As is customary around this time, it’s a good opportunity to review the year passed and the year ahead, to learn from our mistakes and to build on our successes. After my last blog post about the dividend numbers for December 2019 I decided to make a visual presentation of the year 2019. This is how this fantastic year for the stock market ended for me:
New & Closed Positions
The most fascinating thing for me in terms of buys and sells was building my position in 3M (MMM). I was a bit early with buying severals shares just above $192 but managed it to average down towards a price of $171. If presented with the opportunity to buy more shares around $160… I’m in. Their streak of increasing their dividends with 61 years just screams quality and staying power.
I’m also glad I took advantage of buying two quality large U.S. banks at depressed Mr. Market prices. In hindsight I should have bought more shares of these businesses. I regard the lack of more money to invest with at that moment as a mistake. I always invest the total amount of money available immediately in dividend paying stocks. As a consequence of that I’m not able to buy stocks for a period of let’s say… three weeks. The next paycheck means the next buy. Sometimes I find some cash here and there which gives me an extra opportunity, but you also have to buy food to feed your kids, you know… But I’m content with initiating a position and hoping to get a rebound in 2020 to buy another bunch of JPM and WFC stocks.
I sold Celgene (CELG) with a small loss after the announcement of being acquired by Bristol-Myers Squibb Company (BMY). This was a speculative buy and once more a lesson to stick with the plan of buying dividend stocks. Another sell was Emerson Electric (EMR) after disappointing figures and several low dividend increases in a row. I sold this position with a profit around 60%. It felt unnatural to sell a dividend growth stock as I plan to never sell my shares, especially of a company with an impressive streak of increasing their dividend for 62 years. But I feel a realistic and competitive plan is missing. It wouldn’t surprise me if it turns out I was too early with my decision to sell and they’re back hitting homerun after homerun in three years. We’ll see.
2019 was also a year of some damn fine opportunities. I missed the opportunity of buying Home Depot (HD) and Lowe’s (LOW) at attractive levels of valuation. But we also had a big pullback in stock prices and valuation multiples of Goldman Sachs (GS), A.O Smith (AOS) and Broadcom (AVGO). Man, o man… I just need more money at hand. That’s probably the biggest lesson for me, folks.
Dividend Income & Portfolio Worth
How I would have loved to close 2019 with a FY dividend income above $3,000. Too bad that number isn’t in the books (yet). But closing the year with more than $1,000 or 65% extra in extra dividend income in comparison with 2018 is also something to be proud of.
The line between all numbers of FY dividend income is rising nicely. I’m very content with that and very curious how things will develop in 2020 but also beyond 2020. A nice indicator for 2020 is the forward twelve months of dividend income as of December 31st 2019. That’s already a figure of $3,621. This means an increase in dividend income of 20% already. And we’ve only just begun…
The market value of my stock portfolio was more or less $93,000 at the end of 2019. An increase of $32K means my portfolio saw an increase of almost 50% during 2019. That’s a pretty number and is partly a consequence of a steep decline in stock prices in December 2018. As you can see, I only invested $13K new capital.
Some dividend investors write about their portfolios worth over $500,000 and their FY dividend income crushing the number of $10,000 in 2019. That seems far away in the future, while I also know that’s where I’m heading eventually if I keep focused and disciplined. What a prospect that is.
In my next post I’ll write about my goals for 2020, personally and financially. This will be the first time for me and I already notice the inspiration I get from setting some bars for myself. As they say “If you continuously compete others, you become bitter, but if you continuously compete with yourself you become better.”