January 2016 – Income Fund update

The first month in 2016 started poorly. Here’s my dividend income and Income Fund update for January 2016.

Dividend Income

My income from my Income Fund in January was $304, a 4.4% decrease compared to the $318 I received in January 2015. So not the best start to the year and this was caused by lower distributions from the fixed income portion of my Income Fund. The same thing happened in January 2014 so it’s not the first time and February might have similar problems.

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

Income breakdown

The chart below shows the contributions to my total income of $304 this month.

I received income from individual stocks ($29 or 9% of the total) as well as from two Vanguard mutual funds (VWEAX and VWESX). I’m no longer adding to the bond funds although I aim to eventually keep both at 5% weight. VWEAX is heavily over-weight at the moment as I rebalance with new contributions. It was 30% of my portfolio a year ago and should fall below 20% at the end of this year.

Dividend income from stocks

7 stocks paid dividends this month, although I no longer own one of them (ALB) having sold it last year after the ex-dividend date.

The yield calculations are annualized, or extended forward a year based on the current dividend payment against the market value.

Aside from the addition of Walmart shares last July and the new issue of Chubb shares last month, the stock holdings haven’t changed since last January when they paid $21.08. This year’s equivalent payment is $22.8; an increase of 8%.

Dividend income from funds

I received income from my two bond funds this month; $233 from VWEAX (Vanguard High-Yield Corporate Bonds) and $42 from 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.

The two stock funds that I own pay their dividends on the 3rd month of each quarter so January and February are much lower for income.

My Income Fund

Here’s an overview of my Income Fund and how it’s made up as of the end of January 2016.

My Income Fund consists of individual dividend stocks as well as 4 Vanguard mutual funds plus cash. I’ve been slow at spending the surplus cash although this year I plan to be more aggressive in spending it.

Asset Allocation

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

Portfolio Performance

My Income Fund dropped in value from $215,011.28 to $212,917.80 this month, despite my making $2,125 in new purchases and converting $1,000 of cash into the stock funds.

I’ve been tracking my fund performance like an Index Fund since the beginning of the year and my overall investment performance in January was -1.71%. The stock market as a whole did relatively worse over the month despite gains in the last week (the S&P fell 5.1%, the Nasdaq 7.9% and the Dow fell 5.4%). This is not a fair comparison since the cash and bonds I hold offset some of the stock volatility; while some steep declines will be reduced so will large gains.

The new capital I added ‘purchased’ 16.0233 new shares of my Income Fund; although the share price dropped by $1.71 to $98.2938.

Date # Units Price ($) Change YTD Change Value Cost Basis
Dec-15 2150.1128 100.0000 0.00% 0.00% 215,011.28 215,011.28
Jan-16 2166.1361 98.2938 -1.71% -1.71% 212,917.80 216,577.09

Summary

It’s disappointing to see a drop in the month-over-month increase but on a quarterly basis I think I’ll still have a good increase in income.

I’ve also been doing some restructuring in my accounts this month in the name of simplification; including setting up a new automatic purchase schedule. I’ll be making four purchases a month with this schedule with a 60:40 split between US and International Stocks via the two Vanguard funds.

And I’m having fun managing my Income Fund like an index as only a numerical Excel geek can!


Quote of the Day

The investor of today does not profit from yesterday’s growth.

0 thoughts on “January 2016 – Income Fund update”

  1. Solid month of dividends DL even though it was a slight YoY decrease. I don’t really track the dividends/distributions from the funds I own but since we’ll be getting tax stuff together soon maybe I should see just what they’re spinning off each year. Hope you have a great weekend!

    1. Hi JC,
      Weekends always seem to be too short, but they’ll be getting longer when my Income Fund matures 🙂 All of my Income Fund is held in taxable accounts so I look at it as one big whole…tax filing is always an interesting time though!

      Thanks for stopping by and enjoy the rest of your weekend!

      Best wishes,
      -DL

  2. You have a nice list of companies paying you in January. No excessive and dangerous high yields. Just good old fashioned dividend paying stocks. It’s OK if YOY did not go up. As you stated, your quarter will surely beat last year. Thanks for sharing. Look forward to your next update.

    1. Thanks for your support as always DH and I appreciate your insight 🙂 The 8% increase from those old-fashioned stocks will beat any salary raise that I might get this year, and I didn’t have to do anything to get that increase!

      I hope you had a great January.

      Best wishes,
      -DL

    1. Hi DFG,
      Glad you’re catching up and I hope your February was better! It’s my turn to be behind now as I had computer issues for the last couple of weeks!
      Best wishes,
      -DL

Leave a Reply

Your email address will not be published. Required fields are marked *