August 2020 Portfolio Update

You will see in my August 2020 Portfolio Update that I have been adding to my portfolio since my last update. I think it is essential for investors to check up on companies as long as you don’t let emotions drive decisions. Checking your portfolio once a month isn’t a bad thing.

August 2020 Portfolio Update

I hope you enjoy my August 2020 Portfolio update! Side note everything mentioned below is just my brokerage account. For fun, I will make notes about what other investments I have but not go into great detail unless you have questions.

Brokerage Accounts

APPLE

A recent addition to my portfolio is Apple (APPL), which I purchased to give my portfolio some tech and growth stock exposure. I bought it right after my post on if Apple is a buy before the stock split. As you will discover, Apple is a fantastic company that generates a ridiculous amount of cash. It is a true cash cow! While Apple does have some regulatory concerns from the recent Anti-Trust congressional hearings, the more significant fear is Biden’s tax proposal more than regulation for its app store.

Some might say Apple is overvalued, but it’s performing well, and in the long term, it is a great stock. While I was super late to the party, I am still up ~12.5% with Apple.

Ally Financial Inc

Ally Financial (ALLY) has been a great stock and is a stable company. Being an online bank that invests in tech, it has been able to grow well in the past few years and yields a great dividend of 3.5%. The downside of Ally is that it is heavily invested in the auto sector, which was the cause of the big dip this year. Ally is still probably 20% undervalued at this time.

While Banks are not exciting investments, I am up 55% right now and enjoying the dividends! This is an underrated bank to invest in!

Bank of America Corp

Bank of America Corp (BAC) is another solid bank stock that I decided to dive into and do some quick research on it. My research was really for Wells Fargo, but I had noticed it was undervalued. It currently has a 2.8% dividend and probably a 15-20% upside.

BAC was a recent purchase and, as such, is only up 1.74%. Overall I am comfortable holding this and reinvesting the dividends to prepare for the growth once the rates rise in a few years.

CVS Health Corporation

CVS is also a recent purchase that had an impressive Q2 2020 earnings. As I highlighted in my review, CVS is making real progress in diversifying its business from just being a pharmacy. The numbers look great, and the company is paying down debt instead of raising its dividend. The company will be in a great position in the next year or two to raise its dividend.

The bad news, CVS is a great company, but the market just hates CVS stock. With all the significant progress, the market is saying that its diversification progress isn’t fast enough, and Amazon will kill it. This just isn’t true, and CVS will continue to dominate the pharmacy market and diversify its business. Since investing, I have seen a .5% return. I will probably not expand my position except through reinvesting dividends. This will be a slow-growth company, but I will continue to collect a 3% dividend.

Fidelity National Financial Group

FNF is a dominant player in the title insurance field that is seeing record levels of transactions. The company is similar to Apple in the sense that it generates tons of cash. Recently it purchased a life insurance and annuity company, F&G, that should be complementary to its core business. There are similarities between the companies that could result in cost savings as well as FNF profits during low-interest-rate environments, whereas F&G profits more in higher interest rate environments.

FNF boasts a 4% dividend yield, and I am bullish that the stock will recover as it is still more than 25% down from its pre-COVID highs. I am currently down about .5%.

Ford Motor Co.

Ford (F) has taken some moves of replacing its CEO as well as suspending its dividend to conserve cash. The company also recently launched the new Ford Bronco, which saw substantial reservation numbers. The new 2021 Ford F150 has also received excellent feedback. The F150 was launched with a hybrid option and generator to appeal to contractors.

The real growth that Ford is banking on is the launch of its electric fleet, which is going to be the future of the business. Since my purchase, I have seen my Ford shares rise 40%, and I am still optimistic about its future as when I bought it.

Philip Morris International Inc

Philip Morris (PM) is not a usual stock choice for me, but this company is a dividend machine. Before investing, I posted an article looking to answer the question if Philip Morris Stock will recover from its recent lows.

Currently, PM is paying almost a 6% dividend, and my shares are now up 15% so far. While PM has a lot of debt, the management team is making the right moves by paying down debt and focusing on a smoke-free future.

Prudential Financial Inc

Prudential Financial (PRU) is over 100 years old insurance and retirement management company that isn’t about to go out of business anytime soon. While insurance companies are struggling with low-interest rates, especially the more aged business on their books is, PRU has been doing well and is focusing on cost-saving/efficiencies.

Another thing that you should know about annuity companies is that most have surrender charges and market value adjustments (MVA) built in to deter withdraws. During the COVID-19 crisis, the number of policyholders choosing to withdraw money has risen, and this has caused some issues since most companies base their MVA on the treasury rate, which is almost zero.

PRU has a dividend-yielding 6.3% and has some growth but will probably stay stable till interest rates rise.

Rocket Companies

Where to start with Rocket Companies (RKT)? Well, this investment is probably an example of don’t let your emotions get ahead of yourself and stick to an investment plan. We all make mistakes, though!

So I invested into RKT without researching it and just based my investment off all the hype….horrible way to invest! My position in RKT is down 13%. Since this was only a speculation purchase it isn’t hurting my overall portfolio that bad. Further, I did do some Research and Analysis of Rocket Companies IPO and happily discovered that it is a great company that will be a good investment in the long term, most likely.

Side note The Analysis of Rocket Companies was done since I couldn’t find any research and turned out to be the best post I have ever done in terms of people viewing! Almost 500 people read it in the past week!

Wells Fargo & Co

At this point, you may have caught on that I like financial companies, especially during the low-interest-rate environment, as they are “cheap” and pay dividends. Wells Fargo (WFC) has had a horrible few years with trust and regulatory issues, but the company finally seems to be getting its act together under new leadership.

If this company can clean up all the issues and get the Fed to approve it to grow, this stock will jump! The Fed will not lift its restrictions anytime soon, but between that and interest rates that will eventually go up, this stock has an excellent opportunity to grow a fair amount.

Wells Fargo

Even with the dividend cut, it still has a 1.6% yield, which is not horrible, and right now, I have not lost or gained anything for WFC. Overall this is a speculative investment to a point, but I do believe it has great potential if you’re willing to wait a year or two.

With all that said, I have no intention to pour any more money into WFC but happy to leave what is there and wait for a payday in the future.

ETFs to Help Balance out Risk

Even though this is not my retirement money, I still like to have some more conservative positions, and that is why I have bought two bond ETFs. I recently purchased Vanguard Total International Bond Index Fund ETF Shares (BNDX) & Vanguard Long-Term Corporate Bond Index Fund ETF Shares (VCLT), which both yield over 3% and have good growth. I personally like Vanguard funds as they usually have some of the lowest expenses you will find.

Ally Managed Investment Portfolio

I am invested in Ally’s Core Aggressive Growth managed portfolio which is basically a 40% split of US equity ETFs + 26% International stock ETFs + 3% US Bond ETFs + 1% International bond ETFs + 30% cash growing at 1%.

I started this account in March, and it has a net return of 21.61% since. My concern was the heavyweight of cash, which is supposed to provide more stability but could weigh on performance. So far, it has not, and I am happy with the account.

HSA

I need to write a post about how Health Savings Accounts(HSA) are probably the most powerful retirement account that you can have. Anyways I currently have my investments split between Vanguard Equity Income & Vanguard Extended Market Index. These have done well for me and are up about 8% so far.

Retirement

To avoid having to go into a ton a detail, I will just list all the different investments as I believe picking your funds is better than picking a target fund as the expenses are higher. Ok below are my Retirement investments, if you have questions leave a comment below:

IRA

  • American Water Works (AWK)
  • Fidelity 500 Index Fund (FXAIX)
  • Realty Income Corp (O)
  • Pimco Dynamic Income (PDI)
  • iSHARES TR PFD and INCM (PFF)
  • Philip Morris International (PM)

401k

Alternate Investments

Fundrise

My account is currently invested in 66 projects that roll up into ten positions. Only two of my positions are operating at the moment, but it is yielding 3.5% YTD. Overall, about a year in, I have seen a 7.2% return, which isn’t too bad. The biggest downside for Fundrise is lack of liquidity. The upside is strong returns and dividends. As long as you can put the money away long term, this could be a good investment for you too.

GroundFloor

This almost doesn’t count as an investment as it is such a small amount of money, but I wanted to see how it would perform. I have invested in 18 loans, and of them, three have repaid their loan with interest. It is projected that my return will be 11.3% on the outstanding loans, and I had a yield of 12.4% on the three loans that were repaid. Overall this seems to be ok, but I am sure I will get a loan default at some point. I also like the short term nature of these loans being 6-9 months.

Conclusion

I highly recommend building out an HSA as well as your retirement investments, but I am focusing on my brokerage as my retirement is basically on autopilot. My goal is to build passive income from my brokerage account!

Hopefully, my August 2020 Portfolio Update provides some insight and ideas for your portfolio. If you need tips on How to Build Wealth, I wrote a whole page on some small changes to help you with your goals. As well as if you have comments or ideas for me, please feel free to share your thoughts below!

A final side note the only position I sold completely was RCL which I decided it was a little too risky right now. I was able to get over 100% return this year.

This post is my opinion, which is strictly for information & educational purposes only. The post is not intended to provide any investment advice. Please seek your own duly licensed professional for investment advice as they will be able to consider your situation. Please read my Terms & Conditions Page for a full disclaimer.

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