A couple of days late, but worth the wait! The time has come to update the value of my portfolio and individual holdings again. As per usual my savings have been hard at work to make me more money, even though I enjoyed all sorts of shenanigans the past few weeks – yes, I’m looking at you, bachelor party. So let’s see what’s what.
Although I’m a dividend growth investor first and foremost, I would be lying if I told you guys that I don’t enjoy seeing my net worth tick up as the months pass by. More money, less problems – right? More savings slowly lead to a growing stream of dividend income, thus propelling my financial independence date forward.
Compared to last month’s massive €5000 plus jump, April’s net worth increase comes out at a humbling €674. That’s not much in the grand scheme of things, but when you take into consideration that I’ve seen growth almost double the size of my own savings potential, I consider April one of those “keeping both feet firmly on the ground” moments.
The meager increase of 1.06% this month won’t stop me though. I’ll continue to build my own Win for Life fund since it’s much easier to create a sustainable passive income stream that covers my basic living needs and expenses than winning the lottery.
Besides, I’m still well on my way to reach €70,000 by the end of the year. When I first set that goal at the beginning of this year I thought it unlikely, but now it almost seems a certain win. Sometimes all you need is Lady Fortune on your side!
All in all, I’m happy with the progress displayed above – complaining won’t help anyway. Notwithstanding the fact that the stock market has a big influence on my portfolio’s total value, it’s great to see that my frugal living style and savings managed to beat the market’s oftentimes irrational and volatile swings.
You can find a detailed overview of my portfolio below. Individual dividend growth stocks, exchange-traded funds tracking broad indices, and cash reserves are all listed seperately. Foreign securities were converted to Euros using the last-known exchange rate.
Dividend growth stocks
While the European Central Bank’s Quantitative Easing policy has pushed European stocks to heights never seen before over the past few months, it now turns out that those record levels aren’t sustainable. As a result, the immense drop in the bond market caused by QE reversed to the point that European bond yields have gone up sharply.
As one could reasonably expect, stocks didn’t take long to correct themselves and pull back a little bit. European investors owning foreign securities experienced a further side effect with the Euro strengthening against most other major currencies like the US Dollar, thus driving their portfolio value down even more.
My recent purchase of Belgian brewer Anheuser-Busch InBev (EBR:ABI or NYSE:BUD), for example, dropped almost 8%. Münchener Rückversicherungs-Gesellschaft (ETR:MUV2), another relatively new addition, fell by as much as 14%. US stocks all lost ground to the tune of 8%.
You can find the gains in absolute and relative numbers for each company in the table below. The cost basis for each position includes the price of the shares, a 0.27% stock market tax and brokerage fees.
|Ticker||Company||Shares||Cost basis||Mkt. value||Gain|
|BLT||BHP Billiton plc||48||928.94||1,019.94||+9.80%|
|DE||Deere & Company||7||452.61||547.77||+21.03%|
|HOME||Home Invest Belgium||15||1,396.25||1,321.50||-5.35%|
|JNJ||Johnson & Johnson||6||473.79||538.89||+13.74%|
|PG||Procter & Gamble||9||575.36||640.43||+11.31%|
|RB||Reckitt Benckiser plc||10||630.34||796.11||+26.30%|
|ROG||Roche Holding AG||5||1,233.71||1,311.12||+6.27%|
|RDSB||Royal Dutch Shell||60||1,745.65||1,686.60||-3.38%|
|KO||The Coca Cola Company||17||540.05||619.70||+14.75%|
|VZ||Verizon Communications Inc.||20||785.07||874.28||+11.36%|
I’ve said it before and I’ll say it again, but the ETFs below have been doing exactly what they were designed to do. By tracking the MSCI World, emerging markets and Europe indices rigorously, these exchange-traded funds have experienced enormous growth in the past ten months. If you’re a new investor looking for a long-term set-it and forget-it approach, I can’t recommend index funds enough.
|Ticker||ETF||Cost basis||Mkt. value||Gain|
|IWDA||iShares Core MSCI World||4,982.96||6,243.48||+25.29%|
|IEMA||iShares MSCI Emerging Markets||1,214.59||1,457.73||+20.01%|
|IMAE||iShares MSCI Europe||3,561.94||4,180.00||+17.35%|
At the moment well over 50% of my portfolio is tied to the stock market in some way or another with the remainder of my net worth mostly tied up in savings accounts. These savings accounts provide a very stable foundation to an otherwise relatively volatile portfolio.
|Name||Cost basis||Current value||Gain|
|Pension fund||1,260.00||1,365.97||+8.41% and 30% tax break|
Overall, the past few weeks were rather uneventful from a purely financial perspective. Values went up, values came down again – such is the life of an investor. Meanwhile I had a lot of fun in my personal life. Without spoiling this month’s income and expenses report too much, it’s safe to say that I feel like I’ve found a nice balance between non-essential activities and saving as much as possible.
This careful balancing act helps me to stay the path of financial independence that I have layed out before myself. I believe that consistency and sticking to a well thought-out strategy remain at the core of a financially free mindset. So if you want to make time your own, you’ll find that a steady savings rate and clear investing goals go a long way.
Onward to glory!
Thank you once again for reading and for your continued support. I appreciate every single comment and the flood of e-mails I’ve been receiving lately. They truly are heart-warming.
Another good month – it’s all going in the right direction, no matter how small 🙂 I should probably start tracking our net worth, though I don’t know if it’ll be particularly inspiring to begin with.
Exactly! And the funny thing is that my net worth went up by another €1,000 right after publishing this message due to market volatility.
I’m sure you’ll be surprised to see what your actual net worth is at already. Many people think they own hardly anything, when the opposite is the case. Besides, it’ll be a good exercise to see if you’re on the right track to financial security.
Another great month for you, NMW. Congrats and thanks for sharing
Keep up the great work
Thanks, R2R! Will do!
Keep it up NMW. You’re doing awesome bud. Month by month, slow and steady you’re winning the game. It’s a life long game. One day If the portfolio drops big time, just load up on stocks cause it’s on sale. If networth marches up, it’s all good. You win either way. Cheers my friend and thanks for sharing.
That’s the beautiful thing about dividend growth investing: if stocks go down, you buy shares offering a higher yield; if they go up, your net worth increases. Win-win!
Looks like a strong yer for you. 10K since the start of the year. Nice
Keep up the savings rate and you will smash your 70K goal fingers in the nose.
With the drop of Munich re, I might be tempted to look in that for my next buy…
Progress has been massive the past few months, mainly due to the drop in the Euro. If only I could keep this speed up over the long-run, ha!
Munich RE’s drop is unfortunate, but I’ll probably add to it too if it remains at this level for a little while longer. The high yield, decent growth rate and long-term outlook of the company makes it an excellent addition to any portfolio.
Well done NMW. You are still increasing towards your goal, even when the markets are volatile!
It’s becoming more and more difficult to build my net worth through savings rather than stock market gains, but that’s one of the best problems to have as an investor! 🙂
One question for you… On foreign currencies.
After you pinpoint a certain stock , do you wait for “more favourable exchange rates” or you go in regardless of the cost of the currency?
I do factor in exchange rates when I purchase stocks, but it’s not a deciding factor. A purchase decision is mostly based on current net yield on cost (which factors in actual gross yield, exchange rates and taxes) and growth rate.
That’s why you haven’t seen me purchase many stocks outside of the Euro area for the past few months. Those markets have become increasingly expensive due to the weak Euro.
Been out in the field a while. Nice to come back and see you posting some continued growth this past month, even though the month before was better. Keep going strong.
Glad to hear you enjoyed the outdoors for a couple of days! You can count on my being here for a very long time, don’t worry you about that. 🙂
Thank you for your continued support,
Up and on track is great news! It seems like everything is a little wonky due to exchange rates and monetary policies lately. Who knows, though, that could be the new normal. Onwards and upwards!
With both the Fed and the ECB experimenting with low interest rates and inflationary policies we do live in uncertain times for investors. What’s going on these days has never happened before, but who’s not to say that things will remain this way for a long time coming.
The only thing we can do is keep at it!
Mr. No More Waffles:
I love your blog. But what I’m *really* impressed by is your English (assuming that you’re not an American or British expat). Your English is better than mine! Plus, you “get” the idioms and pop-cultural references. Now to polish up on my Flemish … 🙂
Ha, thank you very much! That’s one of the biggest compliments you could have given me. My mother tongue is Dutch, but I hold a master’s degree in English literature and linguistics, which should explain why it’s quite good.
The idioms and cultural references are probably the result of the fact that I had access to the internet and message boards very early on in my life. At the age of six or seven I already had a connection in my room. That way I got into contact with lots of people abroad.
If you ever need a course in Dutch/Flemish, let me know! 😉
Thank you for dropping by,
Up and down will always be part of our life and cannot always be at the top. But still well done.
There’s nothing wrong with a little bit of market volatility! We might even make good use of it to buy new stocks at lower prices.
Seems like a solid month. I did pull the trigger on Ab Inbev, and added to my stake in Home Invest, Shell( today!) and KO. May is an awesome month, everytime I log into my brokersaccount more dividends appear.
Lots of new purchases – probably because of the massive dividend income this month? AB Inbev offers attractive value, especially at the lower prices. Shell took another beating, so I think you snatched a 6+% yield on cost?
Funny thing: I was also looking at KO, even though I’d rather add to my European holdings for the time being. What made you pull the trigger?
yes indeed lots of purchases because of the dividend income. Ah and I still have plenty of cash left to spend on more stocks. I added to KO because I don’t have much american stocks and my guess is that the dollar will get even stronger when they raise the interest rates. And yes a 6+ % yield on shell.
Fair point about the US Dollar gaining strength compared to the Euro.
It seems like Shell took another hit yesterday. Wish I could add some more, but I’m already heavy on RDSB. Maybe in a couple of months!
Market volatility and bachelor parties are no obstacles for you in your drive to save towards FI – well done on another great month – small increase but still an increase, heading in the right direction!
Bachelor parties aren’t breaking the bank, but I’m suffering a severe lack of sleep. Two weekends back-to-back is too much! I told my friends to stop getting married for a while. 🙂
Still on track to break $100k this year, bro! After the first huddle of $100k, it only took me 2 -3 years to get to $200k, it will move fast.
Macroeconomic is difficult to predict. Warren Buffett himself said a company with an economic is the company with one too many employee. :). The US oil supply is up, there isn’t enough barrels to store the extra gas. The OPEC refuse to lower production. Instead, they do this: bombed Yemen, create chaos out of nothing. Price went from $45 record low to $65, $60 is the break even point for oil company to stay profit (35% profit margin).
We can’t predict these bombing.
We pick the dividend route. No matter how the economy turn, as long as we can manage to save 50-70% of earned income, it’d take 7-12 years.
Unless a miracle happens, €100k won’t be happening. At the beginning of the year I would have been happy to end at €70,000, so let’s stick to that number. 🙂
The nice thing about dividend growth investing, if done right, is that your income remains stable irrespective of macroeconomic events. That’s what I love about our strategy!
Isn’t it a bit ironic when you hold both ETFs and an individual stock portfolio and you see the ETFs crushing the stock portfolio? Haha I’m in the same boat with one foot in ETFs and one foot in individual companies and it’s going to be a few years to see how it truly all plays out. 5 years should be enough time to see the performance difference between the two portfolios.
Good point. Research shows that active managers / stock pickers generally underperform compared to the market. This is why I’m only investing in index funds.
While I agree that active managed funds generally underperform the market, it’s not fair to compare my dividend stocks to the ETFs. You can see in my comment to Kapitalust’s reply why.
Both strategies have performed more or less the same over the past few months.
If you look at the previous month’s net worth update you’ll see that both my dividend stocks and ETFs dropped by about 7%. I know this is just one month, but it shows that a well-diversified portfolio of stocks doesn’t do much worse than an index fund.
The large difference in performance is because I bought all ETFs before the Euro started dropping, whereas the dividend growth stocks were purchased much, much later. Also, don’t forget to factor in the dividends received from the individual stocks. They don’t show in these tables and would bump total performance up by another about 1.5%.
I guess we’ll see in 20 years which option would have been the better one, although I’m 100% certain that both strategies will get us to where we want to.
Great to hear from you again!
Great blog, NMW, I live how transparent you are! Two questions: Why do you keep holdings that represent one thousanth of your portfolio only (see Indivor, market value 31.6 euro)? Won’t the fees eat up any gain anyway? (My bank asks for transaction fees of 25 francs/euro, so such a holding would have to grow a lot to make it worthwile…). Second, what are your views on reinvesting? It’s certainly painful when Anheuser-Busch drops by 7.9% shortly after you bought it. However, if you still believe in your analysis, you could perceive these shares of being “on sale”. Thus, will you invest further in current underperformers?
Transparency is great for readers, but also for myself. Keeping myself accountable on this blog really helps my performance!
Indivior is a spin-off of Reckitt Benckiser (1 share INDV for 1 share of RB), which is why it’s such a small position. Selling it would cost me more than just keeping it in my portfolio. Who knows, maybe this company turns into a great dividend growth investment over time? I would never purchase shares worth just €30 in total. That’s ridiculous when you have to pay around €10 in fees.
AB Inbev’s drop is quite painful, but part of the drop is because they paid a dividend. At the time I’m writing this comment shares are furthermore up again by 4%. Volatility at its finest! I am definitely looking to add to ABI, MUV2 and even HOMI when the time feels right. If I bought a stock at €112, why not buy it at €105 again if fundamentals remained the same, right?
Nice progress! If I was only in for the dividends I wouldn´t care much about the recent drops. The dividend is safe for both Munich Re and AB Inbev. The vol during the last few weeks was quite strong compared to what we are used to from the last 5 or so years. I probably will also change to updating my portfolio only every two months. I guess that keeps one from making stupid decisions to some extend. How often are you reviewing your PF?
Don’t worry about the drops in my portfolio. I’m a dividend growth investor first and foremost. It sucks that I lucked out on a higher yield on cost, but such is the nature of investing. These drops furthermore present a great opportunity to add to my positions!
If you feel like the market volatility is draggin you down, then it could help to update your portfolio just once every two to three months. You could perceive your portfolio to be underperforming if you look at it every day because of the day-to-day volatility. The chance of that happening over a two month period is much smaller.
I take a quick peek at my portfolio every day to see if something earthshattering has happened. One minute of checking the share prices and see if there’s an opportunity, but nothing more than that. Once every month I update my overall net worth and progress.