5-Bullet Sunday

5-Bullet Sunday – #35

Summer has officially ended! 

Temperature went down to reasonable levels again. Rain showers and strong winds are happening and some trees started to drop their leaves.

I don’t mind it so much, because work is keeping me pretty busy. The summer was good, but also different. I’ll always cherish the special time I had with the family

This all didn’t prevent me from creating additional content for you. 

Firstly I published an article about Kiva and my experience as an interesting option to participate in charity. I’ve also launched a small “campaign” in which I will loan 1 Euro to a borrower on Kiva for every comment that you leave behind on this blog. Currently the counter is at 7 Euro.

Secondly we recorded and published episode #11 of Dividend Talk. Engineer My Freedom and I are sharing our top 5 Portfolio holdings and what this means to us.

Having said that and without further ado, enjoy the read 📖


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 earlier posts can be found here

🌟 Streetwise or Analytical?

I ran a poll this week on Twitter in which I asked my followers to chose one mindset as their preference.

Being Streetwise won by a small margin over Being Analytical. This is a bit of a surprise to me although it resonates a lot with me.

I consider myself pretty analytical and I only wish that I was more streetwise at times. It’s a development goal for me as an investor that I’ve been working on for several years already. I’m mostly inspired by Peter Lynch’s book “One up on Wall Street”.

I think I’m getting there, because since a year I’ve been more and more focused on companies that I understand and for which I can use some pretty common sense arguments when buying them.

In the past I would rely more on stock screeners and what the data tells me. Nowadays, I am much more looking into the story of the stock and the integrity of the board of directors. Does this define being streetwise? No, but its my way of trying to get closer to that mindset when having an overly analytical mindset 😉

Streetwise for me means being able to be successful in the stock market without taking all the complexity and dangers into consideration when investing in stocks. 

I remember an old colleague of mine who I believe is the example of being streetwise. He would come in the morning into the office and tell me about a certain stock which in his opinion was just too cheap to ignore. 

He would typically say: hey eDGI, buy Apple at 63. It’s down from 98 (back in 2013). Everyone in my neighborhood wants an iPhone and even their kids. They’re poor people, so if they want this stuff then Apple is there to stay. He was also smart enough to quickly check with someone like me if there was anything in the data that he should be aware of. 

I got worried about the “iPhone” sales stagnating when looking at the data and listening to the pundits. Hence, I didn’t touch the stock. He went on and bought Apple stock worth 10K arguing that the pundits are wrong, because everyone was talking about the next upcoming iPhone at his son’s birthday party.

He made a lot of money. I didn’t 😉

🌟 The Ads dilemma

I also ran another poll this week. I wanted to consult you regarding the best way of earning some income from this blog. Costs are rising as this blog grows and it’s slowly becoming an expensive hobby for me. 

I don’t mind that a hobby costs me money, but I also want you to have a quality and optimal experience while reading my content. Therefore I am using premium hosting, a premium template and so on.

Having said that, your biggest preference is to have ads on this blog followed by affiliate links when asked to make a choice 👇

Your wish is my command. 🤟

As you can see, I’ve activated some ads on my blog using Google Adsense. I will try it out for a month or two and then I will probably get back to you to ask you about your experience. 

Your experience is what matters most to me, so I just need to find the optimal balance between your experience and my blogging costs.

Personally I’m not too big of a fan of using advertisements as there is a lot of crap between it. Therefore I have also turned off all possible unethical advertisements like promoting drugs, sex, alcohol, games for kids, dating, get rich quick, aggressive loans, etc. Google offers you a list of 20+ such categories. I turned them all off. 

Let’s see. I might consider affiliate links as well in the future, but for now I’m good with testing advertisements. 

The issue that I have with affiliate links is the risk of losing my own opinion regarding a product. Take as an example Trading212 as a stockbroker. 

It’s currently very popular in the investment community, but honestly, there isn’t much that appeals me to it compared to a broker like deGiro. And also deGiro is far from perfect! 

Many bloggers are recommending Trading212 without having hardly experience with the platform. What I do know is that those bloggers are benefiting from the attractive affiliate income. 

There is just one exception that I know of and that’s Tony | One Million Journey. He’s been using it for quite some time and I also know that I can trust Tony. 

Having said that, if you find the ads too annoying then please let me know.

🌟 Printing Money like there’s no tomorrow

Federal Reserve chairman Jerome Powell gave his long awaited speech this week. The core of the message was simple: the FED has been struggling to achieve supporting the 2% inflation target, hence they’re going to loosen up a bit.

This means that the FED will allow inflation to be above 2% for some time to compensate for periods which had lower inflation growth.

This tells me that the FED is already justifying more money printing and for a longer period of time. Hence, even if we get the pandemic behind us, expect a longer period of zero-interest.

What does this mean for us as investors? 

We are effectively getting a free pass.

If the past taught us anything, then governments will be tightening budgets, lowering social security and benefits. Participants in the stock market will see their wealth increase (rapidly)!

I believe this is not sustainable and I’m on the side with Ray Dalio here who argues that we’re at the end of a long debt cycle. I also expect the ever-increasing social unrest and populism to continue due to a growing wealth gap.

Having said that, for now I’ll stay heavily invested in the stock market and I believe that dividend stocks are a great place to be in as it does give us that return on investment in cash  💪.

🌟 Recommended Reads

Last Friday night I had a rant about United Airlines in our Dividend Talk podcast. This rant was partially inspired by an article from Ben Hunt (<- perfect last name for such article) about a letter that the CEO sent to his employees. I guess this short article was just adding oil to the fires inside of me. The transfer of wealth is absurd right now.

Dividend Growth Investor wrote a very interesting article about Anne Scheiber, an “ordinary woman” who made 22 Million by dividend investing. DGI did a great job in analyzing her success and he shares some great learnings with us. I would definitely recommend to check out his article. I don’t think compounding will still get me to 22 Million, but that’s rather related to my own expectation for how much time I have still left on this planet 😜

Early Retirement Now wrote a great article about the state of the economy and what possible scenario’s this pandemic might lead us in to. He is pretty optimistic and he bases his opinion a lot on factual data, something that I really appreciate. I tend to agree with him, although I really need to wait and see first about what’s going to happen in the fall.

🌟 Recommended Video

The approach to how we develop drugs and the value of clinical trials is something that we as society have developed at least over a century

There’s a reason for that, because many people have died over the past due to poorly designed drugs. 

If you don’t believe me, then please read the book the Emperor of all maladies. Siddhartha Mukherjee explains the history in a very detailed and “entertaining” manner.

This is also the reason why I want to share the below video with you. This is Matt Herper speaking who understands this very well, not pundits and neither politicians. It’s important to understand what he’s saying if you want to make intelligent investment decisions based on the pandemic theme.


That was it for 5-Bullet Sunday, edition #35

Please don’t forget to rate this post below 👇

Have a lovely week ahead!

Yours Truly,

European Dividend Growth Investor


Before you go!

You can contribute to charity without spending money.

I personally commit to spend 1 Euro on Kiva for every legit comment that I’m receiving on this blog until the end of this year up-to a maximum of 500 Euro 💪.

This is how you can help a person in need and at the same time help me increase the engagement on this blog.

Thank you for your support 🙏

Disclaimer

I’m not a certified financial planner/advisor nor a certified financial analyst nor an economist nor a CPA nor an accountant nor a lawyer. I’m not a finance professional through formal education. I’m a person who believes and takes pride in a sense of freedom, satisfaction, fulfillment and empowerment that I get from being financially competent and being conscious managing my personal money. The contents on this blog are for informational and entertainment purposes only and does not constitute financial, accounting, or legal advice. I can’t promise that the information shared on my blog is appropriate for you or anyone else. By reading this blog, you agree to hold me harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information provided on this blog.

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Gabe
Gabe
2 months ago

Hey DGI, good article.
Would love to get your thoughts on this…Are you still in accumulation mode following the FED’s announcement or are you holding until the U.S election is decided?
Thanks.

Andrea Kirkby
Andrea Kirkby
2 months ago

Right, please put another euro into Kiva for me!

I’ve been using it for a few years. I particularly like the fact I can support women in non-traditional roles such as women in construction or electrical contracting, and in agriculture. I also find the web site very well thought through and easy to use.

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