Dividend Harvesting Portfolio Week 182: $18,200 Allocated, $1,678.32 In Projected Dividends

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Fed Chair Powell signals rate cuts are imminent, with a 76% chance of a 25 bps cut in September and a 24% chance of a 50 bps cut.The Dividend Harvesting Portfolio reaches an all-time high in account ...

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PM Images From a macroeconomic perspective, this was the week investors have been waiting for. Fed Chair Powell addressed the nation from Jackson Hole and discussed how the labor market has cooled significantly from its overheated state. He outright stated that the time to adjust policy has come, and CME Group is now projecting that there is a 76% chance that rates decline by 25 bps at the September meeting and that there is a 24% chance that we see a reduction of 50 bps. CME Group is also predicting that there is only a 35.7% chance that the Fed will cut rates by 75 bps through the end of the year, with the most likely scenario coming in at 44.1%, which is 100 bps of reductions. Many have debated when the Fed would cut rates. I was never in the camp of March cuts, and I felt the first cut would occur anywhere from May – July, which didn't happen. Personally, I think the Fed waited too long, but at least we have a clear picture of when cuts will start to occur. The S&P 500 finished the week up 1.28%, while the Nasdaq climbed 1.4%. I think that the markets are going to rally into the rate-cutting environment, and that some will be surprised by just how many companies this helps. The Dividend Harvesting Portfolio should perform well, as many of the positions within the portfolio should benefit from the tailwinds of reduced rates. I think that all of the investments I made into REITs, BDCs, and other value stocks will be rewarded, and I am excited to continue investing in the next cycle. No matter what happens, I will continue deploying capital into income-producing assets on a weekly basis and build out the future stream of income. I don't think I can continue to state that I am surprised that new records are being made now that we have a clear perspective as to when the Fed will cut rates. In week 182, the Dividend Harvesting Portfolio established a new all-time high in account value and forward income being generated. After allocating $18,200 to the Dividend Harvesting Portfolio, the account balance finished week 182 at $22,035.16. This is an ROI of 21.07% on invested capital, as the portfolio is in the black by $3,835.16. This week, I decided to go with technology-focused ETFs heading into Nvidia Corporation (NVDA) earnings. I added to the NEOS NASDAQ-100(R) High Income ETF (QQQI), and REX AI Equity Premium Income ETF (AIPI) because I believe the AI trade is going to take the market higher, and these ETFs pump out large dividends. In week 182, I generated $12.31 in dividend income. The combination of reinvesting the generated income and making these investments increased my forward projected annualized dividend income by $21.03 (1.27%) to $1,678.32. The summer is winding down, and with another 18 weeks left in 2024, I think that the Dividend Harvesting Portfolio can finish 2024, generating between $1,900 - $2,000 of forward dividend income.   Steven Fiorillo, Seeking Alpha The Overall Performance of the Dividend Harvesting Portfolio Things are looking good for the Dividend Harvesting Portfolio as many of the investments I made when things during the rising rate environment are paying off. One of the most valuable assets I have with this portfolio is time, as I can wait years for an investment thesis to play out. Part of the success is because I could make tough decisions even if the timing wasn't correct in the moment and let my investment thesis play out. I have certainly gotten some positions wrong and have had to remove companies such as Intel Corporation (INTC), but over time many positions that were unpopular have come full circle. I have stuck with my core principles of not allowing positions to exceed 5% or sectors to exceed 20% of the portfolio. My investment premise has been to generate a portfolio that generates recurring income while mitigating downside risk. Capital appreciation has been a secondary objective as I am designing this portfolio to withstand downward cycles through diversification and continue generating income when times get tough. Every week, I allocate $100 to this account, no matter what happens with the market or in the macroeconomic environment. While things are going well, a correction is inevitable, and just like we saw when things got difficult in 2022, I believe that the Dividend Harvesting Portfolio will mitigate downside risk quite well.   Steven Fiorillo, Seeking Alpha The Dividend Harvesting Portfolio Dividend Section Here's how much dividend income is generated per investment basket:  Equities $459.15 (27.36%) ETFs $448.78 (26.74%) REITs $290.47 (17.31%) CEFs $281.04 (16.75%) BDCs $198.86 (11.85%)    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 33 weeks in 2024, I have collected $944.39 from 450 dividends. This is 96.75% of the total dividend income generated in 2023 from 68.18% of the dividends produced. My weekly average dividend income declined a bit to $27.78 this week. When I compare this to 2023, I am still generating an additional 64.20% or $10.86 on a weekly basis. The powers of compounding are starting to shine as I should generate 100% of the dividend income from 2023 before the 3rd week in September. One of the things I plan on tracking going forward is which week in the year the previous year's dividend income was completely generated. I am estimating that this will be accomplished in week 37 or 38 this year, and it will be interesting to see if the timeframe is reduced next year. As time progresses, the weekly income will increase, and the amount of capital being reinvested combined with the weekly contributions should dramatically impact the powers of compounding.   Steven Fiorillo, Seeking Alpha  Steven Fiorillo, Seeking Alpha We're down to the last week in August, and $95.41 of dividend income has been generated this month. I am excited that it looks like generating less than $100 of monthly income is in the past. While September hasn't even started yet, when I look at the chart below, the largest income-producing month has been the first month of each quarter. I am interested to see how much dividend income is generated in October and if the $175 level is breached. If it is, then there is a strong possibility that we will see at least 1 month with $200 generated next year. So far, I have generated $321.80 in Q1, $374.49 in Q2, and $253.47 throughout the weeks that have passed in Q3. I think it's entirely possible to reach a $500 quarter in 2024, and the best part is that the generated income should continue to grow as more capital is invested.   Steven Fiorillo, Seeking Alpha There are 35 positions generating at least 1 share per year from their dividends. I am estimating that the additional shares are producing $118.44 of additional income. When I look at the chart below, there are several positions I am working on getting to cross over to the green section that represents the positions that are generating at least 1 share on an annual basis from their dividends. The reason I am focusing on this is to enhance the power of compound interest, as I want as many positions as possible generating at least 1 share from their dividends annually. This is a work in progress, but eventually, I will have many more positions in the green section.   Steven Fiorillo, Seeking Alpha The Dividend Harvesting Portfolio Composition   Steven Fiorillo, Seeking Alpha  Steven Fiorillo, Seeking Alpha I am a bit surprised that REITs are still the number 1 sector, representing 19.65% of the portfolio. After Fed Chair Powell's speech, I shouldn't be surprised, but since I have been allocating capital towards ETF the past several weeks I am a bit shocked that ETFs didn't reclaim the top spot. Eventually, I will round out the portfolio a bit more, but for now, I am not anticipating any of the other sectors will come close to ETFs or REITs in the foreseeable future. I really need a bigger allocation in energy as I believe we're going to see a lot of growth over the next few years across this segment due to the increased energy needed for data centers. Individual equities now represent 39.47% of the Dividend Harvesting portfolio while generating 27.36% of the dividend income. REITs, ETFs, CEFs, and BDCs make up 60.53% of the portfolio and generate 72.64% of the forward income. I am working on getting individual equities to represent more of the portfolio. The long-term goal is to have the sectors be close to equal weight, but that may not happen for 5-10 years at this rate, if ever.   Steven Fiorillo, Seeking Alpha  Steven Fiorillo, Seeking Alpha The top-10 holdings haven't changed, only some of their positions. Altria Group (MO) is holding strong as my largest position in the Dividend Harvesting Portfolio. Enbridge (ENB) continues to gain steam as energy infrastructure companies are getting a boost from the realization that we will need more energy in the age of AI. I have a feeling that the bottom half of the top-10 will change over the next few months, but I don't see MO or ENB leaving the top spots anytime soon.   Steven Fiorillo, Seeking Alpha My allocation to the top 10 positions is $5,296.77, and they finished the week with a value of $6,894.58. This is an ROI of $1,597.81 (30.17%). There has been $703.79 of dividends generated and reinvested, which is 13.29% of the initial investment into these positions. I am now projecting that $502.21 of dividend income will be generated from the top 10 holdings, which have a forward yield of 9.48%. These positions represent 31.24% of the portfolio, while their forward dividend income is projected to generate 29.92% of the Dividend Harvesting Portfolio's annualized income.   Steven Fiorillo, Seeking Alpha Week 182 Additions In week 182 I added to the NEOS NASDAQ-100(R) High Income ETF, and REX AI Equity Premium Income ETF. NEOS NASDAQ-100(R) High Income ETF  I recently wrote an article on QQQI outlining my investment thesis which can be read by clicking here  QQQI utilizes a covered call strategy on the Nasdaq 100 to generate income but also implements an option spread to participate in some of the upside QQQI will sell covered calls to generate premium then take a portion of the premium generated and purchase out of the money call options to uncap some of the upside potential QQQI is on track to generate around 14% in dividend income on an annualized basis I believe AI will push the market higher and that the tech trade is still going to remain strong through 2025  REX AI Equity Premium Income ETF   AIPI is a big income fund as it's on track to generate 34.80% based on the initial distribution AIPI focuses on AI companies, and it's a small portfolio of 25 companies which include 8 positions I own individually Nvidia Corporation (NVDA) Palantir (PLTR) Meta Platforms (META) Cisco Systems (CSCO) Amazon (AMZN) Apple (AAPL) Alphabet (GOOGL) Intel Corporation (INTC)   AIPI invests in big tech companies that are building out AI and writes covered calls on the positions Since these positions have large premiums, AIPI is able to establish a very high yielding fund I think it's interesting and since I am bullish on tech, I am adding more to my position in AIPI, so I can benefit from reinvesting the large distributions  Week 183 Game Plan My game plan for week 183 has changed several times in my mind. Heading into NVDA earnings, I am considering adding to QQQI again, but I also want to add to some corporate debt funds heading into rate cuts, such as the PIMCO Dynamic Income Fund (PDI) or the PIMCO Corporate and Income Opportunity Fund (PTY). Conclusion Another week and more records are broken as the Dividend Harvesting Portfolio is generating $1,678.32 in forward dividend income (7.61% yield) and up $3,866.87 (21.25%) on invested capital. My investment goals are being met, which include generating recurring income and mitigating downside risk while producing capital appreciation. There have been some setbacks along the way, but throughout the entire series, the Dividend Harvesting Portfolio has always accomplished the goals I set out to achieve. I am excited about the future as the forward dividend income is starting to really increase, and I am projecting that around $139.86 will be generated in monthly income. This strategy isn't for everyone, but from an income perspective, being able to generate 7.61% while being in the black by a healthy margin is certainly attractive, especially heading into a lower-rate environment. I have built this portfolio from the ground up, starting with $100 and adding $100 per week for the past 182 weeks. Anyone can make their money work for them, and you don't need a large amount of seed capital to build an income-producing portfolio. I am excited to see where the portfolio ends up heading into rate cuts and the end of the year. Please leave all your comments and suggestions below. I look forward to interacting with everyone in the comment section.    Steven Fiorillo, Seeking Alpha  Steven Fiorillo, Seeking Alpha","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"Economic Data","news_rank":0,"symbols":[],"gpt_button":0},"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":"4.29.1","shortVersion":"4.29.1","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/2463425349"}