Millennial Portfolio Update: 2 Additions

Dec. 13, 2019 9:00 AM ETSBUX, VICI, DIS, MO, ABBV25 Comments8 Likes


  • Strong performances from the likes of DIS, MO, and ABBV.
  • VTR struggles finding support after poor Q3 earnings showing a slowdown in its senior housing segment.
  • Initiated positions in VICI and SBUX during the month of November.
  • The current yield on cost is 4.82% with a total gain of 9.4%.
  • Looking for a helping hand in the market? Members of High Yield Landlord get exclusive ideas and guidance to navigate any climate. Get started today »

Over the past few months, I have had a number of you reach out regarding investment ideas for millennials. First off, I am so excited that you are actually thinking of this and investing in your future because the fact is this is a low priority for the millennial generation. The sooner one starts thinking about retirement, the sooner they can reach financial independence. One term that has commonly been discussed here on Seeking Alpha has been the "FIRE", or Financial Independence Retire Early, method, and who does not want to retire early.

As such, over the past few months, I have started putting together a portfolio of investments geared toward those of you with a number of years left before you plan on retiring. The FIRE method could be a little too optimistic with some of the stories or articles you read about folks retiring in their 30s, but for the vast majority of us, retiring in our 50s would be considered early in my book, which is what this portfolio is built for.

This portfolio will not just be for those of you in the millennial generation, but also for those of you with family members that may be a millennial that you could use to give them advice or maybe you are building a portfolio for them, such as grandkids.

The Millennial Retirement portfolio will be structured around making high-quality, long-term investments in primarily dividend-paying stocks. This portfolio, due to the longevity millennials have, will take a long-term approach, and we will not make sudden changes due to volatility within any of our investments unless the thesis changes for whatever reason.

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Portfolio Blueprint

The Millennial Retirement Portfolio takes a long-term approach with the goal in mind of reaching financial independence prior to reaching retirement, whether it be in our 50s or 60s, for the vast majority of us. Let's take a look at how our Millennial Retirement Portfolio will be constructed:

  • High-quality stocks and ETFs.
  • Dividend-paying stocks that are well-covered with strong dividend growth.
  • Some higher-growth (non-dividend) stocks will be mixed in due to longevity.
  • Risk Tolerance: Moderate.
  • Target portfolio yield of 3+%.

Here are the rules we will be sticking by for this portfolio:

  • I will start by making a $2,000 initial investment in each stock as it joins the portfolio.
  • Additional investments of $1,000 will be made if any initial investments remain a compelling buy.
  • Dividends will be collected until we collect $1,000 before making another investment.
  • Only sell if the thesis breaks (dividend becomes unsafe, negative changes take place within the company, or strategy changes for the company).

Why Millennials Need To Invest For Retirement

At first glance, this question of "Why millennials need to invest for retirement" seems to be straightforward, however, the millennial generation needs a lot more help than past generations. TD Ameritrade conducted a 2018 Millennials and Money survey that concluded that 53% of millennials expect to become millionaires one day, yet only 31% of young millennials are actively saving for retirement. So, for the other 69% of the generation, this portfolio is for you!

The millennial generation grew up during the "Great Recession" and much doubt has been cast over Wall Street and the financial markets. In addition, student debt is at all-time highs, as is housing costs, which puts retirement savings on the back-burner for many, not just millennials. It is completely understandable why this generation, my generation in fact, is a little different. However, whatever amount, small or large, that you can set aside every month or so can go a long ways with the power of investing and compounding dividends.

To briefly give you an idea on the power of compounding dividends, let me give you an example of investing at 28 or waiting until mid-30s. A 28-year-old who invests in a retirement account today and contributes $6,000 per year would have $910,000 for retirement saved by age 67, assuming a 7% annual rate of return. Using the same assumptions, except waiting until age 35 to start saving, shrinks that savings amount to $565,000. Putting your money to work as early as possible makes all the difference.

November Performance Update

November Highlights

  • Received $10 in dividend payments during the month from SBUX.
  • Added SBUX and VICI to the portfolio at the beginning of the month.
  • Current yield on the portfolio is 4.43%.
  • Yield on cost for the portfolio is 4.82%.
  • Total gain on portfolio (with dividends) is 9.4%.
  • Total dividends expected for 2020: $764.74.
  • Inception to date Gain: 8.9%.

Portfolio Activity

Let's take a look at our first update of the millennial portfolio I started investing in during Q3. The month of November was strong for the portfolio as we saw 5.12% growth during the month and the inception to date growth at 9%. This month's strong performance was led by Disney (DIS), Altria (MO), and AbbVie (ABBV), which saw increases of 16.7%, 11.0%, and 10.3% growth, respectively.

For comparative purposes, the S&P 500 was up 3.4% during the month of November, lagging our millennial portfolio by a good margin.

Disney had a strong month as it successfully launched its Disney+ streaming service, of which I own and love. This gave the company a strong boost as it received over 10 million subscribers as of the launch date, which was ahead of expectations.

AbbVie and Altria have been two underperforming dividend growth stocks in 2019, with both names either being in the red or flat year to date. ABBV saw its stock retreat in sharp fashion after its announced acquisition of Allergan, but has since rebounded strongly in the past four months roughly 35%. Altria has been in the crosshairs of regulators and the public surrounding its 2018 acquisition of e-cigarette maker JUUL. JUUL has been under fire due to a number of illness and deaths related to vaping, but after more studies, it appears that the black market products are what have been the main culprit.

In addition to strong performances from a few of the holdings, I made a couple of new additions to the portfolio which I detailed in my article titled, "2 Additions To My Retirement Portfolio."

The first addition was VICI Properties. VICI Properties is a specialty REIT that has a focus on gaming and hospitality. The company went public at the end of 2017 as a result of the spin-off of Caesars Entertainment (CZR). The company specializes in "specialty" net lease properties, primarily being casinos.

Being that the company is fairly new, its average remaining lease term of 14 years provides a certain level of assurance for not only management but also investors. VICI offers an initial lease term of 15 years followed by 4 five-year renewal options. Assuming the tenants remain profitable, the renewals can almost be counted on, resulting in a true lease term closer to 35 years. In addition, the annual escalator on most leases is around 2%.

The other addition I made to the portfolio this past month was purchasing shares in Starbucks. Starbucks is a name near and dear to many of our hearts both in the investing community and the coffee drinkers' community. The company has done a superb job of not only providing high-quality products, but it has also created its stores as a meeting place, which also drives business.

When long-time CEO Howard Schultz, who strategically turned a small coffee chain in Seattle into a global leader, decided to retire in mid-2018, many investors, including myself at the time, had concerns. SBUX investors had seen how this played out in years prior when Mr. Schultz stepped away from Starbucks only to return years later to save the company. Since Mr. Schultz left the company completely in June 2018, the stock has risen roughly 70% under CEO Kevin Johnson's leadership.

Starbucks has long had a strong loyalty base, one that it has seen grow to 17.6 million active members in the US. This is key for the company due to the fact that these loyalty members tend to spend more than non-loyalty members. China now has 4,000+ stores in the country and that combined with its delivery partnership with Alibaba (BABA) has been a major plus.

Dividends Expected Next Month

I expect to receive $10 in dividends for the month of November.

  • $10 expected from SBUX

Looking Ahead

I expect the remainder of the year to be rather quiet, that is unless we hear some trade news in the coming days. We will see if we get a little boost as we get closer to Christmas, but this should be the last update in 2019, so I would like to wish everyone a Merry Christmas and happy holidays. Stay tuned for some of my favorite picks for 2020 coming soon.

Now that you have had a chance to digest the portfolio results to date, I look forward to hearing your thoughts on the portfolio and hearing some of your ideas for any changes to be made. Good luck to everyone and happy investing!

Note: I hope you all enjoyed the article and found it informative. As always, I look forward to reading and responding to your comments below and feel free to leave any feedback. Happy Investing!

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This article was written by

Mark Roussin profile picture
Author of iREIT on Alpha
The #1 Service For Safe and Reliable REIT Income

Mark Roussin is an active Certified Public Accountant (CPA) in the state of California. Mark has worked as a CPA, serving both public and private Real Estate corporations for over 10 years. Today, he provides his followers insights to both undervalued dividend stocks mixed with high-growth opportunities with a goal of them reaching financial freedom in the long-term. Mark tends to invest primarily in dividend stocks with a strong emphasis on Real Estate Investment Trusts (REITs). 

Mark has partnered with "iREIT on Alpha”, which is the premiere marketplace service that provides the best daily in-depth REIT research. The service boasts a community of like minded investors that also receive complete access to our various portfolios that you can track in real-time. Come check out all the exclusive content today!


DISCLAIMER: Mark is not a Registered Investment Advisor or Financial Planner. The Information in his articles and his comments on or elsewhere is provided for information purposes only. He asks that you perform your own due diligence or seek the advice of a qualified professional. You are responsible for your own investment decisions. 


Disclosure: I am/we are long ABBV, MO, DIS, IRM, JNJ, VTR, VICI, SBUX. 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.

Additional disclosure: This article is intended to provide information to interested parties. I have no knowledge of your individual goals as an investor, and I ask that you complete your own due diligence before purchasing any stocks mentioned or recommended.

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