I had a very productive week regarding this blog 💪
Firstly I published a review of 6 Dividends Aristocrats ETF’s and secondly Engineer My Freedom and I released our third Podcast.
Needless to say, but we really enjoy making those podcasts, so if you would like us to answer a question, discuss a certain topic or if you would like to be a guest on our show: just let me know 😎
Having said that, enjoy this week’s 5-Bullet Sunday!
5-Bullet Sunday is a weekly blog post with 5 topics that were on my mind this week related to Financial Independence and Dividend Growth Investing or something that just fed my curiosity. An overview of earlier posts can be found here
🌟 Covid-19 is back
Or was it never gone?
Have a look at the below picture. I really don’t understand why this is so political on the other side of the pond. It’s not the only country in an election year and it’s neither the only country where the economy is important for their people.
Is this really just as simple as the importance of money over people as the American doctrine?
Many EU countries are slowly opening up again and the European Union is currently creating a list of countries which it may block from travelling into the zone. Who would have ever thought that a country like the United States of America would be a real consideration 🤔
Back to investing. I think that the recent spike in cases is the reason for last week’s market volatility. Some states like Texas and Florida started to put restrictions in again, so I do expect that we might see a dip in the market again anytime soon (i.e. -10%).
🌟 H1 Earnings Season
The month is ending and this means the end of the first half of 2020. It definitely was an interesting 6 months and something that I’ve not seen before since I started Dividend Growth Investing.
Having said that, I will monitor my top 5 holdings pretty closely in the upcoming earnings season:
|Company||Portfolio %||H1 Earnings Date|
|Microsoft ($MSFT)||9,12%||most likely 16 July|
|Royal Dutch Shell ($AMS:RDSA)||7,61%||30 July 2020|
|AbbVie ($ABBV)||7,44%||most likely 24 July|
|Koninklijke Ahold ($AMS:AD)||7,44%||5 August 2020|
|Unilever NV ($AMS:UNA)||7,03%||23 July 2020|
They make up a total of 39% in my portfolio, so I better be on top of them. I typically do this by dialling in into their earnings call. I especially like the Q&A sessions in those calls, because they often reveal additional information and it also gives you a feeling for the sentiment at institutional investors.
Don’t expect fireworks though, because the analysts are typically really soft on the CEO as they want to be again invited 3 months later.
Having said that, are you also following the upcoming earnings closely for your top 5 holdings? What are your top 5 holdings?
🌟 Do dividend taxes matter?
That was the poll that I ran this week:
Thanks everyone who participated in the poll and the results are pretty clear. To most of you the taxes do matter!
It was interesting to see some of the comments and I must say that I wholeheartedly agree with Dividend Athlete and Beurswolf, because personally I am also looking at the after-tax yield.
This means that the height of the tax rate itself doesn’t really matter to me, because I treat it as a given and not something that I can influence. I also don’t want to exclude myself from opportunities to purchase great companies just because of the tax rate.
A good example of that is Novartis. The dividend withholding tax in Switzerland is 35%, which is one of the highest in Europe, if not the world. The company currently yields 3,55% pre-tax and therefore 2,3% after tax which is not that far off from Johnson & Johnson after tax (2.45%).
Full disclosure: I have been purchasing Novartis earlier this year at a 4% yield, hence 2.9% after tax.
Now, you might argue that JNJ is a far better dividend growing company, but if you’re looking for geographical diversification and if you want to invest in Europe, then approaching it from an adjusted-yield point of view might make your investment decisions just far less complicated.
And remember, this is the worst case scenario, because depending on where you live, you might also have an opportunity to reclaim some of those taxes depending on the treaty with Switzerland. In my case they’ve agreed on a 15% dividend withholding tax rate. It’s complicated to claim those taxes, but next year I’ll give it a try myself to just figure out how complicated it really is.
🌟 Recommended Read
This time I am just simply recommending a book for the upcoming holidays: Think and Grow Rich.
I have just finished re-reading it myself and again I have taken many new insights and considerations for improvement out of it. It is a classic book and it was published by Napoleon Hill back in 1937.
The book is actually quite simple, yet very powerful. The author has studied the behaviors of 500 of the most wealthy people in the United States and based on that created a “formula” which has a high chance of leading to wealth.
So why do I like this book so much?
Simply said: it strengthens my mindset in being focused and bold in my goals that I want to achieve. The suggestions in this book first feel a bit wishy-washy, but over time it really helped me to build a routine.
It doesn’t only help me in achieving my financial goals, but it has also helped me a lot to perform well at work.
So if it triggered your curiosity and if you decide to read it: just make sure you have a yellow-marker at your disposal 😁
Have you read the book and if so, what are your thoughts about it?
🌟 Recommended Video
This week’s recommended video is a brief interview by CNBC with the CEO from Bayer. They are discussing the 10 billion settlement for their RoundUp product.
I own 100 shares or Bayer, so I’m following this case closely. I also brought up the settlement and my take on it in our recent podcast.
This was it for the week and I hope that you enjoy these posts just as much as I like writing them 🤗
Have a good remainder of the Sunday!
European Dividend Growth Investor
I’m not a certified financial planner/advisor nor a certified financial analyst nor an economist nor a CPA nor an accountant nor a lawyer. I’m not a finance professional through formal education. I’m a person who believes and takes pride in a sense of freedom, satisfaction, fulfillment and empowerment that I get from being financially competent and being conscious managing my personal money. The contents on this blog are for informational and entertainment purposes only and does not constitute financial, accounting, or legal advice. I can’t promise that the information shared on my blog is appropriate for you or anyone else. By reading this blog, you agree to hold me harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information provided on this blog.