Dividend Harvesting Portfolio Week 153: $15,300 Allocated, $1,349.21 In Projected Dividends

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Big tech earnings and the Fed meeting dominated the headlines, with the S&P 500 and Nasdaq finishing the week up.META was the winner this earnings season, with shares climbing 19.2% after a strong ...

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PM Images This was a wild week as big tech earnings and the Fed meeting dominated the headlines. The S&P 500 closed the week out up 1.31%, while the Nasdaq finished up 0.93%. Meta Platforms (META) was the winner this earnings season as shares climbed 19.2% this week after delivering a blowout quarter, implementing a dividend, and authorizing an additional $50 billion toward buybacks. Jerome Powell delivered remarks at the 1/31/24 Fed press conference that were more dovish than I expected but more hawkish than many wanted. I have been indicating that nobody is listening to Jerome Powell, and the market is getting ahead of itself, pricing 150 bps of cuts for 2024. We have a strong economy where GDP grew 3.3% in Q4 2023, and the U.S. added 353,000 jobs in January 2024. The Fed has been walking a fine line, and based on the data, there is little reason to believe the Fed will cut rates in Q1 of 2024. Jerome Powell took as much of a victory lap as he could without committing to anything. The Fed still expects to cut rates in 2024, but not on the market terms. I think the more likely scenario is that the first cut occurs in May or June unless something significantly changes in the data. I will be looking at quality REITs and some other areas over the next several months because I think there is going to be an opportunity to load up on specific assets before cuts occur. A lot of positive news came out this week, but New York Community Bank (NYCB) cut its dividend by more than 70%, which was certainly negative for the Dividend Harvesting Portfolio. I will address this in the following section, and I plan on writing a dedicated article on NYCB in the near future. Over the past 153 weeks, I have allocated $15,300 to the Dividend Harvesting Portfolio. The account balance has fallen to $16,481.96 after the NYCB news, and some of the underlying assets sold off upon Jerome Powell dismissing the possibility of March rate cuts. The Dividend Harvesting Portfolio is still in the black by $1,181.96, which is a profit of 7.73% on invested capital. The amount of dividend income generated in week 5 of 2024 was the largest amount the Dividend Harvesting Portfolio has produced at $52.90. In week 5 of 2024, I added to the JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) before big tech reported earnings, and Pfizer (PFE). I also moved the majority of the cash position into the iShares 0-3 Month Treasury Bond ETF (SGOV). The Dividend Harvesting Portfolio's forward projected income increased by $12.04 (0.90%) to $1,349.21 despite NYCB slashing the dividend. This is why I like to be diversified because you never know what will occur. I am excited to see how 2024 unfolds, as I believe there will be a lot of progress made in the Dividend Harvesting Portfolio.   Steven Fiorillo, Seeking Alpha The overall performance of the Dividend Harvesting Portfolio since inception and NYCB Despite a setback, the Dividend Harvesting Portfolio finished in the black for its 12th consecutive week. Things are going well, and I am not in a position to complain. The Fed meeting didn't go how the market necessarily wanted it to go, and shares of NYCB fell off a cliff while reducing the dividend. This is the exact reason why I have built the Dividend Harvesting Portfolio this way. Shares of NYCB fell -41.76% this week and cut the dividend by 70.6%. If NYCB had a portfolio weight in the 10-20% range this week, it would have been devastating as both the portfolio value and forward dividend income would have significantly declined. Ensuring that no position exceeds a 5% portfolio weight and that I am diversified across different sectors and funds allows me to mitigate risk, which is one of my fundamental objectives and generate substantial ongoing forward dividend income. Specifically regarding NYCB, I am disappointed in the management. Normally I read the transcripts and only listen to 5-6 of the quarterly earnings calls because I follow so many companies, but in this case, I made it a point to listen to NYCB's. In my opinion, they should have pre-warned or discussed this last quarter. While I think NYCB will rebound in the future, the management team did a poor job of communicating with shareholders and discussing the ramifications of exceeding $100 billion in assets under management (AUM) as it made them a category 4 large bank, which enhanced banking standards and put NYCB in a position where they need to abide to different capital requirements, liquidity standards and requirements for overall risk management and stress testing. In my opinion, management should have discussed this when the acquisitions were occurring and made the shareholders aware that the dividend may need to be reduced in the future to build their reserve fund and maintain the new standards they would be subjected to. I am not exiting my position yet, and I may even buy more over the next several weeks to lower my price per share. In the future, after I am at least even on the position I may revisit this idea, but for now, I am sticking with NYCB in the Dividend Harvesting Portfolio.   Steven Fiorillo, Seeking Alpha The Dividend Harvesting Portfolio dividend section Here's how much dividend income is generated per investment basket:  Equities $383.99 (28.67%) ETFs $304.71 (22.75%) REITs $263.89 (19.70%) CEFs $232.27 (17.34%) BDCs $154.60 (11.54%) Treasuries $9.76 (0.73%)    Steven Fiorillo, Seeking Alpha  Steven Fiorillo, Seeking Alpha Collecting dividends can serve many functions in a portfolio. Some investors utilize dividends to supplement their income and live off of them. I'm building a dividend portfolio for myself 30 years into the future. In 2022, I collected $507.80 in dividend income from 533 dividends. In 2023, I collected $978.11 in dividend income from 660 dividends. After the first five weeks in 2024, I have collected $153.99 from 69 dividends. This is 15.78% of the total dividend income generated in 2023 from 10.45% of the dividends produced. These dividends allow me to gain additional equity in my investments, while increasing my future cash flow in down markets. This style of investing isn't for everyone, but if you're looking to generate consistent cash flow while mitigating downside risk, this method has worked for me. The Dividend Harvesting Portfolio finished strong in 2023, and I am looking to generate $1,500 of dividend income in 2024 while getting to the point where I never dip below $100 of monthly dividend income being generated.   Steven Fiorillo, Seeking Alpha  Steven Fiorillo, Seeking Alpha January 2024 ended up being a record-breaking month for dividend income being produced from the Dividend Harvesting Portfolio. There was $125.87 in dividend income generated, which is an increase of $57.54 (84.21%) YoY. I have a feeling that this could be the start of the never-ending triple-digit monthly income generated from the Dividend Harvesting Portfolio. I am excited to see where this ends up, as in 2022, there was a $37.38 difference between the amount of income generated from January to December, and in 2023 there was a $24.05 difference. There is certainly a chance that in December of 2024, the Dividend Harvesting Portfolio generates $150 or more of dividend income.   Steven Fiorillo, Seeking Alpha The Dividend Tracker is indicating that there is going to be about $98 of dividend income being generated in February. There are less days in February and some of the dividend payouts for the month could be impacted, but I am not worried. I think that there is a good chance I am going to hit the $100 level. Either way, January or March will most likely be when the triple-digit string of dividend income starts. I hope it's January, but I am fine with it being March.   The Dividend Tracker As NYCB's dividend was drastically reduced, there are now 29 positions generating at least 1 share per on an annual basis from reinvesting their dividends. Roughly $100.93 of new income is being produced from the new shares. I still think it is possible to get 10-15 of these positions into the green section of the table below throughout 2024, and I am looking forward to watching all of the dividends reinvested as the year progresses.   Steven Fiorillo, Seeking Alpha The Dividend Harvesting Portfolio Composition   Steven Fiorillo, Seeking Alpha Well, REITs took a bit of a hit this week and have fallen to 19.2% of the Dividend Harvesting Portfolio. Depending on how I am feeling, I may start slowly adding to some REITs throughout the next several months due to the Fed's decision causing another opportunity. I ended up allocating capital toward Treasuries, so a new section has been created as they represent 1.22% of the Dividend Harvesting Portfolio. Individual equities now represent 38.38% of the Dividend Harvesting portfolio while generating 28.67% of the dividend income. REITs, ETFs, CEFs, and BDCs make up 61.62% of the portfolio and generate 71.33% of the forward income. I plan on adding to every asset class within the Dividend Harvesting Portfolio throughout 2024, but in the early stages, I will try to divert capital away from REITs.   Steven Fiorillo, Seeking Alpha  Steven Fiorillo, Seeking Alpha  Steven Fiorillo, Seeking Alpha Verizon (VZ) is back on top, while Altria Group (MO) slipped to being the second largest position in the Dividend Harvesting Portfolio again. AT&T (T) also made the top 10 as the PIMCO Dynamic Income Fund (PDI) came off the list. As much as I don't want to add to any of the top-10 holdings in the Dividend Harvesting Portfolio, it's becoming increasingly difficult not to. Last week, I indicated that if Altria delivered strong earnings, I would consider adding to my position, which may occur.   Steven Fiorillo, Seeking Alpha I have allocated $4,854.12 to the top 10 positions in the Dividend Harvesting Portfolio, and they have generated $511.34 in dividend income. Overall, these positions have generated 10.53% of my original investment from their dividend income. These positions are now worth $5,555.01, which is an ROI of $700.90 or 14.44%. These positions are projected to generate $431.49 in annualized income, which is a forward yield of 8.89% on invested capital. The top-10 holdings within the Dividend Harvesting Portfolio represent 33.70% of the total portfolio value while contributing 31.98% of the total dividend income being generated.   Steven Fiorillo, Seeking Alpha Week 153 additions In week 153, I added to the following positions:  JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) Pfizer (PFE) iShares 0-3 Month Treasury Bond ETF (SGOV)  JPMorgan Nasdaq Equity Premium Income ETF  I wanted more exposure to the Nasdaq so I decided to add another share of JEPQ. JEPQ is generating a 9.44% yield and pays a monthly distribution. I also am working on getting JEPQ to produce at least 1 share annually through its distribution.  Pfizer  PFE beat Q4 earnings by $0.10 despite missing on the consensus revenue estimates I think the guidance was strong as PFE provides a range of $58.5 to $61.5 Billion for 2024 revenue and $2.05 to $2.25 for EPS. I still think PFE is undervalued, and I am happy to collect the 6.13% dividend yield while I wait for my investment thesis to play out.  iShares 0-3 Month Treasury Bond ETF  I had over $200 in cash not doing anything, so I purchased 2 shares of SGOV after they declined from paying their monthly dividend. SGOV is currently generating a dividend yield of 4.93%, which allows my cash to work for me while I wait for some opportunities.  Week 154 Gameplan I am strongly considering adding to Altria Group after their strong earnings report. I will also consider AT&T and maybe the Cohen & Steers Infrastructure Fund (UTF). Conclusion I believe this is the 4th dividend reduction the Dividend Harvesting Portfolio has experienced since its inception. NYCB blew up as shares declined over 40%, and the dividend was slashed over 70%. There was no advanced warning, and, in a way, I am glad it happened. I am not happy that my position is in the red or that the amount of income that is being produced from NYCB has been lowered. I am citing this as an example of risk mitigation. The Dividend Harvesting Portfolio absorbed the blow quite well due to its level of diversification. Over the years, there have been comments disagreeing with how diversified the Dividend Harvesting Portfolio is, and that's fine as it's their opinion. The recent event is just another example of why I have structured the underlying assets this way. I have been able to absorb positions blowing up, macroeconomic events, and geopolitical tensions. I am very happy with the results as my primary goals of generating ongoing income and mitigating risk are being met while the secondary goal of capital appreciation is being achieved as well. Please leave all of your comments and suggestions below as I try to interact with everyone in the comment section.    Steven Fiorillo, Seeking Alpha  Steven Fiorillo, Seeking Alpha","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2409645748"}