Portfolio status for 2019, outlook for 2020 and evaluation of strategy.
2019 is coming to an end, and what is better then to look back and evaluate and then look forward and confirm/renew your strategy.
The Minimal5 portfolio – which is the one that will bring me to FIRE – is currently standing at 2.837.211 Dkk, or roughly 425.000 USD.
This year has really been a year of building out my number of listed stocks that I keep in the portfolio. Initially, I started building it with a couple of unlisted shares in solar farms, and real estate. These are the “big chunks” you can see in the chart below. Roughly 2/3 or so of the portfolio is made up of these 3 investments. This is way too little diversification to have, and hence that is why I have spent this year on adding a number of listed shares with a decent dividend yield.
I started the year adding a bit of Danske Bank, which have been ranging around 8-9% of expected dividend yield. If you have been following the stock, you will know that it has been weighed down heavily by the money laundering scandal involving their estonian branch. This is all known by now, and all we are waiting for is any potential fines that will be layed on the bank. I am probably not as pessimistic as the market, and hence I have chosen to include it in the portfolio.
Additionally, I have added insurance, farmaceutical, other banks and even a bit of retail. Total cost of the portfolio has been 2.882.432 Dkk before dividends, and 2.848.266 Dkk if you include the dividends I have received in 2019. This is roughly also 425.000 USD, so all in all a 2019 of almost standstill.
Looking at the numbers, there are mainly two reasons for this. The first is that the unlisted shares I have do not get their market value updated, as there is “no market”, so it only opdates like once a year. Hopefully there has been some value add here :-). Second, unfortunately the market value is being held down primarily by the stock with the highest dividend yield on the paper – Danske bank. This is mainly where I have lost the money that have held the portfolio down.
When it comes to dividends, I have received 34.166 Dkk, or around 5.100 USD. The unlisted shares I have will not start to yield dividends until 2020, which was always expected as part of the prospect. Assuming similar dividend levels for 2020, as this year, and adding in the expected dividends of the unlisted, I am currently targeting around 139.329 Dkk or 20.800 USD.
With roughly 21k USD in expected dividends next year, we will be very close to achieving a state where most of our fixed cost for rent, and child care is covered by passive dividen income. In terms of yield, it currently looks like it will be around 4.8% for 2020.
In the new year, we will continue to add dividiend stocks with a high yield to the portfolio, but also continue to diversify the portfolio a bit more (most likely going from 14 to 18-20)and to keep avoiding oil/gas/fossil fuels stocks. It is actually a bit annoying, that a lot of the oil stocks have quite high dividend yields, but with my zero carbon and sustainable agenda, they are none the less off the table.
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