Phew, another month flew by since I last updated my net worth. And once again I feel obliged to say “what a month it’s been”: stocks were all over the place, currencies didn’t know which way to turn, and the commodities market took yet another beating. Let’s find out how this uninfluencable cocktail affected my portfolio.
Last month I cracked through the goal I had set myself for this year: €70,000 in net worth, a massive amount of money by many of my peers’ standards. Admittedly, the past version of me would probably have thought the same if he hadn’t come across the numerous financial independence blogs out there.
And even though my focus mostly lies on building a passive income stream, mainly through dividend growth stocks that increase the distribution of their profits to shareholders every year, I also enjoy tracking my total portfolio value. It’s yet another quantitative indicator on my big financial independence dashboard to show me I’m on the right track.
Interestingly, I am now at a point that I have no control anymore over the monthly movements of my portfolio. My stock market bound assets fluctuate so much that my excellent savings rate can’t smooth out the ups and downs like it did in the past. That’s why December’s net worth update shows a €889 decline compared to November even though I managed to pocket €1,587 of my salary, dividend income and side hustles.
The table above shows what I mean from July onwards. Flat numbers were followed by a decrease, then by two big spikes upwards, to finally finish with another downward turn. Still, seeing that big seven at the start of my five-figure net worth feels excellent – who would have thought I’d make my goal by November already!?
In relative numbers December’s slump comes out at -1.23%, which isn’t too bad considering most stocks have taken a much larger beating. The reason behind the relatively small decline is quite obvious since I keep quite a lot of cash on the side. On top of that I managed to save a big portion of my salary yet again, as I’ve previously said.
Like in past net worth updates you’ll find a detailed description of my dividend growth stocks, exchange-traded funds and cash below. I also highlight their performance since the time of purchase. Foreign securities were converted to Euros using the last-known exchange rate.
Dividend growth stocks
Who doesn’t love passive income that flows into your brokerage account at regular intervals? I certainly do! Since purchasing French integraded oil company Total SA (EPA:FP), my first individual stock, last year the companies below have been doing just that.
Of course, these shares also fluctuate in price over time. It’s interesting to see how increasingly some types of stocks perform remarkably well, while others continue dropping faster than a knife – and trying to catch them seems of no use at all.
For example, in November I talked about how I thought my recent acquisition of Kinder Morgan (NYSE:KMI) was a good long-term position to be in, but with the benefit of hindsight I can now clearly say it never was, at least for me. As such, I decided to cut my loss and ditch the stock – more on the entire debacle in an upcoming post, which also takes a step back and takes a good hard look at my strategy and my attempt at portfolio and dividend diversification.
I re-allocated the funds from my KMI sale to British distiller Diageo (LON:DGE) because I prefer its more conservative business model and underlying fundamentals. Of course, the fact that the spirits manufacturer traded at my initial purchase price once more didn’t hurt either.
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||110||1,908.56||1,081.13||-43.35%|
|DE||Deere & Company||7||452.61||482.99||+6.71%|
|HOME||Home Invest Belgium||30||2,682.00||2,809.20||+4.74%|
|JNJ||Johnson & Johnson||20||1,769.41||1,876.69||+6.06%|
|NG||National Grid plc||100||1,332.11||1,253.08||-5.93%|
|PG||Procter & Gamble||23||1,594.66||1,654.26||+3.74%|
|RB||Reckitt Benckiser plc||10||630.34||839.56||+33.19%|
|ROG||Roche Holding AG||5||1,233.71||1,247.01||+1.08%|
|RDSB||Royal Dutch Shell||110||2,956.64||2,257.20||-23.66%|
|S32||South 32 Ltd.||48||20.04||32.72||+63.26%|
|KO||The Coca Cola Company||17||540.05||664.86||+23.11%|
|VZ||Verizon Communications Inc.||20||785.07||838.50||+6.81%|
Compared to dividend growth stocks, the exchange-traded funds I hold in my brokerage account are less exciting – and that’s a good thing. Their set-it-and-forget it approach remains one of my favourite ways to invest for the long-term in markets all across the world.
However, compared to last month they took quite a beating too, losing about 7% in value. I’m not one to compare the performance of my dividend growth stocks to an index, but the decline of my ETFs is in the same ballpark as my dividend stocks. That’s why I once again decided to purchase another seven shares of the MSCI World ETF, which I’ll probably continue doing so for the foreseeable future.
|Ticker||ETF||Cost basis||Mkt. value||Gain|
|IWDA||iShares Core MSCI World||5,474.69||6,536.25||+19.39%|
|IEMA||iShares MSCI Emerging Markets||1,214.59||1,183.14||-2.59%|
|IMAE||iShares MSCI Europe||3,561.94||3,814.80||+7.10%|
Exchange-traded funds still too exciting for your taste? Well, then this category of assets is for you! Due to the fact that they mostly consist of cash-based savings these assets don’t change much over time, with the sole exception of my pension fund, which I plunked another €77.5 into so I can take full advantage of the tax benefits it offers.
On top of that I am still rebuilding my emergency fund at a rate of about €500 each month after I used it to purchase some stocks on the cheap at the end of August. I know it’s a rather large amount of money idling in low-interest accounts, but I prefer to keep a rather large amont of cash on the side.
|Name||Cost basis||Current value||Gain|
|Pension fund||1,782.50||1,931.08||+8.34% and 30% tax break|
Success! Even though my total net worth went down, I’m still over my goal of €70,000 for the year!
With a year-end bonus and a large tax refund coming my way, I’m certain to crush the challenge I had set for myself at the start of this year – awesome. Whoever first told me that saving and investing your money is the best way to build wealth, thank you.
Now that 2015 is drawing to a close it’s time we all reflect on the past year and set new objectives for next year. I’m looking forward to going through the numbers of my savings and investments to see where I can improve and thus shorten the time to when my assets cover all my living expenses. I hope you are too.
Stay tuned! Thank you for reading and for your support.