I know it’s been awhile since I have posted about my stocks and ETF investments, to put it bluntly, I have been quiet.
One of the reasons is that I have been trying to get a feel of the market. And as of right now, I know things are not looking good.
First, let’s discuss what changes I made in the second half of 2021.
I decided to do some severe trimming.
After contemplating my previous strategy towards dividend investing, I decided to go with a balance of growth and dividend investing. While I contemplated going all VTI, BND and VXUS only. Which many smart investors are doing great of focusing on those three.
Personally, I’m not interested in that just yet. I do like VTI, I had BND but not interested in investing in bonds and for international exposure, while I could focus on VXUS, I already have FZILX.
I decided to do the following. Please note, I am not a financial advisor, I would not follow this, as I often change my mind and it can change a few months from now.
I. ROTH IRA – I did focus primarily on VTI for this account. I also focused on AbbVie, one financial – Prudential and the BDC, ARCC. This strategy actually did well and grew past my usual yearly investment quite a bit in 2021.
For 2022…I decided I wanted to change things a bit.
I wanted to have a balance of growth and also a balance of dividend investing. But in 2022, I really missed my REITS. I pretty much eliminated 98% of my REITS and saw my monthly dividends dwindle. And while I tried to tell myself, it was for the good. I didn’t feel right.
In 2021, VTI would be 80%, ARCC, AbbVie and Prudential were the 20%.
For me, I want the comfort of knowing I’m still getting dividends and I’m also a REIT investor, so I have short positions with CLPR, VICI, OHI, MPW, TWO and one utility company, SO which I ended in one taxable account and added to this.
Again these are short positions which I wanted to keep. I actually contemplated going with Blackstone (BX) only for REIT but I rather have short positions that provide me with dividends that will grow in DRIP) in this account.
There is one more, and that is Alphabet (Googl) for growth and a tech company. Just a short position, as I already have VTI as the primary investment.
As much as I enjoy REITS, I enjoy technology and while I had a short position in QQQ, I sold those and put it towards Alphabet, before the stock split. Google is so expensive right now but I’ve owned NVidia, Apple, Microsoft but I like what I see with Google. This is more of an experiment, because I want to see if after the split, how those shares will grow and exceeds the original investment. I did a similar test with NVidia after their split, and I made a profit. So, we’ll see.
II. INVESTMENT FUND ACCOUNT (MUTUAL FUNDS) – I tend to max my Roth IRA first and that leaves me with months to fund this account. I already invested in my Fidelity Zero Percent Index Funds, which I have discussed and this is my taxable account that I can keep adding after I maxed out my ROTH IRA. If I had to do this again, I would have put these in my ROTH IRA and VTI in a taxable account.
While I have made money on this account and have blogged about my Fidelity Zero Percent Index Funds, only one has proven to do well and that is FNILX over FZROX. The International Index is my money loser at this time.
III. TAXABLE ACCOUNT I (COVERED CALLS) – I decided that I wanted to not close this taxable account, because it’s mostly QYLD and RYLD that I heavily invested in 2021.
These are covered call ETFs, taxes wise, if you sell, you are going to pay the amount of the entire ETF. Unlike stocks where you can sell for a capital gain or take the capital loss, covered call ETF’s are best if you just invest and leave it alone. It grows because I have it on DRIP and it adds to my dividends. If you are a dividend investor, this may be attractive for investors, there is either love or hate towards covered call ETF’s. For me, I look at it as a dividend producer that I invested in heavily in 2021 and it has been growing on its own. It may not grow and it may lose money but that’s you’re not going into this ETF for growth, you’re in it purely for the dividend and the DRIP that will continue on for the rest of your life. If it’s a short position, then if you want to leave, then leave. But if you invested quite a bit, just let it grow while you focus on your ROTH IRA.
I also use this taxable margin account for one thing, when I see a drip on a stock that will produce, then I strike and when it’s high, I’ll sell it. Ie. GME in early 2021. Granted, I had to pay the taxes on income received but that was a rare situation.
IV. TAXABLE ACCOUNT II (DIVIDEND) – This is a taxable account that I created because it gave you two free stocks if you invest $100. I’ve only invested $100 into it and I sold the two stocks that came with it that were worth hardly anything and so far it’s done OK. Although, one of the free stocks it came with, I wish I held longer and sold when it went up past 10x its costs because it did well for a short while…and that was AMC. Nevertheless, I invested in a cheap mREIT that pays dividends monthly and instead of closing it, I just let it go and let it continue to produce dividends. I don’t intend to invest anything more than the original $100 to this account, but it will be interesting to see how many shares it will produce overtime.
V. TAXABLE ACCOUNT III – This account is primarily Berkshire Hathaway and Realty Income. An account that is funded when I maxed my ROTH IRA.
But that’s my investments. I also have other investments, but this is purely stocks and ETFs and again, please don’t follow what I am doing. I’m not a financial advisor and this is my decision alone and it can changed next month, a few months from now, etc.
