September 2015 – Dividend income and portfolio update

Once again I’m a dollar short in my updates but fortunately not in my dividend income; it’s almost December and I’m only just getting my September update out. But now that I’ve prepared the bulk of the updates for December’s upcoming Dividend Champions List, it’s time to sit back, listen to Amy Macdonald and run through some (old) numbers.

Most of my portfolio is actually in Vanguard funds; the individual stock portion is steadily growing and the portfolio as a whole is slowly tilting towards individual stocks and stock funds as I’m not purchasing any more bond funds. But we’ll start with income first and then go over the portfolio allocation.

Dividend Income

My total dividend income from my portfolio in September was $919, an increase of 238% compared to August’s $386. The huge increase is from the stock funds in my portfolio which paid their dividends this quarter. Back in September 2014, I earned $680 so this is an increase of 35% over the same time last year!

The following chart shows the cumulative dividend income so far this year compared to previous years.

My total income at this point in the year has just exceeded that from November last year which is a nice milestone to reach. My year end target of $5,850 should be an easy reach from here.

Income breakdown

The chart below shows what contributed to my total income of $919 this month.

I received income from individual stocks as well as from all four Vanguard mutual funds.

Dividend income from stocks

23 stocks paid dividends this month as shown below.

The yield calculations are annualized, or extended forward a year based on the current dividend payment against the market value. The value amounts include contributions from stocks added after the ex-dividend date so yield shown may be a little lower than the current yield.

Dividend income from funds

I received most of my income this month from my two stock funds. VHDYX (Vanguard High Dividend Yield Index Fund) and VTIAX (Vanguard Total International Stock Index Fund). These pay their distributions quarterly; the distributions are taxed as qualified income and so are taxed at a lower rate. They are also fairly tax-efficient and don’t generate a whole lot of capital gains.

My bond funds also contributed a fair amount of the total; VWEAX (Vanguard High-Yield Corporate Bonds) and VWESX (Vanguard Long-Term Investment Fund). These pay their distributions monthly and the distributions are taxed as normal income and not the lower qualified dividend rate but their yield is higher.

My Income Portfolio

Here’s an overview of my Portfolio and how it’s made up as of the end of September 2015.

My Portfolio consists of individual dividend stocks as well as 4 Vanguard mutual funds and cash. There’s not much change in the allocation from last month. The bond portion is down a percentage point from last month as the bond value dropped quite a bit and I’ve been adding new capital only to the stock components.

Asset Allocation

The following table shows the detailed asset allocation in my portfolio.

Portfolio Performance

Overall this month my portfolio decreased by $1,481 to $202,677, a decrease of 0.7% from last month’s $204,159.

In September I added $2,249 of new capital to my portfolio as a mixture of cash and stock purchases. I spent $624 of my cash reserves, added $1,453 of new shares, $1,070 of VHDYX and $350 of VTIAX. My stock purchases were 16 shares of EMR and 20 shares of XOM.

Since the overall decrease in portfolio value was $1,481 and I added $2,249 of new money, this implies a real market decrease of $3,700 or about 1.8%.

This month is the first month for my total value to drop below its basis; the bond funds are the major contributor there since the prospect of interest rate rises continues to chip away at their value. But on the bright side, my portfolio is still $27,811 higher than at the start of the year and the dividend income continues to increase.

 

Quote of the Day

What a different world this would be if people would listen to those who know more and not merely try to get something from those who have more.

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