Trouble in paradise! This will be the first net worth update with a negative month-over-month result, ouch! Since many other bloggers experienced negative returns the past month already, I couldn’t lag behind of course. So let’s take a look at the damage that was done to my precious nest egg.
In total my portfolio lost a full €102 since my last update one month ago. Honestly, considering the troubled state of the stock markets, both this side of the Atlantic and across the pond, the drop could have been a lot worse, but my once again staggering savings rate for July cancelled out most of the losses nicely.
As you can see, my financial freedom fund has now grown to the point that I no longer can influence its performance all by myself. So I’ll consider this temporary drop a luxury problem. I’d rather lose some money because I have tons invested already than seeing my portfolio’s value climb sharply because I own nothing at all.
That’s why this month’s drop of -0.15% doesn’t bother me too much. Besides, for a dividend growth investor a stock market pullback only opens up new possibilities. Exactly, cheaper stocks means a higher overall yield on cost, which in turns boosts future dividend income. Not a bad position to be in, right?
You can find a detailed overview of my portfolio below. I list all individual stocks, exchange-traded funds, my pension fund and savings accounts. Foreign securities were converted into Euros using the last-known exchange rate.
Dividend growth stocks
Of course, I had to take advantage of cheaper stocks, especially when strong dividend players with a large economic moat are on sale. As a result you’ll find two of my holdings differ from last month’s update.
Firstly, I decided to purchase 14 more shares of health care and consumer goods giant Johnson and Jonhson (NYSE:JNJ). The number one American blue chip company experienced a rather stale year in the market to the point I couldn’t say no to its 3% yield and growth prospects any longer.
Secondly, I upped my stake in another widely known American consumer goods manufacturer, namely Procter and Gamble (NYSE:PG). Recently the company took quite a nosedive because of its less than stellar earnings, which I viewed as the perfect opportunity to grow my position. It’s true that PG’s performance isn’t up to par, but I believe it remains a good long-term play.
At one point during the past month I had over €30,000 invested in individual dividend stocks, but prices slipped since then. Still, I’m happy with the portfolio I’ve put together in just one year, especially because these companies are likely to boost my passive income every year.
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||777.29||-16.33%|
|DE||Deere & Company||7||452.61||594.37||+31.32%|
|HOME||Home Invest Belgium||15||1,396.25||1,278.00||-8.47%|
|JNJ||Johnson & Johnson||20||1,769.41||1,778.32||+0.50%|
|NG||National Grid plc||100||1,332.11||1,224.37||-8.09%|
|PG||Procter & Gamble||23||1,594.66||1,565.21||-1.85%|
|RB||Reckitt Benckiser plc||10||630.34||843.27||+33.78%|
|ROG||Roche Holding AG||5||1,233.71||1,272.47||+3.14%|
|RDSB||Royal Dutch Shell||60||1,745.65||1,553.60||-12.15%|
|S32||South 32 Ltd.||48||20.04||52.28||+160.88%|
|KO||The Coca Cola Company||17||540.05||631.01||+16.84%|
|VZ||Verizon Communications Inc.||20||785.07||855.05||+8.91%|
Passive and boring – the perfect description for the three ETFs that I keep. This month, however, the Emerging Markets ETF shook things up because of its exposure to the wild stock market ride and currency devaluations in China.
Nevertheless, combined the MSCI World, MSCI EM and MSCI Europe funds perform great. They moreover follow the same movements as my dividend portfolio, which tells me that I’m doing a pretty good job of diversifying my individual holdings. Indeed, when taking on an increasing amount of risk, the only safety mechanism at your disposal is good diversification.
However, most of you know that I don’t like to benchmark my dividend growth stocks to an index because both investing strategies rely on a completely different outcome to achieve financial freedom.
|Ticker||ETF||Cost basis||Mkt. value||Gain|
|IWDA||iShares Core MSCI World||5,214.95||6,454.56||+23.77%|
|IEMA||iShares MSCI Emerging Markets||1,214.59||1,250.10||+2.92%|
|IMAE||iShares MSCI Europe||3,561.94||4,089.36||+14.81%|
Next to the stock market’s upward and downard bursts, this category remains relatively stable. As usual I added another €77.5 towards the yearly maximum of €930 in my personal pension fund, while my emergency fund and savings accounts remained untouched.
This month I also used €1,000 in emergency funds to add to my position in Procter and Gamble, as explained above. I’ll top up the fund when my paycheck hits at the end of the month since I prefer to keep a rather large amount of cash on the side.
|Name||Cost basis||Current value||Gain|
|Pension fund||1,492.50||1,667.14||+11.70% and 30% tax break|
Just three months ago it looked like I was going to break through the €70,000 net worth goal I set for myself in 2015 without too much of a hassle, but the almighty stock market overlords clearly decided otherwise. The strong growth at the start of this year has slowed down significantly, but I’m still on track to crush my target.
And the best part? All the while the dividends continue rolling in. I’m almost at the magical €500 mark for this year, which is simply awesome considering I bought my first stock and received my first dividend income almost one full year ago.
But wait, there’s more!
It’s been one year since I first published my net worth for you guys to follow along – and what a year it’s been. I gained a little under €24.000, awesome! Tot put that number into perspective: that’s my entire net annual salary, excluding any bonusses.
Read that again.
My net worth grew by my full-time job income from the past twelve months. If that’s not a massive accomplishment, I don’t know what is. And none of this would have been possible without your encouragement and support, so thank you very much.
I hope you’re as excited as I am for the future!