Portfolio Update: July 2015
Is it just me or does time go by much faster as we get older? I can’t believe July is already history, but what’s past is past and with that comes another portfolio update. My portfolio is my ticket to financial independence; the more money I can save and invest today, the faster I’ll get there. I’m investing in high quality businesses that have long track records of increasing their dividend payouts each year. This rising cash flow will one day cover all of my expenses and I’ll be financially free.
I witnessed my very first stock spin-off over the month when medical device maker Baxter International (BAX) parted ways with their biotechnology division Baxalta (BXLT). It was sad that my total dividend was cut, but based on Baxter’s rich spin-off history I had a sneaking suspicion it would go down that way. Both companies reside in my ROTH IRA where they’re sheltered for many years without the ability to touch those dividends anyway, so I’m eager to let them ride. I’ll be posting an analysis of Baxalta in the coming weeks and will further discuss my expectations from both businesses going forward.
In July I initiated a position in Eaton Corporation (ETN) and then added to it again shortly after the stock dropped over 8% from my original purchase price. When there are no fundamental changes to a business and the market offers me more dividend income for less invested capital, I simply can’t refuse. I also continued adding to Wal-Mart (WMT) in my Loyal3 account. In total, I invested $3,231.02 over the month. I was cautious with my 2015 contributions goal due to my upcoming wedding, our Greek Island honeymoon, and the unpredictable nature of my career in the entertainment industry. I’m happy to say I’m well ahead of where I thought I’d be and I will 100% beat this goal in August.
These constant capital infusions have helped my portfolio value increase every single month since the end of 2013 when it was worth less than $6,000. I’ve come a long way, and if I can keep at this for a few more years I’ll have way more options and flexibility in life. At the end of July, my overall portfolio value stood at $68,511.56. This was a 4.65% increase over June’s $65,469.16 and year over year the portfolio grew 170.10% from just $25,365.07.
The energy sector is the main eye sore and weakness of my portfolio at the moment. While I’m a firm believer in averaging down, the fundamentals of these businesses have changed dramatically over the past year. History shows us that these downturns in oil prices tend to shoot back up before we know it, but I’m still cautious and uncertain because I haven’t personally experienced this before in my short investing career and there are so many global factors to consider. I’m bullish in the very long term, but I’m going to continue to wait on the sidelines until my gut feeling and logic tell me it’s time to back up the truck. Here is a portfolio snapshot I took at the end of the month: