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March 2020 Update

Personal and Blog Recap

What a month - a stock market crash and COVID-19 sending North America into lockdown, altering the lives of millions of people. I hope everyone has adjusted well to their new situations, whether you’re working remotely, have been laid off for the time being or any other changes to your daily routine.

Personally, I tried to incorporate new media sources in my life by adding a trial subscription for Audible to check out some audiobooks. So far I’m excited about using it especially with the ability to increase the narration speed of the books. This is a feature I already use when listening to podcasts and other sources on Youtube and Spotify. Increasing the speed definitely needs some getting-used-to, but in the end, you’ll be able to consume more information in a shorter amount of time.

March proved to be the month where I added to and improved sections of the blog including a major overhaul of my shared portfolio with the addition of a breakdown by account and sector allocation. On top of that, I added a graph that outlines my top 10 positions by allocation percentage. I also added a section with services and online resources and plan to add a section with books as soon as I write my first book review.

Financial Recap

portfolio

Dividends and distributions in March made a small leap forward. Year over year I was able to increase the income generated by 8.58%.

Remember how I ended my February review by stating I didn’t see a stock market crash just yet? Well, it’s fair to say I was proven wrong and the crash came and it was fast. My portfolio value dropped by around 35% but with the recovery, we saw over last week my overall portfolio value is back in the green.

On a positive note, this reinforced my belief that I am not able to time or predict the market at any time and making bi-monthly investments will continue to be my investment frequency of choice. Given the volatility we saw over the last weeks I was always able to find a suitable position to add to my portfolio or to average down on existing holdings. Times like those are great for dollar-cost averaging especially coming off of the longest bull market of all time. Averaging down the cost per share on your positions will boost your yield on cost given the company can sustain the dividend through a crash or bear market.

Stock Transactions

Buy Orders

March was defined by reallocating capital from closed positions as well as averaging down on current positions. So far 3 companies in my portfolio have chosen to suspend cutting their dividend, which is great given the economic impact of the pandemic and comparing it to the long list of companies that decreased their dividend.

To kick off March, I averaged down on my position in Rio Tinto Group (NYSE: RIO), which I initiated in February. The stock has been very volatile in March and it seemed a good time to bring the position up to size.

With my second purchase, I increased my position in Manulife Financial Corporation (TSE: MFC). The stock of this global insurance company has lost about 50% of value in a matter of 2 months, and although chasing yield can be dangerous, I think this company has the balance sheet and global exposure needed to survive the pandemic and a potential bear market.

I usually don’t add more than two positions to my portfolio each month, but since I was forced to sell some of my positions due to dividend cutting, I reallocated money into CISCO stock (Nasdaq: CSCO), a technology giant with a very strong balance sheet.

I also reallocated into Canadian Apartment Properties REIT (TSE: CAR-UN). This is the first appearance of Canadian Apartment Properties, and given that REITs are currently under a lot of pressure, I want to present the company a little further. Atypical for a REIT, this holding offers a history of 8 years of continuous and substantial dividend growth. Its business is focused on apartments and townhomes across Canada, Ireland, and the Netherlands. While my other REITs are focused on industrial properties, this position offers diversification and entry into residential properties.

Sell Orders

In March I closed my position in Boeing (NYSE: BA). After the company cut the dividend it no longer fit in my portfolio. The reasoning for my investment in Boeing still holds its merit, but after the cut in dividends, it no longer fits my strategy. I believe it could be a stock that can bounce back and deliver some capital appreciation, but without generating cashflow I am not interested in holding it any longer. You can read more about my investment decision in the following post: Recent Sale - Boeing

Another position I had to close was A&W Revenue Royalties (TSE: AW-UN). The current lockdown situations all over North America forced the company to suspend its dividend. The position provided outstanding dividend growth and capital appreciation over the last couple of years and was a core holding in my TFSA account, but as we really don’t know when things will go back to normal and what kind of normal that will be, I chose to close my position.

As a sneak-peek for April, I can already say that I plan to liquidate at least one of my positions as a result of their announcement to cut the dividend by over 70%. I will have to find a good position to reallocate the capital, though selling at a loss always hurts.

Closing Words

If you enjoyed reading through some of these insights into my portfolio, especially through these times of uncertainty, stay tuned!

How did your March go? I hope you stay safe and adjusted well to the changes in your work and personal environment. I would love to hear about your opinions or experiences with dividend growth investing and the recent downturn in the comments below!

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