Portfolio Update (September 2015)

Third month into the start of my new portfolio and I have added four more companies into my portfolio. From October onwards, I will start the consolidating phase, adding more shares to the six companies and reviewing the portfolio for changes to the companies that I will want to invest in.

Third month since I started on my new portfolio and after reviewing of my investment plans, I had made investments and added four more companies into the portfolio.

The third company that I had added into my portfolio was Automatic Data Processing, Inc. (NYSE: ADP). Bought 6 shares of ADP at $77.1975 each. The additions to the portfolio was followed by 4 shares of Clorox Co (NYSE: CLX) at $111.70, 5 shares of PepsiCo, Inc. (NYSE: PEP) at $92.35 and 11 shares of Abbott Laboratories (NYSE: ABT) at $43.78.

After buying all the shares that I had planned for this year, marking the end of the portfolio’s building phase. From October onwards, I will be moving into the consolidation phase where I will start buying more shares once a year and will be expecting to collect dividends once a month (surprising the dividend distributions are spaced out quite evenly). The dividends collected will be reinvested to buy more shares using DRIP.

Stock Holdings

Stock holdings as of September 30, 2015. Cost basis is the total invested amount, including dividends that were reinvested and the commissions and taxes paid. This cost will be used in the percentage calculations for YTD dividends, and profit and loss.

Stock Symbol Shares Cost Basis
Home Depot, Inc. HD 4.01400 $480.55
Johnson & Johnson JNJ 5.02812 $509.59
Automatic Data Processing, Inc. ADP 6.00000 $473.18
Clorox Co CLX 4.00000 $456.79
PepsiCo, Inc. PEP 5.00000 $471.74
Abbott Laboratories ABT 11.00000 $491.57
Total Investment Amount $2,883.42

Dividends

Johnson & Johnson (NYSE: JNJ) paid a total of $3.75 of dividends, before tax, on September 09. The dividend has been converted to 0.02812 worth of shares at $93.1624 each via DRIP.

Home Depot, Inc. (NYSE: HD) has also paid a total of $2.36 of dividends, before tax, on September 17. The dividend has been converted to 0.01400 worth of shares at $118.1616 each via DRIP.

ADP began trading ex-dividend on September 09, 2015, with cash dividend of $0.49 per share to be paid on October 01, 2015.

Stock Symbol YTD Dividends
Home Depot, Inc. HD $2.36 0.50%
Johnson & Johnson JNJ $3.75 0.76%
Automatic Data Processing, Inc. ADP $0.00 0.00%
Clorox Co CLX $0.00 0.00%
PepsiCo, Inc. PEP $0.00 0.00%
Abbott Laboratories ABT $0.00 0.00%
Total Dividends $6.11 0.21%

Profit & Loss

The month of September was with a lot of uncertainties. There were a lot of anticipations that the Fed will be raising their interest rates but when the announcement that the interest rates were not to raise this month, signalling that the global economy is still dangerously weak. That drove the stock prices to fall sharply.

Stock Symbol Profit/Loss
Home Depot, Inc. HD $16.23 3.39%
Johnson & Johnson JNJ $39.08 7.69%
Automatic Data Processing, Inc. ADP $8.98 1.90%
Clorox Co CLX $5.33 1.17%
PepsiCo, Inc. PEP $0.24 0.05%
Abbott Laboratories ABT $49.15 10.00%
Total Profit/Loss $90.43 3.14%

Investment is Like Wine

Investments are just like wine. The longer it age, the better the investment will be. However, there are chances that investments may turn bad during aging and investors will risk to lose everything.

Wine improves with age, the older it gets, the better it taste.

How many of you agrees with that?

Personally, I do not know how to appreciate wine but I do hear of this quote very much often from people who knows how to appreciate wine.

A quick search on the internet revealed that as wine age, tannins that come from the grape stems, seeds, and skins will react with the wine’s alcohols and esters to gradually change the taste of the wine. Together with the oxygen that leak in through the cap also help to define the characteristics of the wine.

However, if oxygen is added into the equation at too quickly, it will overwhelm the tannins and start oxidizing the other molecules, causing the wine to turn bad.

How is Investment Similar to Wine

Dividends are like the tannins in wine. As time passes, if the dividends are reinvested, they will add more shares to your portfolio and eventually change the flavor to your investments making them better and better. If investments are held over long period, you will eventually be able to enjoy the sweetness of your investments.

Similarly to wine, investments may turn bad as well. The company that you invest in may have too much bad finances that overwhelm the business returns. This is when we, as investors, have to make the decision to change the investment or risk losing all the investments.

The Bottom Line

What is important is in an investment, the longer the age of the investment will bring more flavor to our investments but equally important is, during the period of investment, the investment has to be constantly monitored so that we can save our investments when it is turning bad or lose everything when it has turned bad.