March 2020 Portfolio Update

What an incredibly turbulent month. Just as the snow melts, the market itself has had a meltdown of its own. From fears stemming from the outbreak of COVID-19 to an outright oil pricing war between Russia and Saudi Arabia, there has been no shortage of valuation-altering events.

CAD Dividends

Company	CAD Payments ($)	Div Increase (%)
RioCan Real Estate Investment Trust (REI.UN)	31.32
Johnson & Johnson (JNJ)	82.39
Corby Spirit and Wine Ltd. (CSW.B)	66.00
Fortis, Inc. (FTS)	76.40
Canadian Utilities Limited (CU)	87.08	3.00
Canadian National Railway Company (CNR)	20.13	6.98
Hydro One Ltd (H)	62.79
Chartwell Retirement Residences (CSH.UN)	5.00
Metro Inc. (MRU)	4.50	12.50
Brookfield Renewable Partners L.P. (BEP.UN)	138.42	5.34
Brookfield Asset Management (BAM.A)	3.83	12.50
Brookfield Infrastructure Partners L.P. (BIP.UN)	14.44	6.97
A&W Revenue Royalties Income Fund (AW.UN)	6.36
Enbridge Inc. (ENB)	20.25	9.76

USD Dividends

Company	USD Payments ($)	Div Increase (%)
Waste Management, Inc. (WM)	23.17	6.34
McDonald’s Corporation (MCD)	22.32
Yum! Brands, Inc. (YUM)	15.59
Yum China Holdings, Inc. (YUMC)	3.98
PepsiCo, Inc. (PEP)	8.12
Visa Inc. (V)	2.55
Microsoft Corporation (MSFT)	2.61

Dividend Summary

March brought in C$618.91 and U$78.34. In currency-neutral terms, this brings the monthly total to $697.25, just shy of the $700 ceiling which I’ve topped on one other occasion, back in December.

Collecting these dividends from such a wide selection of companies, 21 in total, provides plenty of healthy diversification. This is especially important in times of uncertainty. To date, the companies in my portfolio have announced no negative dividend news. I suspect that I may hear something from one or two at some point, but given how broadly my cash flow foundation is set, I am not terribly concerned.

I’ve exceeded my previous March record by over $100:

Year To Date Progress

A big pop in March over last year’s dividend earnings has led to a very solid total for dividends through the first quarter of the year:

Month	Dividends ($)
January	494.10
February	86.82
March	697.25
Total	1,278.17

Market Activity

This has been the most prolific purchasing period in my investing career. The only other time I can remember buying this much, this rapidly, goes back to late 2015 when I went on a buying spree for over $8,000.

The market has been volatile throughout March and I’ve been there along the way to invest. These are the moments in time that we live for as long-term investors.

The eight total trades I made this month is more activity that I’ll usually venture in an entire year. Such is the nature of using our opportunities when they come. When the pitch is just right, you swing big.

I purchased 120 shares of Toronto-Dominion Bank (TD) across six tranches this month for a total cash outlay of C$7,168.10. The high price was C$68.27 with the low price clocking in at C$49.93. My average purchase price was C$59.73 and yields 5.29%. Based on the quarterly dividend of C$0.79 per share, I am expecting C$94.80 quarterly or C$379.20 annually.

I bought 10 shares of CNR at a purchase price of C$105.30 for a total cost of C$1,062.95. My dividend yield is 2.18% on these shares. Based on the quarterly dividend of C$0.575 per share, I should see C$5.75 quarterly or C$23.00 annually.

I added to my MSFT position with 7 shares at U$159.46 apiece for a total cost of U$1,126.14. My dividend yield is 1.28% for these shares. On the quarterly dividend of U$0.51, these shares should kick off U$3.57 quarterly or U$14.28.

I purchased a single share of Alphabet Inc. (GOOGL) for U$1,274.86; it pays no dividend and so it falls outside of my usual wheelhouse for investments which is typically based around receiving cash flow. Nevertheless, I made an exception as I believe GOOGL has plenty of future growth ahead of it based on the scaling up of cloud computing in the decades to come.

All in, this comes to C$8,231.05 and U$2,400.98 in purchases, or $10,632.03 in currency-neutral terms.

Cash

I currently have a special rate of 3.00% with my online bank until the end of May. This is a great offer, but as noted above, my cash levels have continued to deplete as I’ve striven to take advantage of what I believe to be mispricing opportunities afforded by the recent turmoil.

So long as the market is low and stays low, my goal will be to continue buying stocks rather than stockpiling cash.

COVID-19

Given its importance at the moment on market prices based on the economic toll we are experiencing related to COVID-19, I feel it is worth taking a moment to outline my thoughts.

This disease spreads easily and has resulted in a large and rising number of deaths worldwide. However, it is worth noting that the lockdowns being experienced are not based solely on the mortality rates. Rather, much of these preventative measures are being taken with respect to the burden this might otherwise place on the healthcare system. In other words, the decision to implement social distancing and self-isolations is as much a public resourcing issue as it is concern for the health and well-being for individuals who get sick.

The reality is that at some point this thing will pass, but until then there will continue to be an incredible amount of fear of the contagion that is leading to entire countries to effectively be placed on lockdown. That will most certainly have crippling economic consequences based on decreased consumer spending. This is going to sting in the near term. The stock market will keep bouncing around and may well find itself much lower than it already is.

When COVID-19 has run its course, though, I believe the most likely scenario is that people will go about their lives just as they have in the past. Businesses will make products and consumers will buy them. Children will go to school. Parents will go to work and save to take those same children to theme parks and sporting events and all the rest. We’ll keep going to the grocery store and life will be just fine.

Making knee-jerk reactions in the short-term is one of the surest ways to get fleeced of your hard-earned investment dollars. It is of paramount importance to have a durable strategy that can work in any market conditions. Don’t try to guess when the bottom of the market will happen—nobody has that foresight (and be incredibly cautious of anyone who tells you they know what the future holds). Again, have a strategy and simply follow through on it without letting fear get the best of you.

Conclusion

This has been the busiest period I’ve experienced in the stock market. It has been wonderful to finally feel there are real opportunities to deploy cash that has been gathering dust on the shelf. Getting over $10k invested so rapidly should yield plenty of fruit (dividends) throughout the year and beyond.

The strategy is simple: Invest in high quality dividend paying companies, reinvest the dividends, and win the game.

The hardest part of investing isn’t the actual investing itself. The challenge is to control one’s emotions both on the upswing and the downswing. Don’t feel too exuberant when prices rise and don’t get depressed when they inevitably hit a bump—albeit this is more like a crater—along the road. The ups and downs are part of the process. I happen to believe the best companies out there will be doing more business ten years from now than they are today, and based on my faith in that, I persist.

Full Disclosure: Long REI.UN, KO, JNJ, CSW.B, FTS, CU, CNR, H, CSH.UN, BEP, BAM.A, BIP.UN, AW.UN, ENB, WM, MCD, YUM, YUMC, V, MSFT, and TD