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August 2020 Update

Personal and Blog Recap

Does anyone recognize this golden rider? I assume most of you don’t and might be wondering what this image has to do with the blog. Well, while trying to come up with a thumbnail for August, not much stood out for me in current events so in the spirit of continuing to get to know the voice behind the blog, I thought I’d share this play on words - bear with me as the German humor is not the best. This statue is of August the Strong (Elector of Saxony and King of Poland) and can be found in Dresden, Germany which is close to the place where I grew up.

I am thinking a lot about my hometown these days, given it has already been close to a year since my last visit. With the current limitations for travel, I’m hoping I can see my family and friends again in the next year or so but the remainder of 2020 will definitely be spent staying close to my current home in Toronto.

August in itself has been a very busy month for me, divided between ever-growing responsibilities and tight deadlines during my day job and learning about Machine Learning after hours. It’s been tough for me to find time to improve the blog and keep the focus on creating posts but now that I’ve passed the final test for the Machine Learning course I have more time for writing and analyzing stocks again, a past time which both fuels my drive for self-improvement and keeps me entertained.

In my July Update, I mentioned a couple of blog improvements I’d like to achieve in August, and I am happy to share that these are done and delivered. I added an About Me section to give you an introduction about the guy behind the just-dividend brand logo. Moreover, I was able to overhaul the portfolio page (again). I’m still not 100% happy with it but at least it doesn’t take ages to load anymore and provides a fairly clean overview - feedback is always welcomed, especially when it comes to the visual organization for the portfolio overview. I tried a tree-map before but the amount of stress it puts on your browser while calculating and rendering is just not worth it, especially for all the mobile readers out there. If you have a preferred set-up, let me know in the comments below!

For September, I plan to keep the enhancements to a minimum and focus on content and analysis making up for the lack of content in August. There are a couple of smaller additions floating around my mind but I feel like the biggest benefit I can provide for readers to establish my presence at this stage is more posts.

Financial Recap

portfolio
 

I was surprised when I ran the numbers earlier this week as August proved to be the first month I’ve had with a negative year over year growth. I ended up with a -0.55% change in distributions and dividends received.

Looking back, this decrease can be attributed back to a few shifts in my stock portfolio due to dividend cuts earlier this year. Without the dividend payments received previously from Laurentian Bank of Canada (TSE: LB), ALTAGAS LTD (TSE: ALA), and VODAFONE GROUP PLC (Nasdaq: VOD), the added income accumulated from DRIPs or new investments was just not enough to generate income on a similar level as last year.

Focusing on my loan portfolio, the month over month growth was even worse, dialing in at -10.9%. With one loan originator having issues at this moment, I saw this drawback coming as soon as I got the update from Mintos. Overall, it reiterates on the risk you take on with P2P loans even with a buyback guarantee in place, as loan originators can get into financial difficulties at any time.

On the bright side, the money is not lost and Mintos is in the active process of recovering outstanding principal and interest payments. The process is very transparent and can be followed on their new dashboard of pending and outstanding payments.

While both of those statistics read more like a nightmare, I think of them as outliers and blowbacks which are bound to happen on my path to success and financial freedom. Lessons about unsustainable dividends were learned (looking at you ALA and VOD) and set me up for future success, while the decrease in P2P lending income should recover as the outstanding loans are recovered from the loan originator.

The next months should paint a different picture and I wouldn’t be surprised if I can log a new all-time high in dividends and distributions received in September.

Stock Transactions

Buy Orders

In August, I was able to meet my monthly goal of investing 50% of salary earnings. As my portfolio is getting larger, I added one net new position and took advantage of a market weakness to average down on an already existing position.

The Diageo Plc (NYSE: DEO) stock price dipped in early August. The globally operating beverage giant originating in the UK is supposed to be a core holding in the consumer staple sector and the temporary weakness seemed like a good opportunity to average down.

The newcomer to my portfolio was McDonald's Corporation (NYSE: MCD). The company’s stock price is never considerably cheap but the fast food and real estate giant has an amazing track record when it comes to dividend growth and capital appreciation. I absolutely would like to build on the position in the future, as the company seems recession-proven and supplies customers worldwide.

Sell Orders

I did not place any sell orders in August, but this was just a matter of timing as I sold my shares in British Petroleum (NYSE: BP) very early in September, after their announcement to cut their dividend on August 5th.

In addition to sticking with my dividend growth strategy, this sale also aligns with my target to divest from pure-play oil stocks by adding more renewable energy options. This is a strategy I’m not alone with either. Even the focus of some “big-oil” companies themselves is moving towards adding renewable products and technology to their business models. Even so, for these companies to transition, it will require tremendous investments - therefore, I will likely avoid acquiring these positions for the near future until the first results from those efforts can be seen on quarterly reports.

Closing Words

I hope you enjoyed reading through some of these insights into my personal life and portfolio. These times are challenging for all of us and I hope you and your loved ones stay safe.

I would love to see you share your opinions of, thoughts on, and/or experiences with dividend growth investing in the comments below as well as any topics you might like to see me explore!

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