Quantigence July 2016 Portfolio Update

As we conclude the month of July, it’s our first month we’ve spent buying the 30-stock Quantigence portfolio that we put together in June. Surprisingly, we already have to change one stock as chip company Linear Technology Corporation (LLTC) will be acquired by a company called Analog Devices (ADI). Provided the acquisition goes through, we’re going to swap LLTC with ADP because these two technology stocks have roughly the same Q-Score and ADP is the only information technology stock left for us to add according to our methodology.

This month we saw $182.42 in dividends paid as seen below:

UGI 7/1/2016 $34.73
BEN 7/15/2016 $23.94
O 7/15/2016  $43.99
FRT 7/15/2016 $59.89
MDT 7/27/2016  $ 19.87

We saw dividend payment increases this month of 13.16% from Medtronic (MDT), a 4.4% raise from UGI Corporation, and a minuscule .25% raise from Realty Income Corp (O).

In regards to money paid into our portfolio, we managed to contribute $8,515 throughout the month buying every single one of our stocks except ADM. The reason we couldn’t buy ADM is as follows.

At our day jobs working for a prestigious finance firm, we have a whole army of people who essentially do very little real work living and who call themselves “compliance”. Essentially, every firm out there is paranoid about being taken to the cleaners for insider trading charges and they should be! Just don’t confuse insider trading with my $555 purchase of ADM shares. Try to use common sense and justify your existence by adding value instead of opening up your rule book and spouting drivel. Anyways.

So right now we’ve invested about $182,727 into our Quantigence DGI Portfolio and we’re sitting on paper gains of about 17.42%. Now here’s the problem. Presidential elections are coming up and we can expect an increase in volatility and an increased likelihood of black swan events. What we’re getting very tempted to do is scale back our monthly purchases significantly. With our current purchase plan, we’re going to be buying around $9,000 of stock every month for the next 2 years. Since we already have invested 45.5% of our target portfolio size, we’re not going to miss out if the market continues to gain between now and the end of the year. If any of our stocks drop sharply, we can resume our purchases. If the market tanks, we resume all of our purchases as planned.

So for next month, we’re going to scale back purchases quite a bit. We know, this is kind of like market timing and we’re all about dollar cost averaging. The truth is though that we’re facing an unprecedented presidential election in the USA with uncertainty and fear globally at an all-time high. It’s easy enough to tone back our buying until the presidential election is over and then we can resume our 2 year buying plan. We’ll simply take all our monthly purchase down to the required minimums and of course we’ll continue to put in around $500 per month in reinvested dividends through our DRIPs.

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