May 2020 Portfolio Review

I am a long term investor, and all the positions I mention in this post are my non-retirement holdings. I have found some success but also have a few that did not work out as well as I had hoped. The reason I am checking up on these investments is that some of them are risky and should be monitored.

I don’t believe in chasing winners but rather searching for companies that provide excellent value to risk opportunities. So without further chit chat from me, let’s dive into my May 2020 Portfolio review. As a bonus, I will add some stocks I plan to research further and maybe buy. 

Fundrise

I have an auto investment setup on Fundrise as I am treating this a little bit like an experiment to see how the investments perform. So far, I am yielding a 4.03% dividend, and in the past year, I am up 2.3%. While these returns are quite low, I have not lost money and have received stable dividends.  Fundrise is about 18% of my non-retirement portfolio.

may 2020 portfolio review

Fundrise has historical returns closer to 10%, which has not been my experience so far, but the issue I believe is that Fundrise is a long term investment. I have not been invested long enough to get the returns. Fundrise plans on five years as the term of the investment, and currently, I only have two of my property funds in operating status, which is about 22% of my portfolio. I have another 10% stabilizing, and then the rest is ramping up. Above, you can see the status of my funds, and below are the historical returns for Fundrise.

If you want to learn more about Fundrise and the different statuses of funds, read my review.  Another thing I recommend reading is Fundrise’s strategy for this economic downturn, which is a good read; you can find the strategy here.

Ally Bank

So this is a recent purchase which I bought in two increments. I have an average price of $14.15, which at Friday’s close price represents a 12.27% return. It also boasts a dividend-yielding 4.82%. Ally (ALLY) is around 14% of my non-retirement portfolio. 

While that sounds great, Ally is heavily exposed to the auto industry and will be a risky investment until the auto industry stabilizes. The management team is reliable and has been proactive in managing this risk, but they can only do so much depending on how long the COVID-19 situation continues. 

I don’t think bankruptcy is likely, but they might cut their dividend if the auto industry doesn’t rebound, and that would probably drop the price in the 10-12 price range. 

The long term once we put this behind us, this stock should be in the mid-30s, but is trading low due to risk! I am happy with this investment.

Ford

This is another risky investment, but I decided to give it a shot at just under $5. Ford (F) has suspended its dividend to conserve money, which is a smart move. I am up around 14% right now on this investment. It also represents about 7% of my non-retirement portfolio. 

Wow, there is a ton to say here. Let’s start with COVID-19 had completely shut down manufacturing of Ford, and it only just started back up. Even with modified working environments, Ford plants have had two workers test positive for COVID-19. 

The bad news continues to come with Hertz going into bankruptcy as that adds some risk that they will flood the used car market, which will affect prices. Another thing is that Ford has been working on turning around the company with a new strategy for the past few years and then COVID-19 hit. Nothing like raising the difficulty factor in an already challenging task. 

The positive and why I am optimistic about Ford. While it does have its issues, it has an excellent electric series of cars rolling out very soon.  Three vehicles will be plug-in hybrids, and then in Spring 2021, the Mach-E will be available, which is a pure electric vehicle with performance to compete with Tesla(TSLA). 

The most crucial electric vehicle is the F-150. A full-size truck that runs on nothing but electric that can tow and haul is going to be a huge seller! It is expected early 2021 as well, which could help Ford grow and rebound in 2021. 

Again will note that if COVID-19 continues to drag on and the auto market suffers, Ford stock could drop lower.

Prudential Financial Inc

So working in the insurance and retirement industry myself, this investment was a fun one for me. While it has not performed well since I bought it at $63.50 a share, it is still an excellent long term position. That is about an 11% decline, excluding dividends. I am sitting on an almost 7% dividend. PRU also only represents 7% of my non-retirement portfolio. 

Prudential is a stable financial company, and the short term pain right now is the investment losses they are taking as an insurer. They are in a spread business, and the market conditions have been challenging and caused them to lose some money. 

Also, Insurance companies are very dependent on the interest rates, and with them so low, it will be challenging to make money. Once it appears interest rates will begin to rise is a great time to buy insurance companies. 

I will continue to hold PRU and may buy some more if it drops more. But I would add that I am not in a rush as interest rates will keep the earnings down for the next year or two. 

Royal Caribbean Cruises

When will people start cruising again? That is the question that will determine if I make or lose money. I bought RCL at $26.88 and feel very comfortable with my position. At today’s price of $43, I am not sure I would be interested in buying yet, as any news of vaccine delays or no cruising in 2020 will push the price back down. 

The positives are meager oil prices combined with a record number of people cruising in the last few years. Bookings are also up as people want to go somewhere after being stuck at home. Many of the Caribbean cruises, which are RCL’s bread and butter, don’t even require many passengers to fly.

The bad and ugly. RCL is sitting on a vast fleet that is entirely idle. As a result, that is translating to about $300 million a month in cash burn. If the crisis goes longer than expected, the company will be under a lot of pressure but is financially stable.

The gamble here is if cruising starts, this could be a big moneymaker, but if its fleet is still idle in 2021 well, it will be a massive disappointment of an investment. I am happy and comfortable with my investment.

American Water Works Co

I have been invested in this utility company (AWK) for a while, and my average cost is $72.75. They pay a 3% dividend, and I am currently up about 66%. Of the companies I have talked about in my portfolio, this is probably the least risky investment I have. No concerns here. 

PDI

I will admit that I did not research this fund much at all and had bought it just for the yield, which is a horrible way to invest. In some regards, I will probably hold the fund only to remind me about what not to do. I bought into PDI as it has an 8% yield, but the fund has dropped 29% since I bought it. 

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At this point, I am down and not going to sell as I will just continue to hold and invest the dividend elsewhere. 

PFF

This is the same situation as PDI. When you make one dumb move, what makes it better is do it again. While PFF is only down 11%, which is far better than the 29% of PDI, it also has a smaller yield of 5.2%. I will continue to hold as it is a tiny percent of my portfolio (3%) and will reinvest the dividend back into the fund and see what happens. 

Ally Invest Managed Portfolio

I started my account in March 2020, and so far, I have a 10.45% rate of return. Not too bad. The way it works is your portfolio has a mix of stock and bond ETFs combined with some money in cash. The cash amount gets the same rate as the savings account, which is currently 1.25%.

It’s easy to diversify your investment with this portfolio and get a decent return. I actually would recommend this if you want to invest but not have to do any work.

Ideas to Research

  • Biotech companies working on COVID-19 vaccine
    • BioNTech and Pfizer (PFE)
    • Inovio Pharmaceuticals (INO)
    • Moderna (MRNA)
    • Novavax (NVAX)
    • Regeneron Pharmaceuticals
  • UTG – Reaves Utility Income Fund
  • UHS – Universal Health Services, Inc.
  • VTR – Ventas, Inc.
  • WELL – Welltower Inc.
  • SCI – Service Corporation International
  • ACN – Accenture plc
  • MAIN – Main Street Capital
  • O – Realty Income Corporation

Conclusion

Considering the S&P500 is down 8% YTD, I am quite happy sitting on an 18% return. Kind of wish my 401k had an 18% return as it is currently down 3%, but researching and building some wealth outside of my retirement account is going well.

I might mess around with forex trading too just to learn some about it as the more you learn, the less risk you have. I am messing around with an account for fun.

I will put a disclaimer out that I am also looking for a new job, so some of my blogging time is now dedicated to resume and cover letter writing. Apologies for any delay in responding, but I am actively researching stocks still, so hit me with your questions.

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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