January has ended and that means already my 5th 5-bullet sunday 🎉. I must confess, I enjoy writing these posts a lot, because it allows me to reflect a bit on how things are going. I believe such reflection is a good habit and it encourages learning. Isn’t that a key ingredient to building wealth?
Enjoy the 5 bullets from this week!
#pandemic #dividendhikes #theSnowballContinues #moneyshame #irrationalExuberance
5-Bullet Sunday is a weekly blog post with 5 topics that were on my mind this week related to Financial Independence and Dividend Growth Investing or something that just fed my curiosity. An overview of other earlier posts can be found here
🌟 Fear is entering the market
I fully understand that the horror stories about a pandemic are scary, but it does make me wonder how people are living their lives. More people die every year in for instance Poland due to traffic jams or the regular flu. I also believe that if “shit really hits the fan” that there’s not so much that we can do.
In such times I will probably be more afraid about violence and riots than the flu itself. If you are still wondering what to do during a pandemic, then I recommend you to read this article #StayOutOfAtlanta and in general following the doctor’s advice.
In any case, I’m very glad that the stock market is cooling of a bit and I’m really looking forward to use this opportunity and bring some cash into the market to buy some future cash flow.
🌟 Dividend hikes European Dividend Champions
Personally I found them very disappointing so far. My goal is to invest in dividend growing stocks that grow their dividends with a yearly average of 6% and a a starting yield of at least 3%.
If I would have invested in all the stocks that I mentioned in my blogpost, evenly distributed, then the average increase was 4.74% on an average yield of 2.94%.
🌟 Recent Purchase
Royal Dutch Shell NV reported some weak earnings this week. The oil & gas sector seems to have taken a hit lately and many Oil stocks have seen steep declines.
I know the industry a bit and also the company itself and many people are not fully realizing that Shell’s main business is Liquefied Natural Gas nowadays. This is part of a strategy to benefit from the global energy transition into cleaner resources.
At the same time they are quite a bit investing in new energy sources (i.e. wind) which could eventually lead to becoming more of a utility rather than an Oil&Gas play.
For me that’s a very smart strategy and something that I fully believe in. The world currently needs oil, but at the same time is eagerly looking for mitigating climate change.
I think Shell has the best cards in hands from the big oil majors. Therefore I have increased my position last Friday when the stock dipped under 24 Euros. I intend to add more when the stock dips another 10%.
🌟 Money Shame
I have some friends that are really living from paycheck to paycheck. Not out of choice, but due to their skillset and other reasons.
These thoughts also made me realize again what I want to do once I’m financially independent: give back to society.
I would really love for instance help children from families in need to become more computer literate in our environment. I believe that it would open up many future job opportunities and for them a ticket out of poverty.
🌟 Irrational exuberance
Tesla ($TSLA) tripled its share price since October! Let that sink in please for a moment.
I am a dividend growth investor, but I must confess that I am sometimes looking at such stocks and thinking by myself: shouldn’t I be better off being a growth investor?
Honestly, I would probably be a poor growth investor, because I would simply not know how to assess the value of a stock like Tesla.
As a DGI there are a lot of metrics that we can follow, i.e. P/E, P/CF, Dividend Yield, Divididend Growth %, ROE. This makes it quantifiable.
Growth stocks however require for me more of a “fingerspitzengefühl“. I feel that I don’t have that.
In the end it is about what works for me, right?
This was it for the week. I hope that you enjoyed this week’s 5-Bullet Sunday.
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For now, have a great Sunday!