This was FUN and a challenge for me as I wanted some equity and mortgage REITs along with classic blue chip dividend payers of quality and all at Fair Value or better. Worthy goals.
I wrote an article here last July explaining our 7 Vanguard funds (shown below). There is also other personal investing information in that article for anyone wanting to know the full story of our/my holdings.
These are the Original holdings of July 2016:
At the time of transfer, September 9, 2016, I had sold the first fund listed VGSLX, the equity REIT fund. It was a nice profit with it almost at an all-time high, and thus a good time to sell.
I therefore only had 5 funds left to transfer and some cash in the money market VMMXX.
I received 50 free trades and a cash bonus for the transfer, that was like getting another 85 free trades. It all depends on how you want to look at it.
I took these 5 funds down to only 2 which are shown in bold in the chart below. They were the winners for the IRA.
I show the prices at which I sold along with their latest price.
|VHDYX||Hi Yield div||28.69||29.97|
My research revealed fund vs. fund stock duplication and we owned many of them individually as well. I did find growth non-dividend payers and these I wanted a taste of... so they became the winning funds. First I want to discuss the losers.
VTIAX, an International Stock fund. It was sold almost immediately. It holds way too many tiny positions, like a 1% stake in Nestle, not enough and that is the largest holding. Please see the top 10 holdings shown below.
The price has not changed much from when I sold and with definitely no regrets.
VGSLX is similar to VNQ, a REIT fund. This one, and I repeat, I sold before the transfer.
Here is a quick look at how REITs are doing in that fund as of recently. I am pleased I sold.
It is the perfect example of a roller coaster ride that we do not know how it will end. I had wanted to pick my own REITs anyway.
The one stock I want here is Microsoft (NASDAQ:MSFT) and it will show up in 2 others funds as well. I own 7 of the others, so I sold this one and the next one VVIAX.
The 2 WINNERs
Microsoft, Facebook, Amazon and BRK.B stood out to me in VFIAX and a taste of Apple.
I also get some banks along with GE. I own none of those stocks elsewhere. I do own JNJ and XOM.
These 2 funds will comprise about 17% of the portfolio by value with the edge going to VFIAX.
34 Stocks by 10 Sectors along with Vanguard
These stocks were chosen deliberately with heavier weighting to Financial and REITs, as the Vanguard funds do not currently hold many mortgage and equity REITs or BDCs.
I picked 2 credit rated A equity REITs: SPG and PSA.
This shows the % holding by value and by projected income.
You might ask why I went for such a high yield; again I can't help myself. It is in an IRA, so no taxes to be paid until age 70.5 and RMDs or Required Minimum Distributions must be taken, which is less than 3 years from now or so. I have time to tune it up or down to suit our needs which is nothing at all presently.
|Name||curr $pr||% P/V||Sector||div/yr||% P Inc||Sector|
|R D Shell-B||(NYSE:RDS.B)||58.67||1.79%||3.76||2.41%|
This next chart reveals the prices I paid (c/sh) with some great and some not so great. I overpaid for those A-rated REITs, as I look back at it now, I could have done better.
I am extremely pleased with my 3M price and LMT, so I guess it all averages out.
This one is alphabetical
|TICKER||CurrPRICE||c/sh||Dividend||% P/V||% Inc|
This yields 4.8% on cost with the Vanguard funds and would yield 5.3% without them.
The total cost of the portfolio is already up 1.6% and I am now going to sit back and collect dividends and options premiums.
Yep! Options too.
I am also doing options, with the most recent being T and SBUX.
To me these are win-win situations.
T was such a good price when I started this portfolio I bought probably too much with 300 shares. It is also in the Funds.
VZ too, as I like telecoms for the yield, higher yield, which is one of my downfalls.
The T cost is $39.81 and I sold calls @ $42. As T just went ex-date last week, no dividends are involved.
March 17th, the Call ends. It was sold on T for 2 x100 shares and netted me $127.60 (that is 0.68 per option) less one fee. That amount is mine to keep no matter what happens. The price of T at the time these were sold was $41.02, which was Friday January 13th.
I don't care if it sells or not; which is a win-win.
The portfolio cost on SBUX is $53.72. Current price is flirting with $58. That is a level I wouldn't mind selling these shares at and making $400 quickly, plus option premium. If not, I might lose the dividend of $0.25 in February. The option ends Feb. 10.
I sold 1 call option @$58 price for 100 shares @ $1.27 with SBUX selling @ $57.68 on Friday. I netted $119.30.
If I get to keep the shares, I also keep the dividend ($25). If the shares sell, I end up with a nice tidy sum for shares I have elsewhere anyway. Win-win, I don't really need SBUX.
Just to mention, this is the account I had some BMY called away from me @ 57.50 in Dec. 2016. My cost was around $52.65 for those shares.
BMY is selling for $56.22 now, but at the time it hit $59 or so. I made about $568 in less than 2 months by doing it. That was a 65% return. Sometimes owning something and letting it go can be very profitable. I say win-win. There is always something available to buy, and I chose PFE to replace it.
Investing is what you make it. Don't try to make it too hard on yourself.
Remember there is always something good to buy somewhere, you just need to look. Explore and keep your options open to everything.
Happy Investing Always.
Disclosure: I am/we are long 34 STOCKS AND 2 VANGUARD FUNDS IN CHARTS. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.