Here’s my dividend income and Income Fund update for February 2016.
The following chart shows the cumulative dividend income so far this year compared to previous years.
The chart below shows the contributions to the total income of $379 this month.
I’ve started to include the interest from my money market account which added another $8.80 (2%) since cash is currently a large percentage of my Income Fund. All cash is now held in a money-market fund at my brokerage.
Dividend income from stocks
9 stocks paid dividends this month as detailed below.
These nine are unchanged from last February when they paid $75.44 although I’ve increased my holdings in PG and LNT over the last year. The payment this month is $96.96; an increase of 28%.
On average the dividends have increased by about 6% over the last year with T, PG and VZ showing the lowest dividend growth of 3% or less.
Dividend growth is calculated from the last 4 payouts compared to the 4 before that. The yield calculations are annualized, or extended forward a year based on the current dividend payment against the market value.
Dividend income from funds
I received income from my two bond funds this month; $233.52 from VWEAX (Vanguard High-Yield Corporate Bonds) and $39.66 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.
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 February 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.
The following table shows the detailed asset allocation in my portfolio.
My long term plan is to limit individual stocks to 10% of the total, but I’ll be achieving this for the most part by adding new capital to the mutual fund components rather than selling individual stocks. However, I am slowly selling out of some stocks as I want to reduce the number of individual positions to simplify my portfolio.
Likewise I’m no longer adding to the bond funds although I aim to eventually keep them at a total 15% weight. VWESX is at its target weight of 5%, but VWEAX is heavily over-weight at the moment as I’m only rebalancing via new contributions in stocks. It decreased another 1% this month to 22.7% with the final target being 10%.
Cash is overweight too as it increased more than I’ve been spending it down.
My Income Fund increased in value from $212,918 to $221,690 this month although the increase was from the additional of $9,989 of new capital.
I’ve been tracking my fund performance like an Index Fund since the beginning of the year and my overall investment performance in February was -0.44%. I’m comparing this performance to VTSAX which lost -0.04% in February.
Year to date performance is -2.49%, compared to -4.22% for VTSAX, although this is not a one-to-one comparison since the cash and bonds I hold offset some of the stock volatility; useful when the market is going down but not so good when the market goes up.
The new capital I added ‘purchased’ 102.4763 shares of my Income Fund and the share price dropped by $0.4352 to $97.5142.
|Date||Price ($)||Change||YTD Change||Value||Cost Basis||VTSAX Change|
So a reasonable month considering how the stock market has been behaving of late. My investments as a whole decreased in value less this month than in January but dividend income increased.
My efforts to decrease my cash reserves fell flat this month but with good cause as I received a bonus from work which I promptly saved. I plan to spend this down over the remainder of the year.
Edit: 3/28/16 – I restated the Income Fund performance numbers as I’m now taking distributions into effect correctly, and am now comparing to VTSAX instead of the S&P 500.
Quote of the Day
Whenever you find yourself on the side of the majority, it is time to pause and reflect.