It is hard to believe that another month has come and gone, and as I begin to prepare the next dividend income report I thought it might be useful to review the movers and shakers from my portfolio during the last month.
There is no doubt that October was a rough month in terms of the overall market, but by taking a closer look at the portfolio we can see what took the brunt of the decline–and might represent some good buying opportunities–while also looking for those positions that managed to be in the green.
Portfolio Losers
I don’t know about you, but I always like to start with the bad news–and while not that declining prices are necessarily bad news (remember to chill for best results) but there were plenty of positions in the red.
Out of the 47 positions currently in my dividend portfolio, there were 28 that were in the red.
Roughly 82% of the positions that were down for the month, their decline was in the mid-single digit loss as an overall percent loss. Overall that isn’t too bad given the volatility that we were seeing across the market, but what about the remaining 18% of the portfolio?
You may recall from my discussion about tracking portfolio performance that my spreadsheet will highlight any positions that have had a loss greater than 10% in a given month.
There were 5 such occurrences during October, including the following:
- AbbVie declined by 16.81% for the month > If I were not currently overweight with ABBV, I would be looking to add at these levels particularly after they just announced an 11.5% dividend increase!
- Snap-on declined by 16.15% for the month > This is one that I was able to add during the month, unfortunately my purchases were made before the bulk of the decline so there was money left on the table there.
- Home Depot declined by 15.10% for the month > The drop in price did give me an opportunity to add to my position here as well, but my secondary order has not made.
- BlackRock declined by 12.71% for the month > This is a new position to my portfolio and was added as a result of this decline, as they had not seen these price levels in quite some time so I took advantage.
- Iron Mountain declined by 11.33% for the month > While I have not yet added to this position, I am definitely looking at this for another buy but need to complete a few portfolio adjustments to have the capital in my IRA.
It is never fun to see so much red, particularly those losses in excess of 10%, but I am a firm believer in remaining true to your strategy in good markets and bad.
Speaking of good, were there any bright spots in October?
Portfolio Leaders
Overall, there were 19 positions in the portfolio that were in the green in October.
Unfortunately none of those 19 were able to break the threshold of 10%+ gains, and there were a handful that were less than one percent away from being in the loss category.
While there weren’t any stellar performers last month, the portfolio was led by the following:
- Cracker Barrel gained 8.71%
- Verizon gained 8.11%
- Altria gained 7.84%
- Procter & Gamble gained 7.49%
It was nice seeing the positive movement from Cracker Barrel and Altria after I’ve added to those positions over the last couple of months. Verizon was on my watch list but it never made it to my price point before it began to move upwards.
Closing Thoughts
When it comes to dividend growth investing, one really needs to have a long-term strategy and not be overly concerned with the day to day, or month to month, movement in the stock prices. As long as the dividends remain strong and consistent, declining prices can offer good opportunities to buy more and add fuel to the dividend FIRE.
With that said, I do think there is value to monitor the overall performance over time as you don’t want to keep your head stuck in the sand as you will miss clues that just might signal trouble ahead.
There is no doubt that the month of October was rough, and my overall net worth can attest to that, but by having that long-term perspective I am not concerned. On the contrary, I was able to add a significant amount of new capital into the market as I will highlight in the coming dividend income report.
We are now embarking on a new month and I’ve seen some rather strong earnings announcements, but the market has not been kind to all of those companies. There is no telling what November will bring, but I am confident that I will remain true to my strategy regardless.
How did your portfolio perform in October?
Hey DivvyDad, you never know when these declines are going to come, so knowing what you want to buy and sticking with your strategy is all you can really do.
I’ve been very lazy the past 6 months letting the cash pile up, but just put some funds to work in Iron Mountain – I’ll certainly be having a closer look at those other 4 which have declined as they’re likely to be pretty good value.
Cheers, Gary
Absolutely Gary, and it is nice to have that cash available when the declines do show up so you can take action. Happy to have you as a fellow shareholder on IRM, and I am sure you got in at a nice price too.
I don’t fret the losers or cheers the winners in the short-term. We’re in this for the long haul. What’s dun about looking at the stocks though is seeing which stocks surprise you and have strong months. Hopefully those strong months lead to a surprise dividend increase 🙂
Bert
You’re right Bert, as with that long-term perspective these ups and downs are just noise and demonstrates why it is important to stick with your plan. And it is a beautiful thing when those strong months lead to a nice, juicy dividend increase!
I have officially gave up looking at the winners and losers. I’m convinced that there are bigger forces behind these moves than simply performance, financials, etc. when companies beat earnings and drop drastically the next day, makes one realize that it’s a money making game for the big boys. As long as I’m invested in good reputable companies, I don’t fret the price. Only if the dividend comes into question do I begin to sweat.
I like having the performance view as just another data point, but you’re right that a stock’s price moves for many reasons. It can be frustrating but as Bert noted above, when approaching things with a long-term perspective it all tends to wash out. The one that always makes me grimace is when a firm downgrades a stock, price declines on that, and then they turn around and the same firm upgrades it.
The dividend being at risk is the key thing we as DGI investors do need to be concerned about though, as the price can move any which way as long as that dividend keeps getting deposited like clockwork.
The drop in ABBV’s price along with another dividend increase announcement looks like an opportunity for me to add on DD. Diversification is so important. The consumer staples were getting beat up while the market was on a roll and now with it getting choppy they are making a come back and holding strong. Tom
Yeah, I loved seeing their great increase while the price has been getting hammered down as that is providing some great opportunities to add shares. You hit the nail on the head re: diversification, and those sector movements can provide nice opportunities to load up when one is getting beat up.
As a dividend growth investor I don’t mind seeing some red once in a while, because those days tend to be good opportunities for new purchases. Even so, I usually don’t like to Log into my account during these days if I don’t plan to make some new buys as it is little bit depressing to see -3 % on the screen.
You’re right DD, and it seems counter-intuitive but I welcome those red days for just that reason because I am constantly on the lookout for those attractive buying opportunities. Now once I actually reach retirement, I am sure that I will feel differently as I won’t have the level of new capital being invested and will want to see more green days.
Well said, DivvyDad. I’m in sync with all your thoughts here.
Monitoring price movement is just one more tool in the stock evaluation toolbox.
Exactly ED, I am a firm believer in having multiple data points to evaluate and use as part of the ongoing educational process to be a better investor. That is part of what I love about the DGI community as I have added so many additional tools to my toolbox by learning from so many like yourself.
I own 3 of the 5 positions that you own that were trounced in October. I recently initiated a position in IRM and I plan on adding to the position for the next couple of months at or near these valuations.
Great to see you’ve added IRM to your portfolio, and that’s a great approach to continue nibbling to add more shares. A few months ago the opportunities to buy were harder to find, so seeing this pullback has been nice.
With a long-term horizons, I hardly give a second thought to the value of my portfolio. I did notice though that the overall value declined when the market took a dive. That’s ok though. I wish I had capital to be able to take advantage of the market like you did. If I did, I would definitely buy more shares of ABBV which I also own. I’m really looking forward to seeing how the monthly income report turns out.
It is definitely nice to have capital to deploy when opportunities like that arise, and if ABBV were not already an overweight position for me I’d be looking to add more as well. The income report should be out in the next couple of days.