I’m Going To Sell This Dividend ETF
My brokerage account on Charles Schwab currently consists of 22 different holdings, but I’ve had a craving to do some consolidating for a while now.
However, for a die-hard dividend enthusiast like myself, parting ways with a stock is never easy. We dividend investors typically buy with the intent to hold forever – or at least until the dividends stop flowing.
With that said, it’s easy to get attached to the stocks you hold, but it’s also important to know when to fold ‘em and I’ve identified four stocks that I wouldn’t mind saying farewell to, which I’m telling you all about here.
Among these four is JEPI, a covered-call ETF boasting one of the loftiest yields in my portfolio.
Source: Seeking Alpha | JEPI Dividend Scorecard
I started buying this fund maybe about a year after it came onto the market in 2020. At the time, covered call ETFs were all the rage. They were the “hot new thing” everyone was talking about, and you couldn’t open up YouTube without seeing at least one video talking about them.
So, I figured I would test the waters with JEPI. I put a little bit of money into the fund to see how it performed, and I’ve gotta say, JEPI’s pretty much delivered on the fund’s objective.
Source: JEPI Fund Objective
Truth be told, I don’t really have any serious qualms with the fund and have been content with its performance. At the same time, this is something I’d never make a large portion of my portfolio, and I’ve always known that JEPI wasn’t a “forever” hold for me.
Because of that, instead of continuing to have my money tied up in the fund, I would now rather use that money to build a more meaningful position in something I actually care about, even if doing so comes at the expense of less dividend income in the short term (which would likely happen since JEPI is one of the highest yielding positions in my portfolio).
Having said that, the fact that I’m considering selling out of JEPI at all calls into question whether it was a mistake to invest in the fund in the first place, and I don’t think it was at all.
At the end of the day, investing is a journey of discovery and perpetual learning, and sometimes there are just things you have to learn the hard way.
In doing so, you might end up making some investments that don’t quite fit the bill, but that ultimately might be what it takes to discern the positions that are truly worth holding.
Plus, I’m still up about 5.5%. At the end of the day, JEPI was a lesson I was paid to learn, and you can’t beat that.
Anyway, enough about me. I want to hear from you. What was the last stock you sold out of in your portfolio, and why did you sell it? Write to me here and let me know.
And a big thank you to the 16 readers who responded to last week's newsletter. You all rock, and I loved reading about which stocks you believe to be yield traps! 🙌
Dividend Investing Democratized
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PRESENTED BY THE DIVIDEND TRACKER
While I love my dividend portfolio tracking spreadsheet (see the "In My Portfolio" section), its functionality is pretty limited compared to what you'll receive from The Dividend Tracker.
The Dividend Tracker truly is a one-stop shop for dividend investors and offers a full suite of portfolio tracking and stock research tools. Among these, the feature I find myself using the most is the Payout Calendar, which shows you when you're getting paid, how much, and from which companies. I also use the platform pretty heavily for stock analysis, and like to compare/contrast my findings with those from Seeking Alpha.
In my opinion, The Dividend Tracker takes the best parts of both my dividend portfolio tracking spreadsheet and Seeking Alpha, and rolls them into one platform to offer investors a unified and refined experience.
While certain premium features do require a subscription, the free version of The Dividend Tracker still provides substantial value and is worth checking out if you're in need of something more in-depth than a spreadsheet to track your portfolio.
IN MY PORTFOLIO
Want to get my Dividend Portfolio Tracking Spreadsheet? Click here to get it for free.
ICYMI
My FOOLPROOF Way To Pick WINNING Dividend Stocks (3 Steps)
In this video, I'll be sharing my foolproof dividend stock research formula for brand new investors.
While this won't tell you EVERYTHING you need to know about researching dividend stocks, what's covered in the video is a great place to start, and you'll learn about a few important things to look out for as you begin searching for your next great investment.
CAREFULLY CURATED
📺 5 Dividend Growth Stocks For Every Investor - After taking an extended vacation from YouTube, Kevin Burgess is back with a bang, and here to tell us about 5 very attractively valued dividend stocks that you may want to consider for your portfolio.
🎧 Morgan Housel x Tim Ferris - This was an extremely powerful conversation that I highly recommend you all check out. In it, Tim and Morgan (author of The Psychology of Money) talk about Morgan's newly released book, the upsides of being rich and anonymous, and three simple goals to guide your life.
📚 A Tipping Point For REIT Investors - The Tipping Point by Malcom Gladwell talks about how the world is constantly "tipping" in different directions, and as of late, it's been tipping toward REITs. In this article, Brad Thomas talks about how the current high interest rate environment has created the perfect storm for higher-quality REITs to grow, consolidate, and scale.
SINCE YOU ASKED
"How many holdings do you recommend? I already have about 30, but I just came into about $25k."
- @mynamesnotwally | YouTube
This is easily one of the most common questions I get, and I think the "sweet spot" for diversification will be different for everybody.
Some investors will prefer a more concentrated approach with fewer holdings to closely monitor each position, while others would rather be more spread out to mitigate risk.
I don't know if there's a right or a wrong way to do it, but I personally would feel a bit overwhelmed with 30 different holdings at my current portfolio size. With that said, I also think it's natural to have a more expansive and diverse portfolio if you're working with a larger pool of money.
In your case, whether you choose to add more positions or stick with your current batch of stocks, the key is to align your amount of diversification with your comfort level and investment goals. I think you'll instinctually come to find your "sweet spot" over time.
Have a question? Ask me here to see it featured in an upcoming newsletter.
DREAMING OF MORE DIVIDENDS?
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