My Own Portfolio : My Passive Income Report Out September 2018

Sunny warm sunday in October….amazing how the climate is changing. The warmest 14th of October in Belgium since years. Also election day in Belgium. Will it change much for the future ? I don’t think so.

Did you notice what happened last week ? All media and newspapers put it in their headlines. The stock markets colored red (see blog post pic) and tech stocks dropped as a brick.

In the BEL20 Stock market index, companies total market cap dropped 14 billion in ONE WEEK. It’s been since february 2016 that the stock market in Brussels got an uppercut of 4,9%. Of course this sell off got triggered by a worldwide sell off that started in the US markets.

Sunday mornings I always start my stock market review with the video of Garry Davis (Specialist Share Education) from Australia. According to Garry, the bull market is not over. We don’t know how this is going to play out and if more selling is going to come in the next coming weeks. The stock indices reacted mainly to the increasing interest rates, the trade wars, Brexit and the Italy debt situation. Is this a healthy correction like in February ? We will see….

In his video Gary compares the current stock market drop with the stock markets drops in 2008, 2011, 2015, 2016…shown in the graph above. In each stock market drop, there were several bounces spread over several weeks and/or months. After volatile periods, direction and a clear trend is shown again. The stock markets dropped until the 200 Simple Moving Average. This line is a significant support line. it will be important whether we will drop below. Gary advises to be conservative these days. He says we will have to wait few more weeks how this will play out going forward.

What I noticed in this stock market, is that the Russell 2000 IWM index has been leading the other indexes. Small caps are a good indication of the general trend.

So time to dive a little more detail into the Market Analysis.

Market Analysis

One of the voices in a global economy that I follow closely is Christina Lagarde, managing director of the International Monetary Fund (IMF). She said that policy makers should prepare for more market volatility amid further financial tightening and “choppy” waters in the global economy stemming from trade tensions.

The IMF fund’s advice to central bankers and finance chiefs is to continue building monetary and fiscal buffers for the risks ahead. “Now is not the time to say, OK, fine, let’s just relax and do a bit of fiscal tolerance here and a slowing of reforms,” Lagarde said. On the trade disputes, she said “our message was very clear: de-escalate the tensions, and open and reform the dialogue.” We will see if any tangible will come out of the next meeting between president Trump and president Xi of China.

on the 8th of October when I was in the United States, the following headline showed up in the Wallstreet Journal. Rising treasury yields increase likelihood that investors will pull back from shares. Higher yields on long-term US government debt pose a big threat on the durability of this more-than-nine-year-old bull market for stocks. Higher yields also put a pressure on company investments if they have high debt. The earnings season has kicked off and we will see how profits and earnings guidance for different companies in different sectors will turn out.

When we analyse the performance of the SPY (screenshot 14 October) we can clearly see that the SPY has broken the the 13, 50 and 100 EMA in ONE WEEK. We broke the 200 SMA but bounced back on Friday. If we break next week the 272 SPY level, we will see levels of 268 and 266 very soon !

Remember that bull markets always climb using the stairs but bear markets use the elevator. A great expression according to me !

All FANG stocks did selloff big also past week. Keep an eye on those stocks as well next week. Netflix, Goldman Sachs and 50 others report earnings next week. Earnings season will this time be very important.

Let’s dive in the numbers of my September Passive Income Income Report.

My Passive Income in September 2018

In September 2018 we received a total of 582,70 $ passive income. We received only dividend income from our ETFs. STILL no options income but we spend a lot of time learning different options strategies. We did hit our monthly goal of 550$ per month.

Below you see the monthly summary overview of the cash flow coming into my bank account.

Portfolio Analysis and Growth

So far we have 5646,77$ passive income for the year 2018. This is 56% of our yearly objective. When we compare our monthly averages, we have more stable payouts compared to last year.

The Euro/Dollar trend

We keep on following the EURO/USD valuation. The currencies have been stable and EUR/USD has been moving in the range of 1,16 and 1,18. We expect the dollar to become stronger over time. As you know, we prefer a stronger dollar as this benefits our portfolio.

Going forward

October, November and December are 3 months that I need to do it ! Can I make 2500$, the gap bridging between the dividend income and my yearly goal ? Past saturday my mentor gave a training on how to invest in a volatile market. My dividend portfolio is hedged and the decline in my dividend stocks was completely offset with an increase in value of my hedge position. I will keep my hedge position on for the coming period. Personally I am more bearish on the market for the coming weeks. High government debts with a fast increasing interest rate, trade wars impacting the buying power of people and companies, and some other market risks as Italy debt and Brexit…all together are a dangerous cocktail. This is not a market for a buy and hold investor. Protect your positions or step into cash. Our current portfolio is 22% Cash and 78% invested in the market. We focus on learning how to make money in a declining market and increase our cash position.

Are you working out investment strategies ? Don’t hesitate to leave your comments and feedback. Let us know what you think.

Good luck with your personal finance strategy! Thanks for following us on Twitter and Facebook and reading this blog post. As always we end with a quote.

Sources : Yahoo Finance

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My Own Portfolio : My Passive Income Report Out September 2018