November 2018 – Fire Dividend Portfolio Update

We had another volatile month in the stock markets. Volatility always bring opportunity and again this month had me deploying more cash to growth related holdings.

By the end of November 2018, I have deployed around 40% of my cash holdings. Cash deployment will be halted unless we have a deepening correction resulting in correction in prices of around 10-15% from recent lows. In the meantime, looks like I will be recharging some of my cash holdings.

Lets see how the holdings have held up during the volatile month.

 

Buy Orders

Large corporate debt accumulation during the low interest rate environment is starting to raise questions on potential risks on margins and earnings for a handful of companies that may have become over leveraged. Rising interest rate environment is raising questions on how the companies will service such debts and how it may effect future earnings.

I think the time has come to exit the high yield holdings. The yield from corporate bonds during near zero interest rates were great when higher yields were harder find. The growing awareness of such risks may further have investors selling out of these assets.

I shifted holdings from high yield bonds towards value stocks that have good dividend growth track records. I like the low beta so I shifted more holdings into SPHD. The correction brought a great time to shift into value stocks as valuations were nicely adjusted.

 

Dividends

I noticed my love for dividend investing grew more as I live this FIRE (Financial Independence Retire Early) lifestyle. Prior to my current lifestyle I was mostly focused on growth investing. I am still more weighted on growth because of factors such as my age and my passive income that allows me to be positioned this way. I love the passiveness of such income which truly frees my time to pursue what I wish to do in life.

Retiring in your 30’s have many risks but Its exciting to learn about such risks and figuring out how to mitigate them. I will write more about the risks to retiring early in a future post. I would love to hear more from others who also retired early about such risks. Thank you for reading.

 

What I use:

What I use to manage my investments. Get $20 when opening an account using this link. PERSONAL CAPITOL

What I use to manage my personal finances. MINT