Dividend Results

Another quarter passed and what a ride it was once again. Russian special operation – Njet problem, normal katastrof – in Ukraine kicked in and outcome was probably something most didn’t expect. Ukraine has put on a brave fight and now this one month old war (well, in reality it began years ago with the annexation of Crimea) is turning into a real shit show for Russians. Economic sanctions on Russia are something that I for one didn’t expect international community ever to pull off. Russia is like zombie with the exception of zombie having fair chance of eating before rotting away. This all hit some companies really hard but overall markets way less than I would have guessed. On personal level impact could be described as minor mainly due to having very limited Russian exposure and elevated US exposure. It’s hard to estimate how this thing will play out. Hopefully international community will not scale down the sanctions until Russia truly learns the provided free lesson. Furthermore this will hopefully result Finland joining NATO. This is something that should have been done in the 1990’s but better late than never. This would be extremely important also to mitigate country risk associated in being small open economy next door to Russia.

Main portfolio gained about 7% during the quarter. Dividend income was 1623,60 USD dollars and 120 EUR before taxes or 1566,42 EUR when using the exchange rate at the time of writing. Quite solid improvement compared to 1190,15 EUR year ago.

What next? Overall bounce back from the Russian special financial operation was maybe too quick. Inflation fears are still there and underlying problems in global economy are probable just one month older and equally bigger. Most likely I will just continue with current approach: do mainly smaller purchases and re-invest dividends. Let cash position grow a bit even though it’s quite significant already and not really ideal considering the inflation environment. Then again my personal finances are less severely hit by inflation as my consumption level is in general low and key factors like energy are either low or something that I can almost eliminate if and when needed. Let’s see. I might initiate a new position on Gilead Sciences and possibly add on existing 3M and Kemira positions while waiting for better opportunities to make bigger moves.

Another boring quarter has passed and much like previous ones, this one quite passive as well. Only minor maintenance purchases were made in Kemira Oyj and one slightly bigger one with an entry into AbbVie Inc. Decent turnaround in portfolio continued and settled into sideways movement towards the end. Dividend income before taxes was 1436.08 EUR during the quarter.

Another positive development was ECB’s approval for Nordea to pay dividends that were on hold for quite a long time. Sampo as my largest position will receive quite a respectable amount of these while it is still working on the sale of whole Nordea position. Both are also planning on purchasing their own shares. Expectation is that Sampo will distribute extra dividend in addition to those purchases. Expectations for Q4/2021 and H1/2022 are quite positive in this sense. Otherwise I’m still in waiting pattern and plan to make only moderate purchases until there’s a significant correction taking place. Increased exposure for pharmaceuticals, defence, water and chemicals are likely targets of those purchases.

Groundhog day – Pandemic Edition continues. Yet another boring quarter has passed and handling of the pandemic is still as poor as it has been throughout the pandemic. Speaking of Finland in many ways EU of course. As expected, US appears to bounce back like a dead cat from trampoline which makes us look even worse than usual.

This quarter was quite slow one. I made only few maintenance purchases and sold some of my NEL shares. This was mainly caused by the market situation but also by personal reasons as running & resolving my late father’s estate and associated inheritance details took quite a lot of time. This will have significant impact on second quarter as well. Timing with NEL was spot on but I’ve been holding back on buying back the shares. In general I’ve kind of moved towards reducing portfolio risk which might continue going forward. This should leave the door open for significant moves in my personal finances later. I’ll likely do just minor maintenance purchases and possibly sell some growth or non-core positions.

Dividend income during the quarter was 1284,37 EUR before taxes. Dividends have recovered quite nicely from the hit caused by pandemic. Quite a few REIT are still to restore the dividends and ECB is pushing back bank dividends but these will hopefully resolve themselves before the year ends.

Everything comes to an end eventually. Probably 2020 will not be missed by many. Pandemic is still ongoing concern even though vaccinations are in progress. Even in developed countries the progress seems to be a bit asymmetric and EU in general seems to be lagging behind a bit. US elections were held and results can be considered final even though some aftershocks are still coming. Brexit was also “finalised” but it seems to be a gift that keeps on giving for years to come. In general pandemic together with brexit revealed something fundamental about EU community. As a result of those events I’m slightly more convinced that EU and Euro as currency will start to break down sooner than later. I don’t anticipate it to happen very quickly but quicker than I thought before. This kind of uncontrolled step towards federalization without a real mandate – and for fundamentally incompatible national economies – will eventually bite us in the ass. I’m guesstimating a timeframe of 8-15 years until this really starts to hit us.

Fourth quarter was somewhat expected kind of quarter. Dividend income compared to previous year was impacted negatively by the pandemic and reduced, eliminated or postponed dividends. Fourth quarter dividend income was 1078,82 EUR before taxes compared to 1 343,74 EUR in 2019. ECB also continued the dividend ban for banks and other financial companies so previously postponed dividends were not paid during this quarter. It is possible that some of those will be paid during 2021 but it’s likely that those and additional since then cumulated profits – buffered dividends if you will – will be heavily capped by ECB. I fear that this ECB decision will be as effective as pissing in your pants in freezing temperatures. FY2020 dividends before taxes were 5040,06 EUR compared to 6769 EUR in FY2019. Primary portfolio market value was hit very hard during the pandemic due to heavy REIT allocation for which recovery is still in progress: 12 month change in dividend portfolio value was −16,43%, fourth quarter change was +6,08% but this paper loss was partially compensated by the secondary growth portfolio.

FY2020 was still a success in personal finances. I tracked my overall savings rate for the whole year and managed to save 73,7% off all my income. That’s a figure which would be hard to beat consistently. I also end the year with portfolio debt to equity ratio of 0,004 which significantly below the 0,1 target average. Plenty of liquidity available for 2021 but in current environment it’s difficult to make any moves. Plan is to keep adding consistently with focus at least on healthcare sector and Swedish dividend stocks. It’s likely that I’ll let cash to to build up a bit but let’s see how the first quarter unfolds.

Not that much has changed compared to previous quarter. Global economy is mainly dominated by still ongoing COVID-19 pandemic and BLM protests in US as they prepare for presidential elections. There were ups and there were down during the quarter. Index level recovery has been surprisingly quick one. Personally my portfolio is still down mainly due to the heavy REIT allocation. Lately I’ve been holding back a little bit as the elections are likely to provide some turbulence together with second – and third – corona wave.

Dividend income before taxes during Q3 was 871,88 EUR (Q3/2019 1 206,75 EUR). Corona is clearly showing but not too badly. Impact was way clearer during last quarter as the Euro dividends have been cut or postponed especially in financial sector.

First quarter of the year is over and what a ride it was. First the markets were hitting all time hight valuations and then corona virus hit the global stock markets like a black swan on steroids. In retrospect quick adaptation by selling everything would have  been the sensible choice but that doesn’t really fit into the DGI influenced strategy. Real impact on dividends will remain to be seen. Short term there will be a significant hit but there are also long term possibilities. Some of the strong companies should probably eliminate the whole dividend and invest the money wisely. Prime candidate for this would be Sampo Plc which could increase the stake on TopDanmark. For the main portfolio this quarter was quite bad with -37% drop in value. Impact on dividends is not visible on metrics until next quarter. Dividend income during Q1 was 1 302,58 USD and 101,40 EUR before taxes.

Overall this drop was not totally unexpected though it should be noted that exact timing and reason was unexpected to me. In retrospect it should have been quite obvious if one would have paid enough attention on the news coming in from China during January and February. Long term strategy has not been changed. I was always planning on buying at least for one turn of the economic cycle. Therefore I’ve naturally now moved back to normal buying mode. I’m quite well positioned for it unless of course if this economic turn hits my personal finances. Even that should be quite easily digestible event as I’ve prepared for the turn for quite some time now. This was mainly done by reducing the debt load to minimum. It’s quite easy to take this kind of hits without mortgage. This drop also opens the possibility to make some tax efficient moves by e.g. moving certain assets between providers.

Third quarter is over and this time around it was a bit special one. I decided to restructure my overall finances and paid off my mortgage. This operation involved some stock sales as well since the main motivation was to trim things into a more defensive position (keeping the investment debt carried in portfolio in low end of the allowed range). In global economy main risks are still in place as I expected. Recession risk is real but then again political decisions can easily cause big shifts in a way or another. I might increase cash position in fourth quarter but that remains to be seen. I’m also considering splitting the main portfolio between Nordnet and Nordea. This could be achieved by making additional purchases in portfolio hosted in Nordea.

Third quarter was quite solid considering all the global challenges. Dividend income was 1 337,50 USD and main portfolio value increased 5,45% during the quarter.