January 2019 Update

By | February 3, 2019

January brought a few different things for me. A few purchases and one sale. I will go into this a little below why I sold. I don’t like to sell but I felt the possibility of a decrease was greater than that of the upside.

Share Purchases and Sales

Purchases

  • APN Property REIT (ASX:APN) +$63.05 a year in dividends
  • My State Bank (ASX:MYS) +$99.19 a year in dividends
  • Orora Lts (ASX:ORA) +$122.13 a year in dividends

Sales

  • WAM Research (ASX:WAX) -$143.26 a year in dividends

Total increase of $141.11 a year in dividends. This is from additional funds utilized in my portfolio.

There are a few reasons why I sold WAM Research. One was that last year they were paying a little out of savings which is typically a good thing (cash in bank). Although, in saying that, that means they didn’t cover dividend payment. The second part, and the scarier part, is that it is looking more and more likely that the Labor Government will hold power in the next election and if that does happen you can most likely say good bye to franking credits if they can get it passed through parliament. Our franking credits are basically tax paid by companies – therefore, you do not have to pay tax on dividends – as simple as I can explain it. There are a few factors, but it is looking like some LIC’s (Listed Investment Companies) will have to be converted into LIT’s (Listed Investment Trusts) and therefore pay out all of their income – similar to a REIT. This will cause the dividend smoothing to be non existent and payout will be erratic. On top of that it is trading at 25-30% premium to NTA. Change it to a LIT and say goodbye to that premium as well. Too much risk for very little reward. That’s why I changed.

Dividend Payments

January 2018 I received $37.86.
January 2019 I received $44.77 – all money reinvested (no tax paid on these figures).

That’s an increase of 18.25%, wow, let’s keep that going all year!
Total Forward Dividend Income for the year is now sitting at – $1049.44.

Net Worth January 2019

Net Worth in December 2018 was approximately $57,687.41.
Net Worth in January 2019 was approximately $62,052.85 which is an increase of approximately 7.57%.

Overall a fantastic month. Let’s hope the smaller month of February can provide some nice results too. Cheers!

16 thoughts on “January 2019 Update

  1. easypeasyfire

    Nice work! I am also of the opinion that Labor getting into government is scary for a purely dividend only approach and as such maintain my 100% VDHG allocation since it’s a mix of capital growth and dividends (given that it holds VAS in there).

    Great update!

    Reply
    1. Buy - Hold - Long Post author

      Thanks EPF. It doesn’t look like Labor will back down from this stance either. Hopefully it doesn’t get passed even if they hold parliament. Thanks.

      Reply
  2. Dividend--Portfolio

    Congrats on the double-digit increase from last year BHL and don’t worry about having to sell investments. The buy and hold strategy doesn’t mean you have to be blind to what’s going on in the market place or business world. It seems like your decisions are in align with your goals. Looking forward to following your progress in 2019.

    Reply
  3. DivRider

    Hi BHL,
    thanks for the update! Good to see your making big progress. Over 18% dividend increase YOY is remarkable! Also your net worth increase is nearly as much as February of last year (your biggest increase).

    Happy to follow you and read about your Australian Holdings as I’ve never heard about them.

    Cheers
    -DivRider

    Reply
  4. J.D

    Great update I am also keenly watching the franking credits issue.

    Looking forward to following your journey this year!

    Reply
  5. DivvyDad

    Nice update, and I think your rationale for the sale is quite solid. It is all about managing that risk, which is unique to all of us, and it sounds like you made the right decision. I’ve enjoyed learning about some of the intricacies to other markets, such as the franking and the discussion about the LIC vs. LIT here.

    Looks like you’ve made some great progress, keep it rolling!

    Reply
    1. Buy - Hold - Long Post author

      Thanks DivvyDad. It’s not quite set in stone just yet (election soon for us Aussies) but like I said in the post, I feel the risk of loss far outweighs any potential gains. Thanks for stopping by.

      Reply
    1. Buy - Hold - Long Post author

      It would be nice to stay as a LIC. It’s fairly “safe” to say Labor will win the next election but then they have to get the franking credits adjusted in parliament. While it will be quite tough to do that (liberal/murdoch media alliance) it is still a possibility. One that I won’t take the risk of. Cheers

      Reply
  6. EngineeringDividends

    Solid progress on the YoY dividends, BHL. However, that net worth gain in one month really caught my eye. I’m sure you’d be open to more of those kinds of monthly gains. 😀
    An occasional sale is part of the process when you are monitoring your portfolio for potential trouble. I can understand your reasoning.

    Reply
    1. Buy - Hold - Long Post author

      Thanks for the comment ED.
      YoY increases in dividend and also increase in net worth are great. I’d love to see that continuation of increases in my future and yours too. Cheers.

      Reply

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