5-Bullet Sunday

5 Bullet Sunday #49

What a week it was! Unilever NV became Unilever PLC and I got a lot of notifications of upcoming dividend distributions in December 💰

At the same time I realized that the last month of the year has started and I can’t believe that we’re almost there already. It actually also means that this blog exists for about a year now and I think that we should celebrate it. I don’t know exactly how yet, but I’m open for ideas 👍

Having said that, let’s get back to business, because I created the following content for you this week:

Without further ado, enjoy today’s 5-Bullet Sunday 🍵


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

🌟 November US Bankruptcy Filings Hit 14-year Low

Epic Global reported that November Bankruptcy filings hit a 14-year low in November. Is this the reason why the stock market is at all-time highs right now?

Source: Yahoo Finance

I find the below quote particularly interesting as an explanation for this low number:

“These historic low bankruptcy filings reflect the overall uncertainty about our economic recovery. Bankruptcy is a legal tool to restructure but in this unknown financial environment the benefit from seeking bankruptcy protection is unclear for individuals, families, and even large companies,” said Deirdre O’Connor, managing director of corporate restructuring at Epiq. “Assuming that we are only experiencing the ‘middle’ of the impact of this pandemic, we are in the calm before the storm.”

This makes sense to me. Many business owners in the US are probably thinking about what to do now that a vaccine has been announced. Just sitting it out for another few months might just allow them to survive?

🌟 My plan for charity in the spirit of Christmas

As you know, I’m a big fan of Kiva as part of my charity efforts as it really fits to me as an investor. I also started to reflect this week about what more I can do without necessarily giving away money (sorry, I’m not a big fan of that).

Looking at the impact of Covid-19 there are some clear examples of discrimination in the market place when thinking about large enterprise vs small businesses.

As an example, corporates have much more easier access to cheap debt compared to a small business owner which allows many of them to weather the current down turn. Large corporates like Boeing are also subject to being bailed out, whether or not they got into this mess due to their own miss-management. Too big to fail you could say.

This is the reason why we decided at home to try to buy as much as possible our goods at local businesses during the month of December. As an example, we will try to avoid large supermarket-chains and rather purchase something at the local grocery shop, butcher and farmers market. The same will apply when buying clothes, shoes and other kind of goods.

Why Buy Local? | Sustainable Connections

We will also actively promote this to our friends and family to inspire them to do the same. This is how I hope we can act as multipliers during this month.

I know that this is not a big thing to do it as individual, but maybe as a community it can make some impact?

🌟 Chart of the Week

I found the below chart published by visual capitalist very interesting:

Visual Capitalist: Historical returns by asset class

I realize that the chart doesn’t call out “growth tech stocks” as a particular asset class, because that’s what probably many people consider as the winning equities in 2020.

But what I find particularly interesting is the fact that both Gold and Bonds would’ve done better until 31 October than having been invested in the stock market.

I’ve noticed it single-handedly, because my stock portfolio is quite diversified. I own positions in most of the sectors, but I was probably a bit overweight in Oil & Gas stocks at the beginning of the year. This has kept my portfolio in red for the most of the year and it also resulted in a reduction of dividend income due to Shell’s dividend cut.

I know this is a lot about the price action, which in the end actually doesn’t matter to me all that much. My Projected Annual Dividend Income (PADI) has been smoothly going up due to new portfolio contributions and dividend hikes from most of the companies in my portfolio.

This is what dividend growth investing is about and soon I will able to close-out the books for this year and share with you my 2020 results.

Stay tuned for that. I aim to share it with you in the first week of January.

PS: Beurswolf: kudos to you! You were heavily invested in Gold this year which has given you some nice portfolio returns.

🌟 Recommended Reads

The holidays are coming up and this is the typical time that many of us do some deeper reflections on how we’re doing and whether we should adjust our investment strategies. So let’s get inspired so that we’re well equipped for the upcoming holiday break ✍

My buddy Engineer My Freedom was on a roll this week by publishing three new articles. The one that stood out was his take on whether Dividend Growth Investing is actually worth it. It’s off course a hypothetical question for him, but I really like how he explained the benefits of this investment strategy. Needless to say, but it resonates a lot with me 😉

Retire before Dad wrote an interesting article about how much money is enough. I especially like how he’s reflected on his “own enough”. I must say, this is sometimes not an easy question to answer for me, but this is where my allocation strategy really safeguards me from my own impulses.

Last but not least, I’m going to recommend one of my older articles: 5 impactful ways to increase your savings. I think that this is also the ultimate time to reflect on your spending habits and to analyze whether there are opportunities to increase your income. I’m sharing some pragmatic considerations in the post which might inspire you to maximize your savings. In return, those savings can speed up your path towards reaching your financial goals quite significantly.

🌟 Recommended Video

Let’s not get scared by the pundits. Their predictions are wrong 99% of the times, but I do keep listening to them to understand their hypotheses. I’m also not an idiot and I do realize that we are going through extraordinary times with zero-interest, FED’s buying corporate bonds, lockdowns due to covid-19 and at the same time the stock market is at all-time-highs.

Having said that: take these videos as learning material and don’t ignore the bear cases for why a stock market might crash. There could be a bear behind every tree and I found this video quite informative.


That’s it for the week. I hope that you enjoyed this week’s 5-Bullet Sunday 🙏

As always, have a lovely week ahead!

PS: don’t forget that every comment = 1 Euro to Kiva.

Yours Truly,

European Dividend Growth Investor


Access my Dividend Growth Portfolio by joining hundreds of others and never miss an article.

PS: I hate spam just as much as you do.
You will receive only blog updates and you can unsubscribe whenever you want.

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.

5 2 votes
Article Rating

It's my desire to retire early via Dividend Growth Investing as a passive income stream. This is not easy and especially when living in Europe. That's why I started this blog and share my journey: to give you a European perspective.

Subscribe
Notify of
guest
4 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Tito
Tito
5 months ago

Good coments, regards from Spain

Daniel Mazzini
Daniel Mazzini
5 months ago

Hi EDGI,

I read your content, I like it and I wanted to start by thanking you for everything you share. And I wanted to make a comment. More than once I have read that you have “hurt” that Shell cut the dividend and that you lowered it from category A to C. Didn’t you think about selling covered call? Think about it, if the stock does not reach the strike price, the premium would be like a dividend, and if the price exceeds it, it does not matter because your idea was to sell them.

Thanks, again

4
0
Would love your thoughts, please comment.x
()
x
%d bloggers like this: