Archive for the ‘Dividend Income’ Category.

2020-09 Dividend Income Report

Here is the dividend income report for September, 2020.

The monthly dividend income came out to $1836.64. The yearly income total for 2020 through the end of the month was $6659.02.

The income for September, 2019 was $2112.65, and the yearly income for 2019 through the end of August was $6485.69.

I am starting to question whether or not indexing, or dividend growth investing (DGI) or any other buy-and-hold philosophy is going to work out over the next few years. Granted, many people say that these are the most important times to stick with buy and hold. But things are not working out too well.

I have been engaged in DGI for about ten years. Maybe that is not enough time for the magic of compounding to happen, but the pace of my income growth is making me wonder if I will have enough money when I am old. Between COVID and interest rate repression, my bond income has decreased a lot. From April until October, the dividend per share for BND has gone from 19 cents a share to just over 15; here are the amounts from April to October: 0.1905, 0.1739, 0.1687, 0.1624, 0.1587, 0.1531, 0.1503. RLI paid a whopping 7 cents more than it did three months ago. This is not the stuff that affluence is made of. I thought interest rates would have gone up five years ago. They keep going lower. One of the effects is people play more games with money. Some people blame the central banks for the way people react to low interest rates. You can blame central banks for the rates, but not peoples’ reaction.

Nevertheless, I am thinking about doing some things that run counter to indexing, DGI, and buy-and-hold in general. Like putting all my money in bonds in the A and B months and the beginning of the C month, and putting it into stock ETFs during the second half of the C month. Or putting a lot of it in covered call funds.

In other news, RWR is still above where I sold it. I am starting to think a market correction is like “the storm”, or the second coming of Christ: Always predicted, but never seems to arrive. (Granted, market corrections are a known historical phenomenon and not something only believed by crazy people who are too stupid to focus their anger on something productive.)

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each September from 2011 through 2020:

Month YTD Amount 3MMA 12MMA
2020-09 $6659.02 $1836.64 $750.42 $887.30
2019-09 $6485.69 $2112.65 $744.85 $831.74
2018-09 $3476.52 $506.44 $430.49 $518.06
2017-09 $4796.80 $775.50 $562.76 $551.05
2016-09 $4260.70 $720.86 $505.47 $499.02
2015-09 $3744.49 $659.59 $443.06 $432.46
2014-09 $2993.02 $536.75 $353.04 $335.39
2013-09 $2374.05 $395.65 $293.78 $294.44
2012-09 $2425.78 $315.21 $283.66 $283.00
2011-09 $2121.78 $243.26 $256.81 $233.01

Here are the securities and the income amounts for September, 2020:

  • Vanguard Total Bond Market ETF: $149.94
  • Vanguard Total Bond Market ETF: $38.41
  • Vanguard Total International Bond ETF: $10.14
  • Vanguard Utilities ETF: $192.58
  • RLI Corp: $24.80
  • SPDR S&P Dividend ETF: $711.50
  • SPDR S&P Global Dividend ETF: $709.27

Big Jim is trying to keep up with all the changes.

Image from Wikimedia, assumed allowed under Fair Use. Painting of angel by Guariento di Arpo (1310-1370).

2020-08 Dividend Income Report

Here is the dividend income report for August, 2020.

The monthly dividend income came out to $205.28. The yearly income total for 2020 through the end of the month was $4822.38.

The income for August, 2019 was $63.10, and the yearly income for 2019 through the end of August was $4373.04.

There is not a whole lot to report. I might have more to say on the September report.

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each August from 2011 through 2020:

Month YTD Amount 3MMA 12MMA
2020-08 $4822.38 $205.28 $790.58 $910.30
2019-08 $4373.04 $63.10 $788.78 $697.89
2018-08 $2970.08 $48.14 $549.51 $540.48
2017-08 $4021.30 $581.69 $558.23 $546.50
2016-08 $3539.84 $522.20 $493.44 $493.92
2015-08 $3084.90 $406.45 $427.26 $422.22
2014-08 $2456.27 $323.94 $348.41 $323.64
2013-08 $1978.40 $305.11 $279.05 $287.74
2012-08 $2110.57 $316.04 $280.53 $277.00
2011-08 $1878.52 $322.35 $254.56 $225.45

 

Here are the securities and the income amounts for August, 2020:

  • Vanguard Total Bond Market ETF: $155.22
  • Vanguard Total Bond Market ETF Other Account: $39.76
  • Vanguard Total International Bond ETF: $10.30

 

Big Jim doesn’t have a lot to say this month; there haven’t been too many changes to his life.

Image from Wikimedia, assumed allowed under Fair Use. Painting of angel by Guariento di Arpo (1310-1370).

2020-07 Dividend Income Report

Here is the dividend income report for July, 2020.

The monthly dividend income came out to $209.33. The yearly income total for 2020 through the end of the month was $4617.10.

The income for July, 2019 was $58.79, and the yearly income for 2019 through the end of July was $4309.94.

There is not a whole lot to report. I am still waiting to see if the world will end some more, or if we have come to the end of the endings.

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each July from 2011 through 2020:

Month YTD Amount 3MMA 12MMA
2020-07 $4617.10 $209.33 $781.84 $898.46
2019-07 $4309.94 $58.79 $818.06 $696.65
2018-07 $2921.94 $736.90 $548.35 $584.94
2017-07 $3439.61 $331.08 $541.56 $541.54
2016-07 $3017.64 $273.36 $464.99 $484.27
2015-07 $2678.45 $263.13 $412.44 $415.35
2014-07 $2132.33 $198.43 $333.77 $322.07
2013-07 $1673.29 $180.57 $258.23 $288.65
2012-07 $1794.53 $219.72 $261.24 $277.53
2011-07 $1556.17 $204.83 $235.96 $211.69

Here are the securities and the income amounts for July, 2020:

  • Vanguard Total Bond Market ETF: $158.50
  • Vanguard Total Bond Market ETF Other Account: $40.60
  • Vanguard Total International Bond: $10.23

Big Jim tries to be consistent, even when nothing happens.

Image from Wikimedia, assumed allowed under Fair Use. Painting of angel by Guariento di Arpo (1310-1370).

2020-06 Dividend Income Report

Here is the dividend income report for June, 2020.

The monthly dividend income came out to $1957.12. The yearly income total for 2020 through the end of the month was $4407.77.

The income for June, 2019 was $2244.44, and the yearly income for 2019 through the end of June was $4251.15.

All in all it was a good month. I have one less fund than I did last June (I sold RWR in May), but overall I did alright. I did buy some more BND for my Roth IRA at the end of June. So now my Roth will get income every month.

RWR is still doing well. Perhaps I sold too soon. Or perhaps the damage in the economy has not hit the stock market yet. I think I will stick with my plan to just sit tight until next year and then buy something. If I stick with Ron DeLegge’s plan, I should buy RWR. I am also thinking about KBE, the SPDR S&P Bank ETF (ETFDb page here,  State Street page here). Banking is not a major asset class, but let’s face it: Banks make money coming or going.

I am also thinking about getting XYLD, the S&P 500 Covered Call ETF by GlobalX S&P 500 Covered Call ETF (ETFDB page here, GlobalX page here). Ron DeLegge has a premium newsletter with the Monthly ETF Income Trade. It sells covered calls in SPY, GLD and I believe one other ETF as well. It looks like XYLD might do something similar. It pays monthly. Ron DeLegge gives a dollar amount for what you would have made if you put $100,000 in his income portfolio (which would be in your non-core portfolio). If you had $100,000 in XYLD, you would have made about $483 in July. Not quite as good as Ron DeLegge’s portfolio, but not bad considering it’s less effort. I might hold off for a few more months. I don’t know how this strategy will do if the S&P 500 goes down. I think XYLD is more correlated to the level of the S&P 500 than Ron DeLegge’s portfolio.

My Roth IRA might get a lot bigger because I might quit my job and add my Roth 401K to it. There are a lot of things I do not like about where I work. I know this is not a good time to quit, but I frankly hate it there. This is no way to live.

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each June from 2011 through 2020:

Month YTD Amount 3MMA 12MMA
2020-06 $4407.77 $1957.12 $778.78 $885.91
2019-06 $4251.15 $2244.44 $959.55 $753.16
2018-06 $2185.04 $863.49 $319.68 $551.12
2017-06 $3108.53 $761.91 $539.42 $536.73
2016-06 $2744.28 $684.76 $464.00 $483.42
2015-06 $2415.32 $612.21 $411.83 $409.95
2014-06 $1933.90 $522.86 $333.10 $320.58
2013-06 $1492.72 $351.48 $257.79 $291.91
2012-06 $1574.81 $305.84 $260.85 $276.29
2011-06 $1351.34 $236.50 $235.38 $203.23

Here are the securities and the income amounts for June, 2020:

  • Vanguard Total Bond Market ETF: $164.38
  • Vanguard Total International Bond ETF: $10.28
  • RLI Corp: $24.73
  • SPDR S&P Dividend ETF: $700.64
  • Vanguard Utilities ETF: $270.44
  • SPDR S&P Global Dividend ETF: $786.65

 

Big Jim is holding tight in his portfolio, but might make big changes in his life.

Image from Wikimedia, assumed allowed under Fair Use. Painting of angel by Guariento di Arpo (1310-1370).

2020-05 Dividend Income Report

Here is the dividend income report for May, 2020.

The monthly dividend income came out to $179.08. The yearly income total for 2020 through the end of the month was $2450.65.

The income for May, 2019 was $150.95, and the yearly income for 2019 through the end of May was $2006.71.

The one big event in May is that I sold all my shares of RWR from my IRA. I bought at $100/share, it got to $67 when it paid the March dividend, then it went up to $80, and I started thinking about selling. When I sold it was at $71, now it is around $77.

The March dividend for RWR was 58 cents, and the June dividend was 70 cents. I thought the June dividend would be lower. I am not caught up listening to Ron DeLegge’s Index Investing Show or The Phil Ferguson Show, so I do not know what they are saying about what is going on. (I am actually a couple of years behind with The Phil Ferguson Show). I guess I need to work on my investment policy statement and written investment plan. I need to figure out my rules for when to buy and when to sell. I think they might be different for ETFs. A lot of DGI investors sell when a company cuts their dividend, but for funds the divident varies (I assume this is due to people going in and out of the funds).

Given that I sold based on price, maybe I am not as dedicated to indexing and dividends as I would like. I like to think I make my own decisions, but maybe I do not. I guess the capital gains conditioning is stronger than I thought. But I do think that real estate and REITs will have a hard time in the future.

Wolf Street points out that a lot of mortgages are in forbearance right now. We might not see the pain in real estate for a while. I think office REITs will get hosed.

I am on the fence about working from home. I don’t miss the commute, but I am getting tired of the dogs, the trucks, and the neighbors smoking pot all the time. It is easier to focus at the office. I hope that working from home does not become mandatory forever. I think it would be a mistake for companies to do that. Granted, some people do like it. It would be a mistake for companies to not explore it, or mix the two. If you used to lease five floors in a building and now you only need three or four, that is a no-brainer.

When the iPad came out, all the Apple fanboys were saying that in five years, nobody would buy a laptop or a desktop ever again, everybody would be all tablet all the time. That did not happen. I think WFH will be the same. I think there will be changes, but I don’t think offices will go away.

I have read a lot of articles and watched videos in which people have said that big cities in the US might lose population. I think this would be a tragedy financially, economically and environmentally. We have put in a lot of time and money into building cities, and it would be stupid to throw it all away and pave over more farmland because some people are too stubborn to wear masks. A lot of big cities in Asia (except maybe Wuhan) and Europe are flattening the curve through masks and distancing.

It looks like Realty Income is still able to increase their dividend. If you look at their top 20 tenants, there are a lot of food stores. They might be okay. This is something to keep an eye on. I might revisit RWR in January and see if I think it is worth getting back into. Their biggest stock is Prologis, which is a REIT for logistics. Somebody has to get the food to the grocery store. Their second biggest holding is Digital Reality which focuses on data centers. Perhaps selling was a mistake.

I have done pretty well investing on my own. Sometimes it is because I am smart, sometimes because I am lucky. It looks like with RWR I was neither.

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each May from 2011 through 2020:

Month YTD Amount 3MMA 12MMA
2020-05 $2450.65 $179.08 $747.49 $909.85
2019-05 $2006.71 $150.95 $592.51 $638.08
2018-05 $1321.55 $44.66 $398.51 $542.66
2017-05 $2346.62 $531.68 $553.90 $530.30
2016-05 $2059.52 $436.85 $479.79 $477.37
2015-05 $1803.11 $361.99 $411.92 $402.51
2014-05 $1411.19 $280.01 $304.77 $306.30
2013-05 $1141.24 $242.65 $260.91 $288.11
2012-05 $1268.97 $258.15 $257.13 $270.51
2011-05 $1114.84 $266.55 $233.03 $194.61

 

Here are the securities and the income amounts for May, 2020:

  • Vanguard Total Bond Market ETF: $169.02
  • Vanguard Total International Bond ETF: $10.06

Big Jim admits he does not know how to handle a crisis.

Image from Wikimedia, assumed allowed under Fair Use. Painting of Saint Michael by Guariento di Arpo (1310-1370).

2020-04 Dividend Income Report

Here is the dividend income report for April, 2020.

The monthly dividend income came out to $200.13. The yearly income total for 2020 through the end of the month was $2271.57.

The income for April, 2019 was $483.26, and the yearly income for 2019 through the end of April was $1855.76.

There is not a whole lot to say. I might post more in the May report.

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each April from 2012 through 2020:

Month YTD Amount 3MMA 12MMA
2020-04 $2271.57 $200.13 $753.19 $907.51
2019-04 $1855.76 $483.26 $588.35 $629.22
2018-04 $1276.89 $50.88 $405.77 $583.24
2017-04 $1814.94 $324.66 $532.02 $522.40
2016-04 $1622.67 $270.38 $461.86 $471.14
2015-04 $1441.12 $261.30 $409.21 $395.68
2014-04 $1130.58 $196.43 $323.64 $303.18
2013-04 $898.59 $179.23 $262.82 $289.40
2012-04 $1010.82 $218.56 $274.05 $271.21

Here are the securities and the income amounts for April, 2020:

  • Vanguard Total Bond Market ETF: $184.76
  • Vanguard Total International Bond ETF: $10.92
  • Brokerage Money Market: $1.99
  • Brokerage Treasury Account: $2.46

 

Big Jim doesn’t have a lot to say. His life has become pretty monotonous.

Image from Wikimedia, assumed allowed under Fair Use. Painting of calling Peter and Andrew by Duccio di Buoninsegna (c. 1255–1260 – c. 1318–1319), aka “The Duce”.

2020-03 Dividend Income Report

 Here is the dividend income report for March, 2020.

The monthly dividend income came out to $1863.26. The yearly income total for 2020 through the end of the month was $2071.44.

The income for March, 2019 was $1143.33, and the yearly income for 2019 through the end of March was $1372.50.

Up until the coronavirus pandemic, it was looking like switching from individual stocks to ETFs was working out very well. I had sold my shares of RWR that I held in a taxable account, and even without those shares, I had the best March ever. (Granted, I still need my three-month moving average to be about triple what it is in order to live off dividend income.) I still have RWR in an IRA.

I sold my RWR shares in my taxable account and just about broke even. I made some money in dividends, but I had to pay taxes, and sold when the price was at $90. I know I am always saying that people put too much emphasis on price and capital gains, but if something goes to $0, then there are no dividends. Besides, I do not know what is going to happen, and I might need some cash at some point. I think selling after a 10% is not a bad rule to go by.

I am still not sure what all my rules should be for investing. There is a saying on Wall Street: Bears make money, bulls make money, pigs and sheep get slaughtered. I think this is another way of saying plan your work, and work your plan. Should I sell the ETFs in my tax-advantaged accounts? Or should I let them go as they are since I do not need to touch them for 10 or 20 years? (I assume things will be better in 10 or 20 years.) I was planning on making an investment policy statement as Ron DeLegge recommended. Perhaps I will put his podcast back into my MP3 player and see what he has to say. I will also see what Phil Ferguson has to say about what is happening. I knew at some point there would be a recession (there always is at some point). I know that stocks might go down. I did not think there would be 15% of the labor force filing for unemployment in a month.

I may even look into the ideas of “The Black Swan” author Nassim Taleb, although there are some issues with Taleb and his ideas. He may know what to do when the world is ending, but he sounds like an angry crank when talking about every other issue. When I was living in Chicago, I knew someone who worked on the floor of the NYSE on 9/11. He thought it was kind of funny that Guiliani got a reputation as a guy you want during a crisis. He said that if Guiliani did not have a crisis to handle, he was making one of his own.

The basic strategy of Taleb is “tail-risk hedge”. One firm had a 10x return in March using tail-risk hedge. Here is another page from the Felder Report explaining tail-risk hedging. CALPERS recently exited one of two tail-risk hedges that according to Bloomberg could have returned 3,600%, or about $1 BILLION dollars. They kept a second one that still had a positive return (see article here). One issue with CALPERS is that the Chief Investment Officer did not tell the board that he had exited one of the hedges at a March meeting (he exited the hedge in January). Maybe he is an Austin Powers fan: Why make billions when we can make millions?

I am not clear how these tail-risk hedges work. The article from The Felder Report talked about some of the options expiring, some not expiring. It all sounds complicated for someone who already has a job doing something else. I know they can lose money during the good times and make money during bad times. Frankly, that is one reason I am leery of them. I remember back in 2007 or maybe early 2008, when things were starting to look shaky, Bloomberg Markets magazine had an article about David Tice, who at the time managed the Prudent Bear fund. The next month, the magazine published a letter from a reader about the article that said something like: This guy lost money for five or six years; he makes money one year, and now he thinks he is a genius.

I am leery of stock market bears and the hyperinflationistas. They keep predicting disaster all the time, and when it finally happens they want everyone to think they are geniuses. Yet they never acknowledge they are wrong more often than they are right.

Can an individual investor like me even get a tail-risk hedge? Can I do it without getting taken to the cleaners? And who is the counterparty? Are there multiple counterparties? What if the world ends, and the counterparty doesn’t have the money to pay up? If CALPERS did not walk away from a $1 billion dollar payday, where was that money going to come from?

There is one ETF called Cambria Tail Risk ETF (page on ETFDB.com, page on ETF.com, page at Cambria Funds) which according to ETF.com, invests 1% of its holdings in “out of the money put options on the S&P 500 Index”. Ron DeLegge’s ETF Premium monthly income trade uses covered calls. TAIL appears to be the ONLY tail-risk ETF out there.

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each March from 2012 through 2020:

Month YTD Amount 3MMA 12MMA
2020-03 $2071.44 $1863.26 $690.48 $931.10
2019-03 $1372.50 $1143.33 $457.50 $593.19
2018-03 $1226.01 $1099.99 $408.67 $606.06
2017-03 $1490.28 $805.35 $496.76 $517.88
2016-03 $1352.29 $732.13 $450.76 $470.38
2015-03 $1179.82 $612.48 $393.27 $390.27
2014-03 $934.15 $437.87 $311.38 $301.75
2013-03 $719.36 $360.85 $239.79 $292.68
2012-03 $792.26 $294.68 $264.09 $269.92

 

Here are the securities and the income amounts for March, 2020:

  • Vanguard Total Bond Market ETF: $167.25
  • Vanguard Total International Bond ETF: $9.50
  • Vanguard Utilities ETF: $186.77
  • RLI Corp: $23.62
  • SPDR S&P Dividend ETF: $682.41
  • SPDR Dow Jones REIT ETF: $179.94
  • SPDR S&P Global Dividend ETF: $596.84
  • Brokerage Money Market: $3.77
  • Brokerage Treasury Account: $13.16

Big Jim knows that he will need a plan that can work in good times and bad.

Ancient woman praying, painting in Catacomb of Callixtus, 2nd-4th century, file found on Wikimediaassumed allowed under Fair Use.

2020-02 Dividend Income Report

Here is the dividend income report for February, 2020.

The monthly dividend income came out to $208.18. The yearly income total for 2020 through the end of the month was $196.17.

The income for February, 2019 was $229.17, and the yearly income for 2019 through the end of February was $138.45.

I am skipping January since there was not much income. Just the money market funds. The bond funds do not pay out in January.

I am writing this from notes I took before the markets went haywire due to the Coronavirus. I will go into more detail in my post about my March income. So I might write something here that is contradicted by what I write later.

One of the blogs that I follow is Dividend Growth Investor. I consider this to be one of the better dividend growth investing blogs out there, but recently the author had a post that said some things that I disagree with (or more accurately, they recently sent an older post to their mailing list subscribers that I disagree with).

The author is generally against dividend ETFs. I am not sure I agree with that. Keeping track of individual stocks is a lot of work. The author says that dividend ETFs are “Good for beginning investors who are still learning and have less than $10,000.” I think you need a lot more than $10K to go into individual stocks. At least $100K. Maybe even a million. If you have less, you wind up buying very small amounts, and you have a lot to keep track of. For 3M (MMM), I had 10 shares, and each quarter I was getting 0.08 shares. It took seven years to buy two shares. One argument they give against dividend ETFs is “Investors have no say about which stocks the ETF holds.” Yes and no. You can look at the criteria of the index and then pick an index you like.

Granted, I have no idea how well the Dividend Aristocrats will hold up. We will see who is right. I think that companies that have been increasing dividends for 25 or more years will do pretty well. But these days, “pretty well” is relative.

One claim the author made that I do not agree with is that an S&P 500 Index fund could be a dividend growth fund. They recommend IVV by iShares. I might move some money into a broader index fund as a temporary refuge, but I think for dividend investing the broader indexes are a bad idea. Yes, general index funds (not targeted towards dividend investing) have increased their dividends over time based on the dividends from their constituent companies. But that is not their main focus, so I do not think they should be considered dividend funds. Cash flow is better than capital gains. The author says Amazon, Facebook and Google might pay a dividend someday. And maybe they won’t. A dollar in a stock that does not pay a dividend is a dollar wasted. Why put money in dead weight?

One fund the author recommends (with disclaimers) is Schwab US Dividend Equity ETF (SCHD) (ETFdb page here, Schwab page here)  It tracks the Dow Jones U.S. Dividend 100 Index. To be eligible, stocks must be in the Dow Jones U.S. Broad Market Index, and have paid a dividend for at least 10 years. Unlike the S&P Composite 1500, Dow Jones U.S. Broad Market Index does not filter out companies that are not profitable. (Here is the “Financial Viability” criteria from the methodology document for the S&P Composite 1500: “The sum of the most recent four consecutive quarters’ Generally Accepted Accounting Principles (GAAP) earnings (net income excluding discontinued operations) should be positive as should the most recent quarter.“) However, the Dow Jones U.S. Dividend 100 Index methodology document states the index ranks the stocks on four factors:

  • Cash flow to total debt
  • Return on equity
  • Indicated dividend yield
  • Five-year dividend growth rate

It ranks all eligible stocks, and then picks the top 100. If it looks at dividend growth rate, I guess maybe this is a dividend growth index. I will have to look into this one.

It does seem like even though Dow Jones bought S&P that there are some differences between the DJ indices and the S&P indices. The S&P indices (at least the domestic ones) seem to filter out companies that have not made a profit in the past year. This is probably why Tesla is not in the S&P 500. When it does make a profit, it seems to lose at least the same amount the next quarter. The S&P indices seem to combine automation and profit. We will see what happens to this index going forward.

Note: Not all S&P Indices look at financial metrics. Under “Financial Viability” for S&P Total Market Index, the methodology document states “There is no financial viability requirement for index eligibility.” According to ETFdb.com, the iShares Core S&P Total U.S. Stock Market ETF (ITOT) tracks the S&P Composite 1500,  but the prospectus available from the ITOT iShares page says ITOT tracks “the S&P Total Market Index™(TMI) (the “Underlying Index”), which is comprised of the common equities included in the S&P 500® and the S&P Completion Index.” Perhaps the fact that the index is called “TMI” is a warning. According to its page, the S&P Completion Index “comprises all members of the S&P TMI Index except for the current constituents of the S&P 500®.” So it looks like ITOT’s prospectus chose a wordy way to describe itself. The TMI page lists some iShare funds as the official funds, including ITOT. The S&P Composite 1500 Index (which does have financial viability criteria) is tracked by State Street’s SPDR® Portfolio S&P 1500® Composite Stock Market ETF (SPTM).  That fund’s page on ETFdb.com states it tracks the Russell 3000 Index. The S&P Composite 1500 page states the ETF is SPTM (although they simply list the fund by name and do not provide a link). I do not know why the pages at ETFdb.com are incorrect as to which funds track which indices. Perhaps S&P and Russell changed funds and ETFdb.com did not know about it.

It pays to know your index. Check the home pages for your funds and your indices on a regular basis. You should only invest in about half a dozen at a time. Granted, most dividend indices are based on other indices, so you might have to look at another index to understand the one you are investing in.

It was either Ron DeLegge on the Index Investing Show or one of his guests who pointed out that one trick a lot of active managers pull is to compare their funds to Russell indices, particularly the 1000, 2000 and 3000. Very few managers compare their performance to the S&P 500, 600, 400 or Composite 1500. Unlike those S&P indices, Russell indices just look at market capitalization, and do not consider any financial metrics.

Granted, in my work 401(k) I really have few choices about where my money goes. But they put the money into an S&P 500 index fund. We should automate, but not run on auto-pilot.

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each February from 2012 through 2020:

Month YTD Amount 3MMA 12MMA
2020-02 $208.18 $196.17 $1259.50 $871.11
2019-02 $229.17 $138.45 $847.72 $589.58
2018-02 $126.02 $66.43 $654.60 $581.51
2017-02 $684.93 $466.05 $570.90 $511.78
2016-02 $620.16 $383.08 $524.89 $460.41
2015-02 $567.34 $353.85 $492.40 $375.72
2014-02 $496.28 $336.61 $363.62 $295.33
2013-02 $358.51 $248.39 $348.20 $287.16
2012-02 $497.58 $308.90 $337.51 $264.48

Here are the securities and the income amounts for February, 2020:

  • Vanguard Total Bond Market ETF: $176.31
  • Vanguard Total International Bond ETF: $9.71
  • Brokerage Money Market: $3.39
  • Brokerage Treasury Account: $6.76

Big Jim does not think automating something in your life means you should give up control.

Angel of the Last Judgement, 11th century, abbey of Sant’Angelo in Formis, assumed allowed under Fair Use.

 

2019-12 Dividend Income Report

Here is the dividend income report for December, 2019.

The monthly dividend income came out to $3,570.31. The yearly income total for 2019 through the end of the month was $10,474.31. I finally broke the 10K barrier.

The income for December, 2018 was $2,313.99, and the yearly income for 2018 through the end of December was $6,971.76.

One of the reasons I got more income is that I increased my stake in BND in my IRA. I also got shares of RWR in a taxable account.

I might get a premium account at ETFGuide.com. It is a site run by Ron DeLegge, the guy who runs the Index Investing Show. They do a monthly income trade using covered calls on some ETFs. He always gives the amounts based on investing $100,000. I will be investing less than that. I will email and see if it is worth it if I invest less money. I would no longer be a purely dividend investor, but it might be an extra $3,000 a year.

Maybe I will get a membership and see how the trades pan out. I can track the ETF prices without buying options. I still need to hold on to RWR for a while to avoid captial gains tax.

I am going to need more money soon. My rent will be going up by about $50/month (which is more than 20%). I am almost 50, and I will be eligible for catch-up contributions in my Roth IRA and Roth 401K. Right now I could put all the extra into my Roth 401K, but then I would have nothing left for my IRA. I will need about $7K a year.

There is an option to put my Roth 401K in a brokerage account, but the trading costs are pretty high. I can only rollover to an IRA when I leave the company. A lot of places do not offer 401Ks, so for now I am staying. I wish I could leave for a day, roll my money over and then come back.

I need a better job in general. I am not too thrilled with the technology at the job I am at, but not too many people use the technology I am interested in.

I started qigong recently. A few people have said it has changed their lives, and a few said they got better jobs. We shall see.

One thing I also did recently is I converted a small part of my traditional IRA to a Roth. I want to see how much I will pay in tax. Ron DeLegge says that now is the time to convert since tax rates will go up in a few years. The problem is I do not want to use up all my savings paying for the taxes on a conversion. He says to keep a margin of safety. Maybe he would disagree with this, but I consider my emergency savings to be my margin of safety.

I also plan on taking Ron DeLegge’s advice and come up with a written investment plan.

I still sometimes wonder if what I am doing will be enough. On one hand, if I was investing my Roth 401K from work the same way I invest the rest of my money, my totals would be higher. But I have been doing this for a while, and I am still not seeing the wild compounding I was expecting. I started going all-in on dividend growth investing in 2010. (I do not include 2010 numbers in my monthly posts because I started partway through the year.) In the nine years I have been doing this, I have made $52,389.49. I still think going for capital gains is just the Greater Fool Theory, and I have no interest in that. We will see what happens.

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each December from 2011 through 2019:

Month YTD Amount 3MMA 12MMA
2019-12 $10474.31 $3570.31 $1329.54 $872.86
2018-12 $6971.76 $2313.99 $1165.08 $580.98
2017-12 $7536.98 $1837.78 $913.40 $628.08
2016-12 $6076.53 $1027.76 $605.28 $506.38
2015-12 $5472.07 $954.52 $575.86 $456.01
2014-12 $4438.02 $909.86 $481.67 $369.80
2013-12 $3406.20 $594.59 $344.05 $283.85
2012-12 $3585.01 $686.10 $386.41 $298.75
2011-12 $3091.99 $514.94 $323.40 $253.92

Here are the securities and the income amounts for December, 2019:

  • Vanguard Total Bond Market ETF: $173.12
  • Vanguard Total International Bond ETF: $10.51
  • Vanguard Utilities ETF    VPU    ETF: $216.67
  • RLI Corp: $101.33
  • RLI Corp: $23.31
  • SPDR S&P Dividend ETF: $802.33
  • SPDR Dow Jones REIT ETF (second account): $572.57
  • Vanguard Total Bond Market ETF: $180.53
  • Vanguard Total International Bond ETF: $284.98
  • SPDR Dow Jones REIT ETF: $308.68
  • SPDR S&P Global Dividend ETF: $884.40
  • Brokerage Money Market: $4.33
  • Brokerage Treasury Account: $7.55

Big Jim wonders if the first thing Olivia de Havilland thinks when she wakes up is: “Suck it, Kirk Douglas.”

Image from Wikimedia, assumed allowed under Fair Use. Painting of the Transfiguration by Duccio di Buoninsegna (c. 1255–1260 – c. 1318–1319), aka “The Duce”.

2019-11 Dividend Income Report

Here is the dividend income report for November, 2019.

The monthly dividend income came out to $126.48. The yearly income total for 2019 through the end of the month was $6904.00.

The income for November, 2018 was $50.86, and the yearly income for 2018 through the end of November was $4657.77.

There is not a lot to report for the past month. I deployed some of my cash and bought more BND, so the income from that fund is a lot higher this month.

In other news, the Trump administration tightened the work requirements for SNAP benefits. (SNAP is basically food stamps.) While I think Trump is the worst president ever, I do not disagree with this move. At least not entirely. See news articles here at NBC News and here at USA Today. The economy is doing well, so on one hand it makes sense to tighten requirements. But what will they do if the economy slows down? Of course, that is assuming that we have a GOP president when that happens. Hopefully we will not. (I work for a company that makes and manages the benefits management server for a few US states.)

I think this might be another indicator a recession will be coming very soon. Back towards the end of the last expansion, people were talking about putting the Social Security trust fund into the stock market. Right at the worst possible time to do so.

Humans are good at contra-indicators. If/when the next recession hits, I bet a lot of states will do what they did the last two times: Cut services when people have a greater need for them, and raise taxes when people have less capacity to pay. We should have higher taxes and fewer services during the good times, and use the reserve in the bad times. When would the bad times happen? When everybody says, “Why don’t we just spend the money now?”

In other news: Trump was impeached by the House. Best day ever.

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each November from 2011 through 2019:

Month YTD Amount 3MMA 12MMA
2019-11 $6904.00 $126.48 $843.65 $768.17
2018-11 $4657.77 $50.86 $562.56 $541.30
2017-11 $5699.20 $560.60 $559.31 $560.58
2016-11 $5048.77 $506.98 $502.98 $500.27
2015-11 $4517.55 $460.83 $477.55 $452.28
2014-11 $3528.16 $291.27 $357.30 $343.53
2013-11 $2811.61 $252.75 $277.74 $291.48
2012-11 $2898.91 $247.99 $262.78 $284.49
2011-11 $2577.05 $246.37 $232.84 $240.81

Here are the securities and the income amounts for November, 2019:

  • Vanguard Total Bond Market ETF: $103.89
  • Vanguard Total International Bond ETF: $10.86
  • Brokerage Money Market: $4.32
  • Brokerage Treasury Account: $7.41

Big Jim says this is the best day ever.

Painting of Rejection of Joachim’s Sacrifice by Giotto di Bondone (1267 – 1337), at his website. I actually got the image file from somewhere else, but his site has a page about it. Assumed allowed under Fair Use.