Mid-year review 2019

Recap:

  • Deposited €7.500 versus a half year target of €7.200. On track!
  • Received €2.517 in dividends versus a half year target of €1.817. On track!
  • Extra repayment of mortage €2.600 above regular monthly terms.
  • Realized profit due to writing options of €433,45
  • Estimated dividend income 2019 at €4.300

Deposits:

My target monthly deposit I set at €1.200 this year. I didn’t really deviate from this plan so with with €7.500 transferred to my stock account I’m €300 above the mid-year target.

Dividend Income:

I received almost 40% more dividend than I expected. At the end of 2018 I calculated my expected dividend income based on my stock holdings at the end of the year.

At the end of 2018 / begin 2019 I did initiate a few short put positions and I used the received option premiums to invest in shares. As a result I have more money invested in stocks than I expected when calculating my expected dividend income.

As a result of the option premium invested in stocks my estimated dividend income this year is now €4.300 instead of the original target of €3.500.

Extra mortgage repayment:

In May I repayed €2.600 extra on my mortage. This is repayment above the regular monthly terms I pay.

I like seeing my mortgage debt going down faster than planned, but I don’t realize a big interest saving by this extra repayment.

Until 2026 the fixed interest rate on my mortgage is 1,99% so as a result of the extra repayment I save a whopping €51,74 in interest per year. As it’s in The Netherlands possible to deduct paid mortgage interest from the tax to be paid I’m actually only saving€25,87.

Nevertheless I like it to make the balance of this debt go down. Although interest rates are low now there’s always a risk that the next time the fixed interest is expiring that it’s at a time where rates are higher.

Option Income:

In the first 6 months of this year I realized profit of €433,45. I did write a decent amount of options end 2018 / begin 2019 with different expiration dates.

This is increasing the risk and volatility of the value of my portfolio, but it also gives the opportunity of extra income.

Fact Five:

  • Largest Position: Royal Dutch Shell (€5.408)
  • Biggest dividend payer: Royal Dutch Shell (€311)
  • Estimated dividend income 2019: €4.322
  • Biggest sector in my portfolio: REIT (18,3%)
  • 59 different companies in the portfolio

Targets 2nd half year:

  • 2 months only depositing and not buying shares, because I used a small credit to make some opportunistic purchases at market dips.
  • Focus on buying European stocks, because USA stocks are expensive at current valuation and USD/EUR exchange rate
  • Analyze my portfolio to check if the current sector allocation is balanced
  • Thoroughly keep track of the risk related to the short put positions and adjusting whenever necessary.

Final Thoughts:

I’m confident that I will reach the increased target of €4.300 in dividend income. I’m curious how the market will develop in the 2nd halve year. It now feels like the market is at a high valuation, but with trade war and interest developments can result in volatility.

In July many companies will publish their half year results. Based on the publication of half year results it’s also possible that stock will react strongly. At the current valuation lot’s of good news already seems to be included in the price.

Also it’s possible that the half year numbers will be good, but that prices will go down substantial if a company is publishing a conservative outlook. I already saw this happening with various companies publishing good results, but combined with a sober outlook.

It’s always interesting to see how stock markets are reacting on news, but as investor who holds stocks for the long term it’s normally not something what is bothering me.

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