I’m Pat Rosenheim, a.k.a. the PandA Trader.
I only post for my holdings, but they’re as accurate as I can make them. The symbols are; ACSF, AGD, ARCC, ARR, AWP, BDCL, BDJ, BFK, BGH, BKN, BTA, BXMX, CEFL, CLM, CRF, CSQ, CXE, DFP, DHF, DHY, DIAX, EAD, ECC, EVN, FFC, FHY, FIF, FLC, FPF, GAIN, GLAD, GOF, GUT, HIX, HPF, HPI, HPS, HYB, IVH, JPC, JPI, JPS, KIO, LDP, LEO, MAIN, MAV, MFM, MHI, MITT, MORL, NAD, NEWT, NHF, NRO, NRZ, NVG, NZF, OAKS, OIA, ORC, OXLC, PDT, PFD, PFO, PHK, PHT, PMF, PML, PMM, PMX, PSEC, PSF, QQQX, RA, REML, RFI, RNP, RQI, SAR, SCM, SPXX, STK, TICC, TLI, TPZ, TWO, & UTF. Quite a list, eh? (88 total issues held; 16 common stocks, 4 ETNs, and 68 CEFs, of which 17 are tax-free muni CEFs.) Most pay monthly! Only ARCC, BDCL, BXMX, DIAX, MITT, NEWT, NRZ, OXLC, QQQX, SAR, SPXX, STK, TICC, & TWO pay quarterly.
I wanted to talk about whether or not to DRIP dividends, or just let the cash accumulate so I could decide how often to invest, what to invest in, and how much to invest.
First, I’d like to show you a table (or is it a chart?) of all my holdings, ordered by total return (that’s the change in share price with the addition of dividends). I took the top 15 in our portfolio (comprised of all 6 accounts) at this point in time for the title of this post. It should be noted that this can change by the time you’re reading this, but it really doesn’t matter because I’m looking at this particular slice in time and it will still hold true no matter which holdings are the top 15. Here, then, is that table;
I could have picked any of the column headings to sort by, but it just so happens that I like the total return metric because it combines two of what I think are the most meaningful metrics; “% Change Since Purchase Rank” and “Rank By Yield”. The combination of these two metrics gives me a greater chance of accumulating holdings that are likely to be sold at a profit.
You might wonder why I would want to sell something that is doing so well by those 2 metrics. The answer is quite simple, really. I don’t like to leave money on the table, and when I sell a holding that money is returned to the portfolio as cash to either be re-invested as I see fit, or withdrawn as necessary.
Our portfolio is comprised of 8 accounts, held at 3 brokers. We have 2 Roth IRAs and a joint taxable account held at Capital One Investing (sharebuilder). We have 2 Roth IRAs and a joint taxable account as well as my IRA held at Fidelity. I have a taxable account held at Robinhood.
New money is only added to 3 accounts, the 2 joint taxable accounts (held at Capital One Investing (sharebuilder) and Fidelity) and my taxable account (held at Robinhood). Currently, the joint account held at Capital One Investing (sharebuilder) gets an infusion of $650 on the 15th of each month. The joint account held at Fidelity gets an infusion of $287 (even though the matrix shows $150) on the 15th of each month, plus an occasional deposit from our Fidelity Rewards Visa. The taxable account held at Robinhood gets an infusion of $150 on the 1st & 15th of each month.
Investing is done very differently at each of these brokerages.
Capital One Investing (sharebuilder) accounts each have an “Advantage” plan where I get 12 “free” trades each month (for a fee), so I invest twice a month (on the 1st & 3rd Tuesday) according to formulae on each tab on my Google sheets.
The Fidelity joint taxable account invests once a month, usually on or around the 15th.
The Robinhood account invests twice a month, usually on or around the 1st & 15th of each month.
Are you “with me” so far?
The accounts that get no new money are our Roth IRA accounts held at both Capital One Investing (sharebuilder) and Fidelity. My IRA held at Fidelity also gets no new money.
Let me help you visualize that;
So, you can see from the above matrix that we have 8 accounts; 3 that get new money each month, and 3 that do NOT DRIP (5 that DRIP).
Let me add the cash infusions to that matrix;
Now I’ll add this month’s dividends;
Now let’s just assume that all the new money in the Fidelity Joint account will be invested each month, and that all Fidelity accounts will continue to DRIP. That’s not a really large figure, is it? It’s just slightly larger for all 4 accounts than the lone Robinhood account.
Now, the Capital One Investing (sharebuilder) accounts each have that “Advantage” plan where I get 12 “free” trades each month (for a fee; $10/month for the joint account, and $12/month for each of the Roth IRA accounts).
I have designed the spreadsheets so that the cash in these accounts should last about 3 months, but since I am adding to the accounts each month it should last longer than that.
Let’s look at the calculations for those 3 accounts;
First, the joint account;
Now, the Roth-A account;
Finally, the Roth-p account;
Did you notice the slight anomaly with the second sheet? Average Annual Return of 2780.36%? That’s because I recently sold a winner and that left a small number of shares with an even smaller number of invested dollars, so the results are, uh, slightly skewed. It should start to level off with the investment on Tuesday. It should actually look closer to the 3rd sheet, but I’m not going to worry about it now. 😉
Now we need to add another line to our matrix, and that’s for available cash in the accounts;
So, now we can do some cipherin’ down by the cement pond, as Jethro Clampett would say.
Earlier, I posted the sharebuilder updates, so we’ll take those numbers and extrapolate from there.
First, the joint account;
This is the 2nd investment of the month, and it says we’ll be investing $123 twice a month, which by cement pond cipherin’ comes to $246/month. Remember we are adding $650/month so we’re not quite spending enough on investing. I reckon those figures will increase a might, come next month. We have a large enough balance to last more than 3 months, so we’re all set here.
Let’s look at Roth-A;
This is the 2nd investment of the month, and it says we’ll be investing $428 twice a month, which by cement pond cipherin’ comes to $856/month. Remember we are not adding any new money but we have a fairly large balance so we’re not quite spending enough on investing. I reckon those figures will increase a might, come next month. We have a large enough balance to last more than 3 months, so we’re all set here, too.
Let’s look at Roth-P;
This is the 2nd investment of the month, and it says we’ll be investing $615 twice a month, which by cement pond cipherin’ comes to $1230/month. Remember we are not adding any new money but we have a fairly large balance so we’re not quite spending enough on investing. I reckon those figures will increase a might, come next month. We have a large enough balance to last more than 3 months, so we’re all set here, too.
So, let’s see; We’ve looked at the 3 accounts held at Capital One Investing (sharebuilder), and they are looking to be sustainable as they are. We still have 5 accounts to go, but 4 of them (held at Fidelity) are pretty much just gonna DRIP with the exception of the joint account getting a deposit each month. That will just be used to buy whatever is the lowest in dollars invested.
Oh, I should mention that my IRA at Fidelity will be partially converted to my Roth IRA (also held at Fidelity) bit by bit over 6 years so that I won’t have a balance when it comes time to figure my RMD or MRD or whatever they call it when they force you to take a withdrawal. These conversions will take place on or about January 15th of 2018-2023.
My wife has a TSA and her withdrawals will probably start this year and continue every November 15th.
Okay, back to the DRIP or no DRIP thing.
Looking back on the data provided, it’s pretty easy to see that the majority of our holdings are in our Roth IRAs held at Capital One Investing (sharebuilder), and you can see that in our balances sheet, too;
So, about 1/7th of our total portfolio is set to DRIP, and the majority is not. I like it like that, because I get to pick what to invest in, when to invest, and how much to invest. In our Fidelity accounts, we hold only DTC discount-eligible holdings so we might get to re-invest at a discount of 0-5% but that isn’t guaranteed. That’s ok, I’ll take the chance.
I hope I’ve answered some of your questions about why I DRIP or don’t DRIP, why I sell when a holding has reached a new 52-week high, and why I invest the way I do.
I have to tell you that Robinhood is the cheapest for trade fees ($0!), but the Capital One Investing (sharebuilder) Advantage Plan is also pretty good at $1 or less for each buy trade (sell trades cost $6.95). Fidelity charges $4.95 for each trade (buy or sell). I buy each month with each broker, but it’s usually one trade with Fidelity, 2 trades with Robinhood, and 12 trades in each account held at Capital One Investing (sharebuilder).
Robinhood only allows one type of account; taxable brokerage.
The other 2 brokers allow more than one type of account, and are good for IRA accounts, and Roth IRA accounts.
PLEASE TAKE NOTE AND REMEMBER THIS!
I’m not telling anyone to buy anything or giving anyone any advice, because that’s illegal. You see, I have no letters after my name, like RIA, CFA, etc. I SIMPLY DO NOT GIVE ADVICE. I only tell (and show!) what I do. You, like me, are all alone in this.
And remember, always do your own due diligence!