Hi hi, if you are invested in the stock market, you have probably been feeling the pain and seeing your investments go down in value day by day with no end in sight.
For example, the S&P 500, an index that tracks the 500 largest US stocks based on market cap, was down around 8.8% in April and down 16.11% year-to-date….definitely not something you’d like to see.
With that said, I still want to do a monthly portfolio update post, helping us keep track of our investments and letting you guys follow along on our investing journey. We’ll talk about how our portfolio did in April, what we bought and sold, and our plan moving forward in this market.
Overall, our portfolios fell 6.47% in April. Our total market value at the end of March was $55,804.51, and it fell to $52,191.22 at the end of April.
All Buys & Sells
We did have quite an active month for April. The reason for this is we wanted to consolidate our portfolio to suit our goal of building passive income for FIRE, which results in us selling out some of our very high growth, non-dividend tech companies as well as some of our dividend-paying companies. These companies are also the smaller holdings of our portfolio, so we’d rather use the proceeds from these companies to buy more of the other core holdings.
For our tech companies, we completely sold out of AMD and NVDA. For AMD, our cost basis was $324.64, and we sold it for $375.89 (16% gain). For NVDA, our cost basis was $500.23, and we sold it for $709.93 (42% gain). Although these 2 companies have very high growth prospects, they are some of the smaller portions of our total holdings, and we would rather invest this money in other high dividend growth companies that align more to building a passive income. Plus, it was good that we sold these while we were in profit (could’ve had larger profits if we sold them earlier, but hindsight is 20/20)
For our dividend-paying companies, we completely sold out of JNJ, KO, and TRV. For JNJ, our cost basis was $1,652.08, and we sold it for $1,775.86 (7% gain). For KO, our cost basis was $2170.57, and we sold it for $2415.68 (11% gain). For TRV, our cost basis was $1,586.73, and we sold it for $1,842.10 (16% gain). Yes, these are dividend-paying companies with long and consistent dividend histories. However, with an average of 5% as their 5-year dividend compound annual growth rate (CAGR), we decided to move the money to companies with higher dividend growth rates. There are better companies out there with stronger business outlooks, higher dividend growth rates, and currently selling for much more reasonable valuations.
We used the money from our sales along with our monthly deposits to buy more into BLK (0.7994 shares at $740.96/share), HD (9.27027 shares at $304.28/share), SBUX (17.44158 shares at $82.55/share), TROW (.36911 shares at $135.46/share), and TXN (20.21283 shares at $181.92/share).
These are high-quality companies that have a long history of paying and raising dividends, with an average 5-year dividend CAGR of 13% – 20%. Not only that, they have been increasing their revenues and profits consistently as well. They are also companies with good business models and competitive advantages in their respective sectors.
For example, BLK is a global investment firm that manages around $10 trillion, with it usually being one of the top institutional shareholders of…well, pretty much everything (think Apple, Microsoft, Amazon, etc.). Or SBUX, the coffee company with a high-quality global brand, more than 32,000 stores worldwide, and strong pricing power.
Plan Forward
As you are seeing reds in the market, it’s a good reminder that investing is not risk-free, and if there’s one thing that’s guaranteed in the market, it would be there will be green AND red days. This market will also test your conviction on whether you can endure the pain and hopefully come out on top, or whether you lose hope in the market because of the red days.
With that said, in my opinion, the risk in investing in the stock market goes down as valuations fall, and it provides one of the best buying opportunities! It’s a chance for us to buy more shares of high-quality companies, lower our cost basis, and increase our dividends on a sale! After all, it’s not often that you see the market tanking this hard!