Stock Portfolio Update August 2019

Another month, another update. Here it is my Stock Portfolio Update for August 2019.

If you are a new reader, be aware that my stock portfolio is just one of my 5 basket total portfolio. While I have a large exposure to the Stock Market, I also have other investments.

For me personally, I consider reviewing my portfolio a good exercise and part of a learning process.

It forces me to look at each position and see it’s impact on my portfolio. Every month, I review my stock portfolio and if you missed my last Stock Portfolio Update you can find it here.

Since I am adding funds to this account every week or so and, therefore, adding to existing positions or opening new positions, it makes sense I review it at least once a month.

My long term focus is a mixed bag of ETFs, dividend-paying stocks, blue-chip stocks, and a few growth stocks to hopefully beat the market in the long run.

Current Stats

Number of Stocks Holdings: 40
Number of ETFs Holdings: 4
Number of Dividend Stocks: 28
Cash Position: 16.52%

Top 3 Holdings:

1. StoneCo LTD (5.95%)
2. Pfizer (5.19%)
3. Overstock (4.31%)

There were some major changes in my top 3 holdings from last month.

New Positions

StoneCo LTD

StoneCo is quite a volatile stock as you can see through the price action above. I have been in and out of the stock with great returns and far better than the simple buy and hold approach.

In the long term it might not be necessarily true as we know. A buy and hold strategy on good stocks tends to be better than trading it and potentially missing a good run.

In August, I made it my top holding and bought it around the $30 price level. I am aiming for at least 20 to 30% return if the stock does manage to go back to the $45 level. Before that, it needs to clear a strong resistance at $38.

Overstock

Overstock is a speculative play. The stock price action has been crazy in recent months and this is where technicals are a good help. These help to identify momentum and there is clearly a bullish trend since early July.

I have traded this stock successfully during the past months so I know volatility is part of the game. Do not trade this stock if you can’t handle it.

A major resistance at $22 was broken on high volume and seems big money is flowing into the stock. Time to play along with the big players.

On the fundamentals, Overstock is investing quite heavily on the blockcahin unit of the business and registering patents that might as well be gold mines in the future. This stock is under my radar for a potential explosion.

Other Positions

I have added other positions but most of them are speculative plays. When the market is volatile and we have daily big moves, I do think is better to play the short term.

Trading for me is almost the same as dividend payouts but with larger gains. It represents a quicker way to grow my account and fund my long term plays on which I apply the buy and hold strategy.

Added Positions

Energy Transfer LP

Energy Transfer is a dividend play. This stock brings diversification ot my portfolio, is part of the CCC list, a well know resource for dividend investors. If you are interested in dividend stocks, it can be a good starting point. Please find info here.

Weakness in August and a dip to the $13 level, made it a good dip buy opportunity. With an impressive dividend yield of almost 9% and a record of 13 years of dividend growth, it seems to me a good and steady stock in my portfolio.

Pfizer

Pfizer still has not recovered from the big dip in July, so it is still on my shopping list. As one of the major players in the healthcare sector, I am happy to keep adding to my position.

This stock has outperformed the market as you can from the comparison below:

Portfolio 2 with 100% allocation to PFE has consistently beaten the market for more than 20 years so I am quite confident it will continue to do so.

Square

Square has been hammered in August so I have added heavily to my position. For sure this will be one of top 10 holding in September if it keeps crashing.

As we can see, it broke the down channel and it can well be headed to the $50 level. I strongly believe in this company and their business in the long run, so I am confortably adding to my position while keeping my exposure limited to 4-5% of my portfolio.

Closed Positions

Now, let’s see what I have sold!

I have sold my position in Vodafone (VOD). I have decided to take profits here after a run of almost 20%. I also have exporsure to other communications companies so I felt this position was rather redundant to others.

I might re-enter this position on a pullback so I am keeping it on my watchlist.

Portfolio Allocation

I have decided to look into my portfolio sector allocation to make sure I am not favoring certain sectors too much. While I do see long term performance coming from Technology and Services, I want to get exposure to other sectors as well.

So here it is:

Without much surprise, my top 3 sectors are Technology, Financials and Services. So it seems I am really overweight on any sector in particular which can be a good thing in case we do have recession in 2020-2021.

Portfolio Performance

Taking into account the previous updates I was not getting much value from the previous performance evaluation so decided to look into it and come up with something more meaningful to me.

In a nutshell, I want to be able to compare the real performace of my portfolio against the S&P 500 Index ETF.

This does not seem an easy thing to do and would require a lot of manual work to calculate it. To be able to actually do this, I would have to take into account the dates of my deposits, the amounts, fees, dividends and then compare against purchasing an S&P500 index fund on the same dates and with the same amounts.

Maybe there is some tool to be able to do this in an easy way but I would still have to the manual input work and keep it updated.

Instead of that I prefer to take an easy approach and focus on my portfolio total growth (added capital + capital appreciation). At the end of each month, I note down the value of my accounts. I have started doing it in June so here is the data so far:

I can still note my Top 3 Performers currently on my portfolio:

Plan for September

As much as I wanted to keep adding new capital to my portfolio, the month of September will be quite bad in that sense.

Mortgage payments, university fees and other small unexpected expenses will slow down my savings plan. I had to reduce my automatic investing contributions for the time being and re-arrange my budget.

Hopefully, in the last quarter of the year, I will be able to make extra contributions by keeping my budget really tight and reduce my free budget.