Bond yields have continued their rapid ascent to start year. This isn’t a great thing for current bond holders especially if you’re in long term bonds. However, it does mean that bonds are starting to look more attractive to future investors. Luckily, I’m a combination of the two. I have a small allocation to bonds right now and will buy more in the future. It’s not great to see bond values drop but I don’t mind the higher yield.
There’s an inverse relationship between bond yields and bond price and that has certainly shown itself in recent months. My largest bond holding, the Vanguard total bond index has fallen nearly 2% YTD due to rising interest rates. Bond funds with higher duration have fallen even more. Most of my bond holdings are short to intermediate since I don’t view them as a vehicle for appreciation but one for safety and diversification. My bond allocation is low right now and I have no plans to change it in the near term. As always, I may certainly revisit that if bonds become more attractive again in light of rising rates or if I want to adjust my risk profile.
February is generally a light month for me and this year is no different. The bonus of rising bond yields is a potential to grow that. That’s due to the fact that I can now buy bonds at a lower price and a higher yield. Recently, my bond allocation has gotten above target with the stock market turbulence. That means purchases of bonds have stopped but I’m sure I’ll return to purchasing bonds again soon.
My dividend employee Steve usually takes it easy in the first two months of the year as he prepares for March. March is a big month for me as a lot of my mutual funds and individual holdings pay out then. I started the year with a low total with $80.14 in dividends in January but it was still a 44% over the previous year. That’s not a bad start in my mind.
Last year’s February came in at $79.60 and was made up of bond dividends and the payout from Apple. I only hold 50 shares of Apple but likely own a lot more overall due to it’s immense presence in every mutual fund and ETF known to man.
Apple has since raised it’s dividend by 10% and my bond holdings have grown in tandem with my portfolio. That means February should see a decent lift this year so let’s take a look.
January is a month full of bond dividends! The title makes of this post made me think of a bad financial Terminator movie. “The bond dividends are too powerful! WE MUST STOP THEM!”
December, my biggest month of the year is long gone and it’s time to start the new year. These early months are months carried entirely by bond dividends as the title makes it seem.
Generally, January is one of my lowest months for dividends. I don’t own a ton of individual stocks and none that pay in January. That means it’s up to my bonds to carry the day. I have recently been buying more of these guys due to the strong stock market returns. Bonds have fallen behind my target asset allocation so they’ve been on my buy list. That means these off months can start to pick up a bit as we go through the year.
I’ve been on a roll with 5 straight months of $100 dividend months but that’s likely set to end here. I’m an ETF/mutual fund investor which means most of my dividends fall in the quarter ending months. That leaves month like January to lag behind.
December ended my year on a high note with nearly $3k in dividends and we’re going to see a huge drop off this month. My dividend employee Steve worked hard in December and now takes a well deserved break before the next big month in March.
Last January came in at a total of $55.56 so that’s the starting point for this month. I’m expecting it to come in quite a bit higher due to the recent bond purchases I’ve been making. Let’s take a look where we’re sitting in January. Do note the new month specific graph below that makes it easier to compare the monthly results. The old graph that showed the entire year really muffled these off months due to how high March, June, September and December were.
2017 has passed on, it is no more, it has ceased to be so it’s time FOR THE 2017 YEAR IN REVIEW EXTRAVAGANZA.
What makes this an EXTRAVAGANZA? Will there be fireworks and fried dough? No, there won’t but there will be graphs and things like that and those are just as good; some might say better.
Thanks for the support bear friend.
Since I’m a resourceful chap, I kept track of my portfolio, dividends and expenses on a monthly basis. Now that the year is over and the December data is in, I can take take that data and compile it into a yearly view.
Don’t get too excited yet because there’s more than just that. I’ll also take some of this data and break it out into quarterly views and even calculate my portfolio performance for the year. Now we’re talking; it’s a party and everyone here is excited!
Happy new years everyone and welcome to the last dividend review for 2017.
This is the big one for us mutual fund and ETF investors. It’s a month I’ve been looking forward to for a while since it will be the deciding factor in whether I hit my dividend goals for the year.
I hope everyone reading had a great holiday break and enjoyed the time off. That is if you were lucky to have some to end the year.
If not, here’s a joke from joke bear to make you feel better before we get into the dividend review. I find that it’s often nice to start the day with something silly or humorous especially if you’ve had a tough week at work or if you’re like me and have to go back to work after a long break. That’s why joke bear is here to give me a joke!
What starts with an E, ends with an E but often only has one letter?
Thanks joke bear. It’s true what they say; You can throw an envelope as far as you want, but it’ll still be stationery.
Now that we’re all sufficiently tickled, let’s take a look at my dividends and how Steve, my dividend employee did in what is usually his best month of the year.
I first met Steve when I bought my first stock in college. I forget what it was and I didn’t know it at the time but when I made that first purchase, I apparently hired Steve. I didn’t plan on it but it just happened.
Three months later, he showed up at my house to say hello.
“Hey friend,” he said, “here’s 73 cents.”
“Oh,” I said, “that’s cool, but why are you giving this to me and what am I going to do with 73 cents?”
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