Monthly Income Update – Apr 2022

Dear Readers,

While it has been incredibly hard to make some free time to blog and/or engage with the fintwit community in the last few weeks, I try my best not to miss out on my monthly income updates on this blog.

The monthly income update series is a pretty important component of this blog both for myself as well as readers of this blog. Why? Firstly, it is perhaps the most important (if not the only) metric of my portfolio’s performance. The goal of my portfolio from day 1 has been simply: generating a reliable growing stream of passive income. Too often this aspect is lost on others in the investing community who are hyper-focused on beating the market and capital appreciation. While capital appreciation is important to my portfolio as well, it is not the primary objective. For this reason, I do not even bother sharing the full portfolio value in my performance updates. Lets focus our results on our starting goals and ignore the noise.

Secondly, it serves as motivation for both myself and my readers. This is not a medium to brag about “look how much money I made this month”. Instead, I want to show YOU, the reader, the power of the compounding effect through this investing strategy. And if an average joe like myself can do this, you can do this too!

Lets get into the update then…

April was a brutal month for stocks in general. S&P500 is down by nearly 10% in the last one month alone and several popular growth stocks have been crushed. As far as my portfolio goes, it is not fallen atleast as dramatically as the S&P500 (w.r.t time-weighted return, 6% drop since the start of the year as compared to a nearly 13% drop in S&P500 during the same period).

Dividend Income Received

Sl. No.Company / ETF (ticker)Amount
1.JP Morgan Chase (JPM)$11.11
2.Realty Income Corp (O)$12.22
3.STAG Industrial (STAG)$3.51
4.CareTrust REIT (CTRE)$6.51
5.Orion Office Reit Inc. (ONL)$0.30
Total$33.65

So a total of 5 companies contributing a grand total of $33.65 for the month in terms of dividend income. If you are wondering and have some thoughts along the lines of “why the heck is this guy going nuts over 33 bucks for? That’s hardly going to cover any expenses!”, just bear with me for a second. Firstly, this is 33 bucks that I did not have have before and something which I earned while I was focusing on my life and day-job. Secondly, at the same time last year, I had made $12.59 in monthly dividend income. Granted that I have invested capital in these stocks in the during this time, but some of these stocks have also raised this dividends by a certain percentage to add to this income. The year-over-year increase is around 167%!! Not bad for something that I did not even lift a finger for, eh?

Also, some of these contributions have just happened organically i.e. take ONL for instance. This is not a REIT that I had originally invested in, but rather was a product of a spin-off from Realty Income late last year. I simply just held onto the shares I received from the spin-off.

I decided to not trade options during this month again. Firstly, my mental bandwidth was exhausted due to some family health issues recently. Secondly, the downward trend in the overall stock market and the potential positions where I could write some covered calls meant that my asking price for an OTM option call contract was going to be that much lower. It also turns out to be the earnings season, and there is generally a lot of volatility in price action closer to earnings release. I decided to pass on this for this month atleast.

Buys and Sells during this month

Trading was very very minimal during this time, what with all the health issues in my family. There were no sells, because nothing had fundamentally changed with any of my holdings to warrant such a move.

As far as Buys, I added slightly large tranches to my following positions: JPM, WHR, TROW.

All of the above seemed to be trading near (or below) my fair value estimates. TROW has been absolutely hammered in 2022. I have a pretty sizeable position this holding and I will continue to hold while keeping a close eye on the next earnings release to see the management’s discussion of the results.

As far as smaller tranches, I also added some PEP, PG and HD. Among the three, HD seemed reasonably valued while PEP and PG were my “Staying in the game” purchases i.e. purchases which I had to make for my core holdings after a fixed time limit per my investing strategy.

IRAs

This seemed like a good time to max out both mine and my spouse’s IRAs. The downward trend in the market presented a good opportunity to invest in a broad-market index fund that I hold in my IRA. This is something that I ensure I complete during the early half of the year, as a result of which I can keep any remaining capital for investing in my individual brokerage account. I want to stress that as far as priorities, maxing out my 401(K), HSA and then IRA accounts are much much more higher priority for me than investing in any individual brokerage account. It is just a matter of discipline and ensuring that I invest in my retirement accounts first before investing in anything else.

Summary

Another month is in the books. This has been a roller-coaster of a month for me with starting a new job and also dealing with family health issues at the same time. Here is hoping for a better month up ahead!

See you all in the next post. Until then…

Update – 5/1/2022

Dear Readers,

This is intended to be a brief post. Blog updates have been slow over the last few weeks. This is owing to two major reasons. Firstly, I recently switched jobs and, in general, the initial few days/weeks at the new job are rough, as one begins to ramp up and get up-to-speed. Secondly, one of my family members based outside the country landed up in the hospital again due to a recurrence of an issue with the surgery that had happened earlier in the year. This is terrible news to receive at any time, but it is especially hard when you have just switched jobs.

As a result, this last month has been mentally and emotionally draining for myself and my family. We were seriously contemplating if we would need to travel out of the country on an urgent basis. This was especially challenging considering our employment benefits (primarily health insurance) per the new employer’s plan were yet to kick in and travelling during this time could be tricky.

While life was happening, I obviously had to ignore my portfolio and the world of investing in general.

Things have thankfully started coming back to normalcy again and the family member is out of danger (touch wood). I finally had a chance to look at my portfolio and saw all the red, which made me….. well…excited. 🙂 Why? Because this means potential buying opportunities. April was expected to be a slow month for me as far as earned dividend income. I will cover more of this in a monthly income update post that should be up very shortly.

As I write this, earnings season is on us, so I will be using my free time in the next few weeks digesting the data in these 10-Qs especially for companies that are on my “need to analyze further” list.

I sincerely hope that all of you guys reading this post are doing well, staying safe and healthy and making good progress in your own journeys towards financial independence.

See y’all in the next post!