My Portfolio Review September 2020

It’s been a while since I shared a review of my portfolio with you. So I decided it’s time for my portfolio review for september 2020. Let’s get into it

Positions

Apple (AAPL) – 21.99%

Qualcomm (QCOM) – 14.05%

Cisco (CSCO) – 9.34%

Abbvie (ABBV) – 7.42%

Unilever (UN) – 6.23%

Vanguard Emerging Markets ETF (VFEM) – 6.06%

Lockheed Martin (LMT) – 5.96%

Mcdonald’s (MCD) – 5.70%

Barrick Gold (GOLD) – 5.28%

AT&T (T) – 5.15%

Pfizer (PFE) – 4.90%

BP (BP) – 3.87%

New Positions

It’s been a couple of months since I last shared my portfolio with you, but to be fair there hasn’t been that much new positions since then. For one I have been quite busy and didn’t have that much time to be involved in the stock market. And second the market has been going up pretty much every month since then, so there haven’t been that much opportunities for me to open new positions. Still, there are two new ones over that period.

Barrick Gold (GOLD)

I picked up a position in Barrick a couple of months ago and the reasoning is quite straightforward. I had a position in a physical gold ETF and I just moved it over to Barrick. Why you might ask? Well, for one main reason. I am a dividend investor and I don’t really like having positions that don’t provide cashflow. Barrick Gold gives me the chance to still have some exposure to the precious metal, while providing me with some dividend income as well.

Lockheed Martin (LMT)

I started a position in Lockheed recently with plans to eventually increase it over time. There are a couple of reasons behind it. First one is they are a very solid company, leaders in their field with a good, consistent cashflow and good perspectives in front of them.

Also I didn’t have any exposure to defense stocks and I decided it will be a good time to start a position there. In my opinion their valuation at the moment is decent with a P/E ratio of around 17 and a decent dividend of 2.5% with a payout ratio of around 40%. They also provide a good revenue growth and have a backlog of over $140bn – reference.

Overall a solid, well-managed company with good potential for revenue growth and a decent dividend with potential for growth. Now, let’s get to my closed positions.

Closed Positions

iShares Physical Gold ETF (SGLN)

This one is pretty straightforward – I moved my position from the ETF to Barrick because of the chance to earn an extra quarterly dividend. And as I said, I generally don’t really like holding positions that doesn’t provide any cashflow. Not saying there is anything wrong with holding gold in one form or another, just my personal strategy is more suited to dividend income.

Activision Blizzard (ATVI)

I closed my position in Blizzard a couple of months ago because of pretty much one reason. Just for a couple of months the stock has gone up substantially and I took the profits to reinvest them in other stocks. I still like the company, but I just didn’t really like the valuation compared to the prospects of the company. Also the dividend is quite low, so I prefer to invest that in companies with a bit more of dividend income potential.

I will probably pick up a position once again in the coming future, but at the moment I prefer to invest in other kinds of stocks. I still very much like the company, but for me this was kind of a luxury position if you will. And at the moment I just prefer to build out my core part of the portfolio and then focus on more of a secondary picks with high growth and low dividend. Given the recent run-up, I found it a good opportunity to get the profit and reinvest it in another positions.

Shell (RDS.B)

At one point I found myself with too much of exposure to energy companies with both a position in BP and Shell. So I decided to simplify my portfolio and keep only one of them and invest half of the other into it. So after a lot of concideration I decided to stick with BP. In all honesty the decision was quite hard as I like both companies and their overall strategy is fairly close.

I don’t think keeping either one of them is a mistake, but I liked BP a bit more because of their exposure to Rosneft and overall a bit more conservative approach, at least in my opinion. Again, both companies have their pros and cons and for me are well positioned, I just prefer BP at this moment.

Overview Of The Market

It’s been a while since I made one of those reviews, so I will include and a bit of an overview of the last couple of months. Well, first the Nasdaq has been up over 36% since my last review and over 75% since the bottom in March. Similarly, the S&P 500 is up over 20% and over 50% since the March bottom. The FTSE 250 has been doing a bit worse with about 6% up since the last review and about 35% since the bottom.

This is for one main reason – the big tech stocks in the US have been going up and rates that I have personally never seen before. For example Apple has more than doubled since the recent lows, similar with Amazon, Microsoft, Netflix and the likes, all of which are up at least 50%. And Tesla is up almost 500% in the recent couple of months.

Obviously low interest rates, people staying in home, easier access to the market and a lot of cheap money flowing around have provided a big boost to stock prices, especially in the tech stocks. I have no idea how will that end up, but it makes it really hard for me to pick up stocks at decent valuations. I picked up Mcdonald’s in March and it is up almost 50% since then.

On one hand this is great, since I see big returns in some of my positions. But on the other it makes those companies unnatractive to invest in, at least for me. Which brings me to my next point.

Plans For The Month

As I said, we have seen a big run-up in the stock market in the last couple of months. So my strategy for now is to wait and see and maybe pick up some small positions here and there. One good thing so far is that my dividend income has been steady during 2020, with only BP having their dividend reduced, which for me was the right move.

So my plan is to reinvest my dividends, try and increase my dividend income and wait and see if we get more attractive valuations at some point.

Also I have an internship coming up and not going to lie, I am quite anxious about it. As some of you know, I am a chef, so my internship is going to be in the hospitality sector, most probably in London. The pandemic has made everything incredibly unceirtain and going to London in the coming months makes me quite weary. I have no idea if we are going to see a second lockdown and frankly, probably no one really knows.

I already went there in March just to have my internship cancelled within a couple of weeks. So I ended up spending a lot on tickets, deposits and all that just to stay there for a couple of weeks. But I guess I can only take things as I go and will plan my move accordingly.

The pandemic has thrown a massive wrench in my future plans, but I hope we can see the end of it sometimes soon. I am someone who loves travelling and had plans to live in a couple of different counries in the next couple of years, but everything is on hold at the moment.

Conclusion

So overall my portfolio has been doing well, my dividend income has been steadily increasing, but my personal and professional life have been nowhere near that great, as I assume is the case for many people around the world at the moment.

All I can do is wish you all the best, hope we can go back to a normal life soon, stay safe and if you have any question or you are seeking any advice, don’t hesitate to contact me.

Full Disclosure : I am/ we are long AAPL, UN, T, PFE, ABBV, VFEM, MCD, CSCO, QCOM, BP, GOLD, LMT

Additional Disclosure : This article is meant to identify an idea for further research and analysis and should not be taken as a recommendation to invest. It does not provide individualised advice or recommendations for any specific reader. Also note that I may not cover all relevant risks related to the ideas presented in the article.

Readers should conduct their own due diligence and carefully consider their own investing objectives, risk tolerance, time horizon, tax situation, liquidity needs and concentration levels. I am not a financial advisor and this article is for educational and personal accountability reasons only.