January 2019 Portfolio Update

Summary

• Trades made and dividends received.
• Plans going forward.

Trades and Dividends Received

January was a light month. I spent all my cash on December 24 except for the $7,000 I added to my Roth on January 1. Then I waited. I finally made a couple of buys, both in the Roth, and both NOT according to plan which I'll cover later.

Trading Activity:

• 1/22 - Bought Altria Group (MO) at $44.64.
• 1/30 - Bought AT&T (T) at $29.10.

Dividends Received:

• 1/2 - WalMart (WMT)
• 1/10 - Disney (DIS)
• 1/10 - Hannon Armstrong Infrastructure (HASI)
• 1/10 - Illinois ToolWorks (ITW)
• 1/10 - Medical Properties Trust (MPW)
• 1/15 - Uniti Group (UNIT)
• 1/25 - New Residential (NRZ)
• 1/28 - Two Harbors (TWO)

NOTE: I DRIP dividends in my Roth. In my taxable account I take them as cash. The cash is in a Fidelity money market which pays a little over 2%.

The Trades:

This was interesting. I have been using my Roth for what I consider high yield stocks. My definition of high yield means pretty much Real Estate Investment Trusts or REITs and Business Development Companies or BDCs. And if I ever buy them this will also include Closed End Funds or CEFs. I had some REITs and BDCs I was looking at but was waiting to see if the market would retest the December lows. Then MO and T dropped to where their respective yields were over 7% and I picked them up instead.

Buys made in my taxable account are with the idea that I'll never sell. This is not the case for the Roth. It is a total return account. The goal is to make the most money I can in it by hook or by crook. I have no tax liability for anything that happens in it and if I ever trade again it will be in this account. So if MO or T has a price pop I could sell it - same for any other Roth stock. And if they don't I'm happy to collect and DRIP the 7%.

But it was not the original plan.

I made no sells in January.

Dividends:

This was a good dividend month for me, well above my average 2018 month. I am hoping it is part of the new normal, not an outlier. Based on my projections February should be a better dividend month but we shall see. It doesn't mean all that much but my January 2019 dividends were an increase of 106.90% over January, 2018. This is more due to a change in my portfolio and an increase in the amount invested than due to dividend increases though some of this was in play.

Plans Going Forward

I still plan on selling WMT if it reaches $100 though if this happens close to February 20 I may hold off for the next dividend announcement. If they continue raising it by a penny a quarter as they have done since 2014 it'll confirm it as one to sell. If they raise it by $.05 it will completely change my plans - and be a big surprise. My retirement is not far off. Owning a company paying just a little over 2% and only increasing the dividend 2% annually does not fit my plans for growing income.

Before buying MO and T I had planned to sell either NRZ or UNIT from my Roth to maintain a fairly consistent overall BDC and REIT level in my accounts. They were in a race - NRZ at $18 or UNIT at $20. Whichever reached its respective level first would be sold. That plan is on hold. I own each in my Roth so it's not that I dislike them, I just dislike paying taxes on the ordinary dividends. Either could still be sold if it is trading high and something else I like goes on sale.

It doesn't matter much but for the month my portfolio value increased by 6.78%. This does not include the money I added to the Roth but does include dividends.

January was a slow month after the hustle and bustle of December. That's OK - other than the Roth I was pretty much out of cash anyway. But dividends are coming in and at some point will be put to use.