Bringing back my portfolio updates for all of you and kicking it off with my January 2021 Portfolio Update! While 2020 was a crazy year, Laura and I kicked butt and were very fortunate to invest in companies that generated some pretty good returns.
I had written some about the companies I was investing in back in 2020, but if you missed any of them and are curious about what I invest in, keep reading!
A quick note before jumping into my portfolio update is that working and hustling to make money is only the equation’s first part. The second part is putting the money you earned to work for you! Make money while you sleep!
Below is a summary of my non-retirement & non-healthcare investments.
Brokerage account – 93% weight
APPLE – 29.7% return
Apple (APPL) is a cash cow and tech powerhouse. It has profited from the work from home environment, and most analysts think it will continue to grow! While Apple does have some regulatory concerns from Anti-Trust congressional hearings in 2020, the more significant fear is Biden’s tax proposal more than regulation for its app store. While I do not think it will significantly impact performance, it will lower some earnings, which could be a risk at current valuations.
Some might say Apple is overvalued, but it’s performing well, and in the long term, it is an outstanding stock.
Federal Agricultural Mortgage Corporation – 13.7% return
This would be a newer stock to my portfolio. AGM is an excellent company that provides loans to the farm sector with all of its loans guaranteed. The company was founded in 1987 and had an excellent track record.
This stock isn’t a bank but trades like one. It has a 4% yield and is currently undervalued still!
Ally Financial Inc – 183.3% return
Ally Financial (ALLY) has been an outstanding stock and is a stable company. Being an online bank that invests in tech, it has grown well in the past few years and currently has a dividend yield of 1.9%. 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 I love Ally, it is currently priced too high for me to invest more into it other than my dividends on DRIP.
Bank of America Corp – 27.5% return
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 2.27% dividend and probably a 15-20% upside.
I will note that I used to be invested in WFC, and I did make a small profit, but WFC is still restricted by the Fed in its size, significantly limiting its growth. All at the same time, it is fighting off a bad reputation of scandals that it just can’t forget. Finally, the company is also trying desperately to reduce costs but is doing so at a pace slower than Wall Street wants. While I believe money can be made in WFC, I am happy with the financial stocks I have and will not add WFC unless it gets cheap.
Broadmark Realty Capital Inc – 4.9% Return
I first discovered BRMK while creating my Ultimate Monthly Dividend List. The company is a business development corporation that provides loans to businesses. I was impressed at the incredible growth of this company from 2014 to 2020. In those six years, it had grown ten times in size.
The best part of the company’s growth? It has no debt on the books making this company a lower risk investment that pays a hefty dividend each month. I have it on DRIP buying additional shares every month, which helps it compound.
SalesForce – 1.6% return
CRM is a cloud computing solution company that focuses on customer relationship management. If your company has a sales team, they most likely use this fantastic software. Their software’s data and simplicity have produced some insane growth, and I decided to initiate a position late last year to get more tech & growth exposure in my portfolio.
CVS Health Corporation – 17.9% return
CVS is a great company that is working to diversify its business. A lot of the dislike for this stock is the debt from mergers and acquisitions and the fact that Amazon has entered the pharmacy market. CVS is working on expanding its insurance offering, and more in-person health care will be enough to weather the Amazon storm, in my opinion. This is a good healthcare play for your portfolio. Additionally, CVS should profit from the vaccine distribution in 2021.
Digital Realty Trust – 7.9% return
I love REITs for their payouts, but I also like ones that play to the market’s advantages. DLR is not your average REIT as you will not find houses or office buildings in its portfolio. DLR focuses on data center platforms! This is a REIT but also a tech play as big data is big MONEY! They operate 284 facilities in 23 countries, which provides excellent diversification of clients!
Fidelity National Financial Group – 15.9% return
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, which should be complementary to its core business. There are similarities between the companies that could result in cost savings and FNF profits during low-interest-rate environments, whereas F&G profits more in higher interest rate environments.
FNF boasts a 3.6% dividend yield and is still undervalued on the way back up to pre COVID highs.
Ford Motor Co. – 130.4% return
Ford (F) has taken some moves of replacing its CEO and 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 will be the future of the business.
Johnson & Johnson – 13.3% return
What to say about JNJ? They are a super consumer, Pharmaceutical, and medical devices company that controls a large market share! They have a wide mote due to their size and market share. While this company is not a vast growth company, it’s a strong performer with a 2.5% dividend.
JPMorgan Chase & Co – 39.12% return
JPM is one of the best banks to own. They have multiple revenue streams and have some of the best leadership in the industry. Recently, their CEO commented that they should be scared of the FinTech companies (like square & paypal), which will be the top priority for JPM to compete with them!
NetSTREIT Corp – 2.1% return
NTST is a new net-lease REIT that you could compare with WPC or O. They are an excellent company with outstanding leadership. I started to write up an article about it but have not completed it. You can expect to see more about this REIT as it is a good one.
PepsiCo Inc – 7.0%
PEP is a great company that also helps diversify some from banks & REITs. The snack and soda company has a significant market position and sales. It also delivers a 3% dividend to enjoy while you hold this stock.
Philip Morris International Inc – 17.2% return
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.
While PM has a lot of debt, the management team makes the right moves by paying down debt and focusing on a smoke-free future. I think the future is bright for this smoker of a company!
Prudential Financial Inc – 28.1% return
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, PRU has been doing well and focuses on cost-saving/efficiencies.
You should also know about annuity companies 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 – (17.63)% return
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 in RKT without researching it and just based my investment on all the hype….horrible way to support! 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 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.
So Rocket is a fantastic company, but it faces some headwinds as the refinance market cools off. The main focus will be to gain market share, but overall this company will struggle until the market shifts again—still a great company long term. I have been selling covered calls every month for this, making between $50-100. So I am ok at the moment, and if it rallies, my option may sell my position.
WP Carey Inc – (1.14)%
WPC is a much less popular net less REIT than Realty Income. The main reason is probably that WPC pays its dividend quarterly vs. Realty Income monthly. Also, I think it is the top net lease REIT; if you dive deeper, you will learn it is better positioned and a stronger company than Realty.
I started a fairly good size position, and while I am only up a little over 1%, I have no regrets!
ETFs to Help Balance out Risk – .32%
Even though this is not my retirement money, I still like to have some more conservative positions, so I have bought an ETF. I have held Vanguard Total International Bond Index Fund ETF Shares (BNDX) for about a year, and both yields over 3% and have profitable growth. I personally like Vanguard funds as they usually have some of the lowest expenses you will find.
Ally Managed Investment Portfolio – 2% weight
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 37% since, according to Ally. By my calculations, it is more of a 7% return. My concern was the heavyweight of cash, which is supposed to provide more stability but could weigh on performance. I believe Ally doesn’t include the cash position in its returns; thus, their numbers do not reflect the lagging return. Overall I am happy with the account.
Alternative Investments – 4% weight
Fundrise – 6.8% return
My account is invested in 88 projects and returned 6.1% last year, which isn’t bad but is much lower than the projected numbers I saw at signup. My all-time return comes in at 6.8%, with limited liquidity. I have stopped investing in this and decided to let what is currently invested to see how it does.
GroundFloor – 13.0% return
I started investing in GroundFloor to try it out, and I have expanded based on a small sample. Currently, I am invested in 33 loans with one requested extension. The portfolio of loans ranges between 6-12 months at a rate of 10.6%.
Before these 33 loans, I had eight, which all have been repaid and provided a yield of 13.0%. I was delighted with the result. I think that groundfloor has risk, but it reduces your overall risk by spreading out your investment to many loans. As such, I am actively investing.