the drop in prices, some other companies were yielding to the point where trading a bit of current income for stronger dividend growth seemed to make sense. I bought WHR, yielding over 5% with some of the proceeds.
Tax-Loss Transactions: For the rest I bought BBY which is a different sort of deal and a repeat of something I did earlier this year. I have some shares bought at $95 and above. I bought that number of shares for $68 - was hoping for $65 and gave up waiting, gave up a little too soon - and once the wash sale period is up I'll sell my higher-priced shares for the tax loss. Then I'll use that cash for something else. I also banked a tax loss on VZ as I sold shares bought at $48 and above.
I still have a little VZ left and let's just say that if the market stays low or heads down further, those shares are in peril.
With its latest announcement OGE had given two very small dividend increases in a row and there are companies yielding as much or more with much stronger growth. I have not yet used that cash to make a buy which is a major reason why my forward 12-month dividend income shows a decline. For now I'm waiting to see where prices drop to. My watch list includes AVGO - at $410, EMN, TROW and WHR. But others could come into play if their price drops enough.
In the IRA, DG has been one of my strongest performers since buying in February and March. Foolish to sell, right? Maybe but as with VZ, other companies I liked had dropped to levels where I wanted them. I initially had wanted about a half-full DG position but ended up going full on it. This takes it back to that half-position and unlike VZ, those shares are staying put. I put half of that into ADBE at $310. I'm sitting on most of the rest and in addition to ADBE am looking at KLAC or MU for the rest. I've set several $300 LBOs on KLAC that haven't hit. There are other options and more may come if declines continue but those two are at the head of the class. Though I looked at ARCC and it is tempting - I owned it for several years, made good money and consider it very solid. But for now I'm staying out of RICs.
There is one other transaction piece. The IRS allows a one-time (for your lifetime) tax-free IRA to HSA conversion. I did this in September and moved $4,650. I don't talk about the HSA here. It's small and I just put it in index funds. But for those who may be retired it's worth exploring. My plan for the HSA is to pay Medicare premiums once I hit 65. That's a tax-free withdrawal and I expect to means-test to where I have to pay a decent amount. That accounts for about .6% of my IRA value drop.
My "internal/organic" DGR keeps going up in both accounts which is nice. That will happen when you swap out VZ for two companies with double-digit DGRs.
I love getting dividend increases and I had several nice ones, including GM resuming theirs. Unfortunately none were for companies in my Taxable Account where I like them even more since those buy me food. But I get some in that account in October.
I used to do more involved quarterly updates but have stopped. However my 3rd quarter dividend income was 7.75% higher than for the second quarter - again, not counting the big LYB special. I had finished my IRA buying by early March so this comparison means something.
I've mentioned most of my October plans above. I will sell some AAPL if it keeps heading up. I'll start thinking about it at $150. I don't need to sell any until November but I don't think the recent bounce represents a major change in market direction. I'm likely to sell whatever I think I need for the rest of 2022. Right now I'm thinking Christmas to early next year is the first realistic chance for the market to actually turn the other direction as by that time the Fed is likely to have drawn close to its 4.6% fund rates goal. But inflation also has to show signs of moderating. Based on my historical accuracy in predicting the market, this thought is probably wrong.
My thoughts to those in Florida affected by Ian. That just sucks.
*LYB June special dividend not included
This was a more active month so this update will be longer. I get busier during market declines. I'll have something that's fulfilling its purpose but something else will drop to a nice buy level that would serve that purpose better. Plus I retired some money and unlike past months this was not just a little to live off of but a chunk.
The big withdrawal from my Taxable Account included a little to supplement my dividends and live off of. The big one was to pay the taxes on my big IRA-Roth conversion from August 1. Unlike past months which didn't have a big impact, this one did. Without that chunk of change taken out my Taxable Account - and overall - value decline would have been about the same as for the IRAs. Part of the point for tracking this is to demonstrate, hopefully, that I can continue to increase investment value despite periodic withdrawals so I'm not adjusting losses to reflect that.
After some debate I decided not to do calculations which involved the June LYB special. If I had I'd need to include a qualifier which is just a pain and one I'd need to keep doing until next June. So that nice little bonus isn't in the comparison numbers.
Here are the numbers.
Metric IRAs Taxable Total
Buys 2 2 4
Sells 1 2 3
Dividend Increase
over September, 2021 412.51% -4.80% 47.60%
Dividend Increase
over June, 2022 1.16% -9.67%* -5.34%
Change in value
over 8/31/22 -8.88% -12.28% -11.43%
Current Dividend Yield 1.86% 3.39% 2.60%
Change in 12-mo
projected Dividend
Income fr 8/31/22 1.29% -2.60% -1.15%
Organic/Internal
annual DGR 14.74% 10.88% N/A
As has been the case, and will be for another several months, the comparison of IRA and total dividend numbers from a year ago are meaningless. From 3 months ago they do mean something.
I have cash sitting in my Roth and my Taxable Account. I have not yet bought something with the OGE sale proceeds.
Taxable Account Transactions
Sales:
- 9/19/22 – VZ, $41.16
- 9/28/22 – OGE, $39.00
Buys:
- 9/26/22 – WHR, $139.00
- 9/26/22 – BBY, $68.00
Roth Transactions
Buys:
- 9/8/22 – MU, $55.25
IRA Transactions
Sales:
- 9/15/22 – DG, $242.06
Buys:
- 9/15/22 – ADBE, $310.00
- CMI - $1.45 to $1.57/sh
- F - $.10 to $.15/sh
- GM - $.09/sh – new dividend
- KLAC - $1.05 to $1.30/sh
- TGT - $.90 to $1.08/sh
For these transactions, I have not "liked" VZ since the last ER. There are just no growth prospects. Now I expect it will keep paying its dividend with minimal annual increases for some time. But with the drop in prices, some other companies were yielding to the point where trading a bit of current income for stronger dividend growth seemed to make sense. I bought WHR, yielding over 5% with some of the proceeds.
Tax-Loss Transactions: For the rest I bought BBY which is a different sort of deal and a repeat of something I did earlier this year. I have some shares bought at $95 and above. I bought that number of shares for $68 - was hoping for $65 and gave up waiting, gave up a little too soon - and once the wash sale period is up I'll sell my higher-priced shares for the tax loss. Then I'll use that cash for something else. I also banked a tax loss on VZ as I sold shares bought at $48 and above.
I still have a little VZ left and let's just say that if the market stays low or heads down further, those shares are in peril.
With its latest announcement OGE had given two very small dividend increases in a row and there are companies yielding as much or more with much stronger growth. I have not yet used that cash to make a buy which is a major reason why my forward 12-month dividend income shows a decline. For now I'm waiting to see where prices drop to. My watch list includes AVGO - at $410, EMN, TROW and WHR. But others could come into play if their price drops enough.
In the IRA, DG has been one of my strongest performers since buying in February and March. Foolish to sell, right? Maybe but as with VZ, other companies I liked had dropped to levels where I wanted them. I initially had wanted about a half-full DG position but ended up going full on it. This takes it back to that half-position and unlike VZ, those shares are staying put. I put half of that into ADBE at $310. I'm sitting on most of the rest and in addition to ADBE am looking at KLAC or MU for the rest. I've set several $300 LBOs on KLAC that haven't hit. There are other options and more may come if declines continue but those two are at the head of the class. Though I looked at ARCC and it is tempting - I owned it for several years, made good money and consider it very solid. But for now I'm staying out of RICs.
There is one other transaction piece. The IRS allows a one-time (for your lifetime) tax-free IRA to HSA conversion. I did this in September and moved $4,650. I don't talk about the HSA here. It's small and I just put it in index funds. But for those who may be retired it's worth exploring. My plan for the HSA is to pay Medicare premiums once I hit 65. That's a tax-free withdrawal and I expect to means-test to where I have to pay a decent amount. That accounts for about .6% of my IRA value drop.
My "internal/organic" DGR keeps going up in both accounts which is nice. That will happen when you swap out VZ for two companies with double-digit DGRs.
I love getting dividend increases and I had several nice ones, including GM resuming theirs. Unfortunately none were for companies in my Taxable Account where I like them even more since those buy me food. But I get some in that account in October.
I used to do more involved quarterly updates but have stopped. However my 3rd quarter dividend income was 7.75% higher than for the second quarter - again, not counting the big LYB special. I had finished my IRA buying by early March so this comparison means something.
I've mentioned most of my October plans above. I will sell some AAPL if it keeps heading up. I'll start thinking about it at $150. I don't need to sell any until November but I don't think the recent bounce represents a major change in market direction. I'm likely to sell whatever I think I need for the rest of 2022. Right now I'm thinking Christmas to early next year is the first realistic chance for the market to actually turn the other direction as by that time the Fed is likely to have drawn close to its 4.6% fund rates goal. But inflation also has to show signs of moderating. Based on my historical accuracy in predicting the market, this thought is probably wrong.
My thoughts to those in Florida affected by Ian. That just sucks.
*LYB June special dividend not included