February 2016 Sales and Buys

Since I haven’t add much time to give updates as they happen, I’m going to include February’s transactions here. Despite not looking like it, I was actually quite busy this last month.

As a reference, my dividend income at the start of the month was $5313.

In my Roth IRA, I sold KMI, which dropped my annual dividend down to $5224. This transaction was also at a loss, which I’m especially opposed to in a tax-free account since you don’t get to benefit from the loss. However, I immediately purchased 53 shares of the Royal Bank of Canada (RY), which offset the dividend loss. It was a difficult decision to sell KMI because I do believe that they will do well when the oil industry turns around. I’ll definitely be looking for a good point to get back in. But, I think RY will out-perform.

In my brokerage I also sold portions of my position in BP and BBL. These were both at a loss, so I did reap some tax loss benefit. Collectively, my annual dividends decreased by $240 and $372, respectively. I will especially like to get back into BBL, particularly if they announce a dividend cut because I’d expect the stock to drop even more after that announcement. Edit: I hadn’t added it into my dividend tracking portfolio yet, but BBL did announce a dividend cut of 75% (similar to KMI), dropping the semi-annual dividend from $1.24/share to $0.32/share. This cut decreased the annual dividends to $175.78 (from $681!). Consequently, my partial sale of BBL only decreased my annual dividend by $96.

I used the proceeds from these sales to purchase Gilead Sciences (GILD). I believe Gilead is in value territory and has a huge growth component ahead of it. They are one of the biotechnology leaders in immunotherapy. Similar to my sale of KMI, I think GILD has the potential for better growth than BP or BBL. It also pays a 1.97% dividend with plenty of cash flow for future raises.

The purchase of GILD added $77.40 to my annual dividends.

I also closed my account at Loyal3 and transferred my holding of BRK-B, DIS, and UL to Schwab. I still really like Loyal3 as a company. Their commission free method of investing is great. I loved the fact that they allowed you to invest a fixed dollar amount each month through purchases of partial shares. However, Schwab’s portfolio analysis tools and having most of my investments localized with them will simplify things. I’m also going to moving to a new location and job shortly so will have larger lump sums of money available to invest…the free commissions won’t be as enticing as they once were.

My annual dividends at the end of the month of February were $4705. Quite a substantial drop, but one that I’m already starting to correct in March. More details soon…

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