Portfolio Four Updated July, 2017

Portfolio four is almost 8 years old.  The beneficiary contributed $4000 and the trustee $8000 for a total of $12,000.  The current value is $15,082 for a gain of $3,082 or a 5% rate of return, adjusted for the timing of cash flows.  See detailed PDF here or go to the link on the right side of the page.

The portfolio has some technology stocks that are doing quite well, which include Box and Oracle (you could also call Tesla a partial technology stock, as well).  The oil stocks of Devon, Shell and Statoil have generally been hit by the continued fall in oil prices.  The stock prices of Shell and Statoil have held up better than Devon because they kept their high dividends; Devon cut their dividend and has continued to fall (there are other factors at play as well).

It is important in all these portfolios not to just look at the current share price when compared with the purchase price; you need to take into account dividends, as well.  The oil stocks look bad on stock price alone but when cumulative dividends paid are tracked as well, the situation is much better.  That does not mean that we should hold stocks just for the dividends, but it is a very important factor in long run performance.  To date this portfolio has earned $1735 in dividends, which makes up more than half of the total return earned to date.

Portfolio Six Updated April, 2017

Portfolio 6 is 4 1/2 years old.  The beneficiary has contributed $2500 and the trustee $5000 for a total of $7500.  The current value of the portfolio is $7806 for a gain of $306 which is about 4% or 1% / year over the life of the fund.  You can see a PDF of the details here or on the link to the right.

The portfolio is generally doing well.  The stock mix is 55% US stocks and the largest exposure area is oil, at 27% of the total.  High dividend stocks (3% yield or greater) make up 44% of the portfolio.  We sold off Coca Cola Femsa (KOF) recently.  The oil sector has generally been hit by the decline in oil prices per barrel but they have come up significantly from their lows.

Portfolio Four Updated January 2017 – Tax Time

Portfolio Four is a bit over 7 years old.  The beneficiary contributed $4000 and the trustee $8000 for a total of $12,000.  The current value is $13,932 for a gain of $1932 or 16%, which is about 3.3% / year when adjusted for the timing of cash flows.  You can see the detailed spreadsheet at the link on the right or download it here.

The portfolio is generally doing well. We sold LinkedIn (LNKD) because they were bought by Microsoft and gave up on Coca Cola FEMSA (KOF) which was hurt by the decline in the Mexican Peso and recent election results.  We did not sell many of the energy companies which (mostly) held on to their high dividends and have risen recently with the uptick in oil prices.  It is important that you look at the “total return” which includes dividends because some stocks look like they have losses just based on price bought vs. today when in fact they’ve been positive due to dividends.

The portfolio had about $240 in dividends for an average yield of about 1.7%.  This is a good rate but down a bit from last year because we sold Seaspan (SSW) and Garmin (GRMN) which had high dividends.  Most of our sales are still OK in hindsight but Garmin has gone up a bit since we sold it.  We had a long term capital loss of $474 due to sales of LNKD and KOF, above.

Overall Themes Impacting Stocks during November – December 2014

There has been a lot of activity in the stock market recently. Rather than put this on the top of every post I am going to summarize and then refer to these themes within each individual portfolio update. Here are some of themes that have hit many of the stocks:

– crude oil prices crashed – the price of crude has gone from $90 – $100 / barrel to $60 and under. This impacts oil and gas related stocks in a negative way. It also has some positive effects on goods that (poorer) consumers spend more on, companies like Wal-Mart
– the US dollar rose – many foreign currencies fell against the rising US dollar. This hits all of these ADR’s since they fall when the dollar rises and vice versa. The amount of the impact depends on their currency’s particular performance vs. the US dollar
– geopolitical risks – stocks in Russia and some other hard hit areas have fallen very hard. We don’t have many of these in our portfolio
– tech continues to rise – among all of these items we have had a rally in some US stocks, particularly tech stocks and some other sectors
– dividend yields are valued – since interest rates are low and continue to fall (measured by yields on US treasuries), companies that pay out income (dividends) are (mostly) well valued by the market. Note that it is unusual for dividend yields to be this high relative to US Treasury yields

The question is – are these short term themes or long term themes, or somewhere in the middle? If oil prices have gone down, do you sell now, at their lower valued state? Or will they come back over some (reasonable) period of time.