Extra mortgage repayment of €5000

For me it’s common to make an extra mortgage repayment on a yearly basis above the monthly payments which are standard. I always do this in May, because in May I normally get my tax return deposited from the Belastingdienst (Dutch tax agency). Also it’s common in The Netherlands for companies to pay out a holiday allowance of 8% of the yearly salary to their staff in May.

My tax return is mainly based on the balance between the tax I pay over my assets (savings, share portfolio, bonds, etc) and the tax return I get on mortgage paid. In the Dutch tax system paid mortgage interest can be deducted from paid income tax. Basically it means I get approximately 50% of my paid mortage interest back from the government.

A few years ago this always resulted in a few thousand euro’s tax refund, but as a result of my interest percentage decreasing from 4,8% to 1,99% at the end of the fixed interest period I not pay that much interest anymore and the tax return is relatively small compared to a few years ago. In the past I got almost €3.000 as tax return, but this year due to the low interest I pay in combination with tax I have to pay over my assets (vermogensbelasting) I get back €1.000.

The holiday allowance which the company pays out in May to me is approximately €3.000.

The tax return and holidayallowance plus a bit of my savings I use to repay €5.000 extra on my mortgage. This will result in a yearly saving of €360 on future mortgage payments.

250 shares of Enbridge Energy Partners LP sold… already

On 14 May I bought 250 shares of Enbridge Energy Partners, but only 3 days later I already sold them again.

Enbridge did announce the plan to offer 0,3083 Enbridge shares for 1 unit of Enbridge Energy Partners. This means a premium of zero %. Maybe in the future based on the percentage of unit holders which will vote against he merger there will be a little premium offered. I decided to sell the units and not wait for the closing of the deal. Without the high distributions I did expect to earn the fiscal paperwork is not worth it for me to wait for the chance on an improved merger proposal.

I bought the units at $9,78 and sold them at a price of $10,15. A 3,8% profit.

+4,6 Final Dividend Increase National Grid

During the 2017/2018 full year results publication National Grid announced a 4,6% increase of their final dividend over the bookyear 2017/2018. The final dividend will increaes from 29,1 pence to 30,44 pence.

I own 100 shares National Grid so this final dividend increase will result in 134 pence extra dividend. In euro’s this is €1,53.

Purchase 250 shares Enbridge Energy Partners

This week I bought 250 shares Enbridge Energy Partners at a price of $9,78. The current distribution of Enbridge Energy Partners is $0,35 per quarter. With this purchase I add $350 to my yearly estimated dividend income, but because I’m not exactly 100% sure about the withholding rate and/or if the tax threaty rate with NL is used I deduct the MLP withholding tax rate of 39,6% for now and book in an estimated dividend income of $211,40.

Enbridge Energy Partners is an MLP, a limited partnership that is publicly traded. An MLP combines the tax benefits of a limited partnership with the liquidity of publicly traded securities. To obtain the tax benefits of a pass through, MLPs must generate at least 90% or more of their income from qualifying sources such as from production, processing, storage, and transportation of depletable natural resources and minerals. In addition, real property rents also qualify.

An MLP is not paying federal tax, but as unitholder, Dutch/foreign unitholder, I now expect to fill out some beautiful papers called 1040NR / Schedule K1. Also I have to apply for an Individual Taxpayer Identification Number (ITIN). Reading up about this tax paperwork was challenging, because I really had a hard time finding information usefull for me as Dutch citizen.

This is my first and for now last purchase of an MLP. I will first check next year how things go regarding the tax return and based on my experience with filing for tax return I will decide if it’s worth adding more MLP units to my portfolio in the future or if the paperwork is just not worth it and it’s better to close this position.

Purchase 17 shares Coca-Cola

Yesterday I for the 3rd time bought shares Coca Cola. This time I bought the shares against price per share of $42,20. I now own 39 shares Coca-Cola with an average purchase price of $44,37. With this purchase I add $26,52 to my yearly estimated dividend income.

While writing this post I realized that previous time I bought more Coca-Cola shares at the end of January, I bought them at price just 20 cents below the 52 weeks high, actually even a 5 year high. Now I add the shares close to the 52 weeks low of Coca-Cola which is a much better moment to add shares.

I now bought shares Coca Cola 3 times:

1st purchase: 15 shares @ $44,95
2nd purchase: 7 shares @ $48,41
3rd purchase: 17 shares @ $42,20

The current yield on cost based on the weighted average purchase price is 3,52%.

Rebalancing my portfolio by selling a few small positions

Today I sold:

10 shares Macquarie Group LTD @ AUD 111,60
45 shares Ryanair @ €15,49
3 shares Stamps.com @ $248,05
3 shares Berkshire Hathaway @ $200,14

Basically these are 4 small positions in my portfolio. Nowadays I consider positions below €1.000 small. These small positions are a leftover from the year I started with investing in stocks on a monthly level. At this time I had the tendency to buy 2 or 3 different stocks a month to be able to diversify my portfolio.

The 4 stocks listed above are not in the first third of my watching list. So I don’t expect to increase the size of the positions in this year. Also I have problems keeping informed about Macquarie Group, because Australia is far away and I rarely have articles or reports to read about Macquarie Group.

Although I’m pleased with the peformance and dividend of Macquarie Group I still decided to sell this position, because I consider it important to have articles and analysis availble so I have other sources than the presenations published by this bank itself.

As a result of my experience with Macquarie Group I added a rule to my personal investing guidelines to also ask myself the question if enough publications from others sources than the company website are available so I keep myself challenged in making an assessment if I can find enough articles about a share I’m considering buying.

As a result of closing these small positions I will be making another stock purchase later this month.

Purchase 30 shares Dominion Energy

This week I bought 30 shares Dominion Energy at a price of $65,19 per share. Dominion Energy is currently paying $3,34 in dividends per year. The yield on cost of the Dominion Energy purchase is currently 5,1%.

My yearly estimated dividend income will increase with $100,2 or €83,50 against the current USD/EUR exchange rate.

Dominion Energy is currently 23% below the 52 weeks high reached in December 2017. The share price of Dominion Energy did start to go down since an all stock merger with Scana Energy was announced. Scana shareholders will receive 0.6690 shares of Dominion Energy common stock for each Scana share.

Scana is in financial problems due to a failed project regarding the development of a nuclear power station. Dominion Energy share price is probably under pressure due to investors expecting a high risk on claims for Scana, but it seems that Dominion Energy has itself shielded against liabilities regarding this project due to setting as requirement for the merger that the transaction is contingent upon South Carolina approval of proposed nuclear solution

I considered buying Scana shares to take advantage of the discount compared the merger offer, but at the moment I consider this not in line with my risk profile, because if the merger fails it brings a high risk of banktruptcy for Scana.