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The market was relatively flat this week, heading into the FOMC meeting on the 20th. The S&P 500 appreciated by 0.09%, while the Nasdaq declined by -0.54%. CPI data ticked higher as the print for February was 3.2%, which was 0.1% higher than the consensus estimates and where CPI was in January. Consumer Sentiment declined for the 2nd consecutive month in March as it came in under the consensus estimates. The CME Group is projecting that there is a 98% chance the Fed will keep rates where they are, and it will be interesting to see what Fed Chair Powell says at the press conference and, even more importantly, what his tone is. I am expecting that an unexpected rate decrease is off the table, and he will phrase the message as the FOMC members are getting closer to where they feel confident in taking rates lower, but they want to make sure over the next several months that inflation doesn't increase the rate at which it's rising. Ultimately, I think the first rate cut could come as soon as the May FOMC meeting, but I think it's more likely that the Fed will cut rates by 25 bps for the first time at the June meeting.
Over the past 159 weeks, I have allocated $15,900 dollars to the Dividend Harvesting Portfolio. In addition to the weekly allocation of $100, the portfolio inched its way to another record in the profitability category. The Dividend Harvesting Portfolio finished week 159 with a balance of $17,467.86 placing it in the black by $1,567.86 or 9.86%. In week 11 of 2024, the Dividend Harvesting Portfolio generated $25.50 in dividend income, and I am currently on pace to generate roughly 33% of the total income generated throughout 2023 in the first quarter of 2024. In week 159, I added to my positions in the JPMorgan Nasdaq Equity Premium Income ETF (JEPQ), and the BlackRock Capital Allocation Term Trust (BCAT). The combination of reinvesting the dividends generated this week and increasing my positions in JEPQ and BCAT increased the Dividend Harvesting Portfolio's forward projected income by $11.71 (0.84%). I have now exceeded $1,400 of projected annualized dividend income, and I think that there is a strong possibility that I reach $1,500 before the summer begins. Ultimately, I think that things will progress well for the Dividend Harvesting Portfolio throughout 2024, and I may get closer than I originally expected to reaching $2,000 of forward dividend income by the end of 2024.
Steven Fiorillo, Seeking Alpha
I can't complain; things are going well. Week 159 marks the 18th consecutive week that the Dividend Harvesting Portfolio finished in black. Rather than investing in a long-term bond or CD, I am basically building out a personalized income-producing ETF to meet my goals and objectives. The Dividend Harvesting Portfolio isn't focused on replicating the returns of the market, as I have other investments for that. I am building an income-producing portfolio from the ground up on a budget of $100 per week with the main objectives of mitigating downside risk and generating ongoing dividend income. The chart below indicates my invested capital with the blue line and the portfolio value with the red line. Despite geopolitical conflicts, inflation, and macroeconomic headwinds, the Dividend Harvesting Portfolio has done a good job at mitigating risk, and more recently, it's been pulling away from my invested capital to the upside. I think the end-of-the-year 2024 results will be very encouraging, and I look forward to seeing how much forward dividend income is produced after another 41 weeks.
Steven Fiorillo, Seeking Alpha
Here's how much dividend income is generated per investment basket:
Steven Fiorillo, Seeking Alpha Steven Fiorillo, Seeking Alpha
Collecting dividends can serve many functions in a portfolio. Some investors utilize dividends to supplement their income and live off of them. I'm building a dividend portfolio for myself 30 years into the future. In 2022, I collected $507.80 in dividend income from 533 dividends. In 2023, I collected $978.11 in dividend income from 660 dividends. After the first 11 weeks in 2024, I have collected $283.22 from 144 dividends. This is 29.02% of the total dividend income generated in 2023 from 21.82% of the dividends produced.
These dividends allow me to gain additional equity in my investments, while increasing my future cash flow in down markets. This style of investing isn't for everyone, but if you're looking to generate consistent cash flow while mitigating downside risk, this method has worked for me. The Dividend Harvesting Portfolio finished strong in 2023, and I am looking to generate $1,500 of dividend income in 2024 while getting to the point where I never dip below $100 of monthly dividend income being generated.
Steven Fiorillo, Seeking Alpha Steven Fiorillo, Seeking Alpha
We're halfway through March, and I have generated $65.76 in dividend income so far. There are another 2 full weeks left, and I am feeling confident that I will exceed $100 of dividend income being produced this month. Last year, $78.88 was generated in March, and I am 83.37% of the way there already. The more I look at how much income the portfolio is generating, I really do believe that unless several positions cut the amount of income they are generating that, February will be the last month of double-digit income.
Steven Fiorillo, Seeking Alpha
By adding to JEPQ and BCAT I have pushed all the positions that were close to generating at least 1 share per year from their dividends into the green section of the table below. There are now 32 positions that are generating at least 1 share per year from reinvesting their dividends, and those new shares are adding roughly $103.11 of additional annual income to the Dividend Harvesting Portfolio. As we head into week 160, I probably won't have an opportunity to add to an existing position, and I feel that it's going to be a while before a new position makes it into the green section of the table below. I am hoping to get a few additional positions to generate at least 1 share from their dividend income by the summer, but we will see what happens.
Steven Fiorillo, Seeking Alpha
Steven Fiorillo, Seeking Alpha
REITs continued to retrace a bit further as they now represent 19.63% of the Dividend Harvesting Portfolio. I have a 20% sector threshold that I try to stick to, and while I would love to add Realty Income (O) at these levels, I want REITs to decline a bit further. ETFs are creeping back up there as I have continued adding to JEPQ so I will be curtailing allocating more capital toward ETFs for a bit. I am going to try and focus on individual equities and maybe some additional CEFs for the time being. I think it's going to be interesting to see how the portfolio performs when the rate-cutting cycle starts, as many of the positions should do better in a lower-rate environment rather than a higher-rate environment.
Individual equities now represent 37.70% of the Dividend Harvesting portfolio while generating 28.09% of the dividend income. REITs, ETFs, CEFs, and BDCs make up 62.30% of the portfolio and generate 71.91% of the forward income. I plan on adding to every asset class within the Dividend Harvesting Portfolio throughout 2024, but in the early stages, I will try to divert capital away from REITs in the short term.
Steven Fiorillo, Seeking Alpha Steven Fiorillo, Seeking Alpha Steven Fiorillo, Seeking Alpha
Altria Group (MO) had a big week as it appreciated 3.86%, causing the percentage of the portfolio it represents to jump to 4.96%. I have been saying for a while that I think MO is very undervalued, and I was taking the opportunity to add more shares around the $40-$41 levels. I am happy that Verizon (VZ) and Enbridge (ENB) are under the 4% levels, and while I would love to add to my position in MO, I am holding off for a bit. I think MO is going higher, and it will probably be a month or 2 before it's back down to around 4% of the portfolio. As the week's progress I am expecting the bottom slots in the top-10 to change a bit.
Steven Fiorillo, Seeking Alpha
I wish there was a way to aggregate the information below from my account because I would love to put more tables together for all the positions. Since positions at the bottom of the top 10 have been changing, I will try to create a second table sometime in the future as I find the information very interesting. There has been $5,121.38 allocated toward the initial investments in the top-10 positions in the Dividend Harvesting Portfolio. $503.66 in dividend income has been generated, which is 9.83% of their initial investments. The top-10 positions are now valued at $5,919.50, an ROI of $798.12 or 15.58%. These positions are projected to generate $471.32 in annualized income, which is a forward yield of 9.2%. The top-10 holdings within the Dividend Harvesting Portfolio represent 33.89% of the total portfolio value while contributing 33.42% of the total dividend income being generated.
Steven Fiorillo, Seeking Alpha
In week 159, I added to my existing positions in:
JPMorgan Nasdaq Equity Premium Income ETF
BlackRock Capital Allocation Term Trust
Week 160 will mark the 16th reader suggestion week. Every 10th week I add to a new suggestion or a previously selected suggestion from the Dividend Harvesting Portfolio community, so please leave all your income-producing ideas in the comment section.
While anything can happen this week after Fed Cahir Powell speaks, the Dividend Harvesting Portfolio has done a remarkable job at mitigating downside risk. When macroeconomic headwinds created an ugly narrative, I added to positions every week, and it's been paying off. No matter what happens, I am building an income-producing portfolio that should continue mitigating downside risk and generating ongoing income. Looking at the chart below, the amount of forward annualized income continues to grow at an increasing rate despite several positions reducing their dividends since the Dividend Harvesting Portfolio's inception. I am excited to see how things progress in 2024, and no matter what happens this week, I will make all these investments with a long-term horizon and continue reinvesting all of the generated dividends. Please leave all of your comments and suggestions in the comment section. I look forward to interacting with everyone.
Steven Fiorillo, Seeking Alpha Steven Fiorillo, Seeking Alpha
