Portfolio Update May 2021 and Updated My Investment Goals

 Will start this post with a small update to my goals. The long-term goals are a portfolio value of 100 000€ and annual dividends of 4 000€ (equivalent to a dividend yield of 4%) by 2031 and short-term goals are a portfolio value of 55 000€ and annual dividends of 2 200€ (also 4% dividend yield) by 2025. I want to have some goals further into the future and have therefore set a third goal;

Portfolio value of 1 000 000€ and annual dividend of 55 000€ by the end of year 2061. This means I have about 40 years to invest and grow the portfolio from current value of 52 180€, a growth and investments equivalent to 947 820 euros. This will be a more challenging task and will require patience and consistency to achieve.

All goals available on Goals page as well as the updated goal of 1 million investment portfolio.

Back to my portfolio and the update, May was a little busy month with a lot of work and some good investment opportunities for me. Also got proper dividends of which all has been reinvested and additional investments to be done during Summer. Below is shown the portfolio development to long-term target (not the new 1 million euro target), for simplicity the data labels have been removed and you also have access to the google sheets file via portfolio page. Portfolio return is largely driven by the general upside in markets and less on company specific development. Portfolio value was 52 180€ or $56 695,95, which represents a 14,50% return.

 

 

One topic to be touched is AT&Ts decision to split WarnerMedia as a separate company which will be merged with Discovery. As a result, AT&Ts shareholders will own 71% and Discovery shareholders will have 21% own the new joint company consisting of WarnerMedia and Discovery. One of the reasons is direct consumer streaming for global customers, meaning they want to create scale and better compete with Netflix and Amazon Prime. I haven't had time to look at all the details in the transaction, therefore a bit difficult to comment if it is a good or a bad deal for me as an AT&T shareholder. What I can say is that I like the telecom industry and also like the entertainment industry as the revenue channels have increases over the years from only movies to today's merchandise, royalties streams from multiple parties.

Portfolio changes

Increased a few positions during May which will contribute with some additional dividend this year. Unfortunately, the dividend year has basically ended for European stock which pay only once a year a dividend. Rest of the year it will mainly be USA based companies and GlaxoSmithKline (primary listing is in UK).

AT&T (ticker: T)

Bought 3 shares at $29,50 to reduce the weighted average purchase price from $31,14 to $31,10. Some might have sold out due to the divestment news as they see the dividend to be cut to half of what it is right now and as a result based on today's price the dividend yield of 7,11% (Google Finance) would be 3,555%. The challenge here is what will the joint company WarnerMedia and Discovery pay in dividends, or will it pay a dividend? Many shareholders have held AT&T mainly for its high dividend if you are to believe other bloggers and writers in the social media. My view of AT&T is more a stable dividend payer who makes a lot of visible mistakes, acquisitions not in shareholders interest like the DirectTV while TimeWarner was in my opinion a very smart and good investment with good cash flow. 

Now I am also faced with the same dilemma, sell out or what to do? Based on all current information I will hold my position and even increase it, unfortunately I do not have an answer if anything changes then it will impact my judgment of the company.

Alibaba (ticker: BABA)

Bought 5 shares for an average of $222,93 per share which lowered the weighted average purchase price from $227 to $225,40.

I do find Alibaba a good long-term investment which might grow in Asia and even to Western countries if they so want, challenging Amazon in many of its business categories.

Dividends 

It did feel good to get some bigger dividends in to invest more in the markets, even thought a lot of assets seem highly valued on many metrics. The portfolio received 491,34€ in gross dividends and 374,13€ net of withholding taxes. Will have to apply for the withholding from Germany during this year and hopfully claim old taxes from two years back as well. As the picture below shows most of the dividends came from Basf, Fortum and Sampo. These three companies pay only a annual dividend so until next year.

The graph above displays year to date dividends both cumulative as per month split. There are clearly monthly differences driven by European companies and US companies quarterly dividends. 

In market value my portfolio is close to the short-term goal yet dividens are far away from the goal of 2 200€. Five months behind and seven to go, lets see how this year ends.