August Movements

IMG_20150317_205552As I am posting from, not so sunny Moscow today I felt it was nice to have picture about this beautiful city! (Moscow City CBD)

August has been a bit of a ride.

To me it’s the first time that I have to witness a strong market correction so the feelings have not been great, for the first time in my life I have been waking up one hour earlier to see what Asian markets were doing! About this I have learnt something: it’s bloody WRONG. 

The correction has been an opportunity to average down a LOT of positions, and fortunately, despite the uneasy feeling of seeing red numbers pop up and down the Portfolio, I have kept my cool and all my investing endeavors have been more towards scouting for a good buy rather than panicking for the market dip.

As you all know by now, I have started investing less than 1 year ago, when markets were quite high and fortunately I decided not to go “all in” with the money that I am deploying in this strategy, so I had (and still have) a little chest that was there to use.

This is the second thing I have learnt: must keep the dividend money liquid until an opportunity arises. The opportunity might be a drop in price or a favorable buy to lower exchange rates. No rush to put money in the market, opportunities will come in time.

Earlier in August I did buy/sell some stocks, here is the account. I won’t cover those decisions here.

SOLD

WW Grainger

The company is a dividend Aristocrat, and has a lot of positive things about it. It would have stayed in the portfolio, but yield is too low for me (less than 2% net), so I let it go.

Intel

No more high-tech unless I study more the line of products. Intel (like it happened to my shares in Apple before), is volatile by nature. High Tech is a great industry, but it’s too dependent on the new trends and feels of the public, some huge names now are struggling because they are not perceived as innovators, and even when they innovate they might get bad press=strong volatility.

L’Oreal

I had this stock on an hefty +35% at the end of July. Risible dividend but great run. Now I wish I’d sold it before. Managed to get it sold thanks to a take profit at +15%, so still pretty good, but it was a missed chance. Again a dividend below 2%, there might be a time that when the core portfolio is formed there will be space for less core holdings, right now it’s not a good time.

BOUGHT

These are the stocks that I have bought to average down higher prices thanks to the market correction:

3M (144.99 USD), Glaxo (12.805 GBP), Unilever (25.14 GBP), ENI (13.29 EUR), T.Rowe (71.02 USD), Johnson & Johnson (92.56 USD), Coca Cola (38.61 USD), AT&T (32.96 USD) ,Chevron (74.64 USD), Billiton (11.2 GBP), Walmart (68.50 USD).

All of them were taken when prices marked a 10% to 20% drop from the original price. (some even more than that)

There were some additions too:

General Electric – Let’s say that I have exchanged GWW with them, higher dividend, multinational company. From the data that I have got and the articles read online an entry in the lower 20s would have been better, but I thought that even at 26 (when I bought in) it would have been a good move.

Unibail-Rodamco – Been after them for quite some time, European Reit (this one specializes in commercial areas),it’s one of the biggest companies in Europe (if not the biggest) and have a great array of properties in their portfolio. Got them after the dip for a net potential dividend of 2.09%, plus I get the diversification that I was looking for so badly.

BASF – World leader in chemicals, lubrificants, and production of a vast number of products used in all industries around the globe. Again, because of the dip I managed to enter in a moment that would grant me a 1.97% dividend. The company is very dividend friendly (by European standards) and met all the points in my Rules of Engagement.

My checking “live” of the exchange rate landed me a very good deal on the dollar (exchanged it at 1.163), and some nice prices on some stocks above, but generally timing the market it’s a pointless thing to do.

Third learning experience has been playing around with take profits and stop losses, plus conditional orders. I will have more of those in the future (provided that I have the money to book them), especially trailing take profits, as when a stock starts to go above 30% gains it’s a shame to see it all go away during a market turn. I am fully aware that this is a very “trader-like” technique, but since double taxation kills my dividend returns and forces me to have higher yielding stocks (less “safe play”), I need a buffer to take profits where possible (and maybe buy back in the stock right after the drop).

What a busy month!

Long: Each stock mentioned above (apart from the closed positions of course!)

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2 thoughts on “August Movements

  1. The euro cost average strategy seems to work out fine for you. Good!

    From reading your last lessons learned, it seems that you are in doubt between DGI and active trading. I do understand the frustration from the double dividend taxation: living in Belgium, I suffer from the same problem. It’s no fun. That is the reason that I do not yet go DGI, but I go index investing.

    Could it be that you trading like strategy comes from the need for action? Would play money be a solution for that?

    Like

    1. Ciao ATL,

      Thanks for the comment and the questions. Actually I agree with you maybe it’s the fact that I am too nervous and in need of action, while a DGI strategy needs a more “cool” approach. This is a part that I need to work on still (though I like the thrill when I am making trades and taking positions in a stock book).

      Long time ago I invested in a bond ladder, I checked it every QUARTER (if that), my strategy comes from the “lazy portfolio management” approach, but the main problem there is that a lazy portfolio must have a good component of boring stocks like bonds. Bonds right now are untouchable, hence me going to a DGI strategy. I hope that the rise in interest rates will not destroy the stock market too much and surely future investments will be on higher yielding bonds, also to counterbalance asset allocation (now 100% stocks).

      “Play money” (if I catch your meaning correctly) is an option, in realty there are 2 stocks that I have bought more for the challenge than for the real value of them (BBEP and OKE both in the energy sector), but I do not have a lot of resources so I cannot afford to be too lax with finances in general.

      As to indexes, I am not sure… I could allocate a part of the portfolio to that, but in reality I am not the kind of investor that should look at the PF daily. I end up doing it because the internet makes it easy to check things, but I understand that it’s the wrong approach as you tend to empathize losses and undervalue gains. Plus I had a lot of negative experiences with index funds, but maybe it’s me not being able to pick the right ones… 😦

      Thanks again for the comment, gave me food for thought, it’s a good thing 🙂

      Ciao ciao

      Stal

      Liked by 1 person

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