September so far has turned out to be quite the eventful month - we've had a few agent provocateurs for volatility courtesy Lawrence Summers backing out as a potential Bernake replacement, Fed taperisms, debt ceiling and obamacare bickering and a plethora of boom, doom and gloom predictions from every analyst out there.
Suffice to say, life goes on as we're in this for the long haul and will collect cash payments being part owners in the companies we've invested in. Inspite of all the noise, our Dividend Growth Income fund is staying the course and has continued sending us cash and has also appreciated nicely in a month that I was expecting to be bloody.
Suffice to say, life goes on as we're in this for the long haul and will collect cash payments being part owners in the companies we've invested in. Inspite of all the noise, our Dividend Growth Income fund is staying the course and has continued sending us cash and has also appreciated nicely in a month that I was expecting to be bloody.
Key finance highlights for the month of September
- Dividends: We received cash payments from Conoco Phillips (COP), Chevron Corporation (CVX), McDonalds (MCD), Phillips 66 (PSX), Target Corp (TGT), Time Warner Inc (TWX), Walgreen Company (WAG), Wisconsin Energy Corporation (WEC) and Walmart (WMT). We have one more payment expected from Digital Reality Trust Inc. (DLR) on September 30th.
- Stock performance: This has been a good month for the DGI Income fund. As mentioned in an older post, I started positions in CVS Caremark (CVS), Walgreens Corporation (WAG) and Costco (COST) in the month of August. WAG has already shot up by 13%, COST by 4% and CVS is down by .50%. Interestingly, I expected CVS to perform the best followed by Costco and Walgreens. Well,this goes to show that sometimes it's the boring stocks that give you much upside.
- Dividend Reinvestment: Bought a few shares of Wisconsin Energy Group (WEC), Walmart (WMT) and Textrainer Group Holdings (TGH). As I use scottrade as my broker, there is no fees for reinvesting dividends under their FRIP (Flexible Reinvesment Program).
Expectations for October
Being the conservative investor that I am, I'm expecting a lot of volatility in the month of October considering that we've reached new highs in the S&P500 this September and we've backed up a bit standing right now in at 1700. The feds have admitted that the economy is on life support and they want to give political bickering some space.
I'm not worried.
- Market highs so cash is king: I've decided to build my cash position as the cash available for investing in stocks has been depleted. I will keep building till next spring and buy only if I see really good bargains or add to blue chip positions that go down considerably. I'm comfortable with the portfolio I have right now to just leave it there and let money work for you. I will only keep reinvesting dividends till my cash position is strengthens.
- Deploy unusable long term cash holdings during market tops: We have a strong cash position in our 401K account and this will be slowly deployed to add to positions in T.Rowe Price Dividend Growth fund during this time when we're in the market highs. I intend to deploy 40% of the cash position by the end of the year in stages. Every month, we have a additions to our cash position from our employer so even if I deploy 40% of the remaining cash position into equities, we can expect replenishment every month.
- Evaluate Overall Earning Trends: I have to wait for earnings and see how the broader market is performing as this may hint whether we will have significant pull back. I feel the market is currently a bit overbought and we may see some sell off in the short term and we have debbie downers in the form of debt ceiling debates and other political shenanigans. Also, retail investors who were shunning the markets thus far are rediscovering their love and pouring into mutual funds as per reports. If the market goes up, good. If it goes down, good. We're in it for the long haul with five year investment cycles remember?
- Apple surprise: Apple (AAPL) seems to be gapping up and a much needed catalyst was achieved today - the surprise blowout sale of 9 million units as opposed to "analysts" predictions of 5 million to 7 million units. Ofcourse, we all know that these analysts just pull random numbers from the air. Apple board has also upped their guidance for the quarter. We have earnings at the end of the month so expect some surprise. I'm expecting a couple of analyst upgrades that will change in sentiment.
Until next time,
Happy programming!
Additional disclosure: I am not a licensed investment advisor and I am not providing advise for you
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