February 2022 – War in Europe

This is this second entry in my newly launched investment journal where I share my portfolio performance, moves, thoughts, and dividend history. The stock market continues its volatility amidst uncertainty and fear – and while the situation created by the Russian invasion of Ukraine has had an impact on my portfolio – it has not changed my strategy.

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Changes to my portfolio this month

With absolutely no exposure to Russian markets, I cannot argue that my portfolio has been negatively impacted by the world reacting to this recent tragedy. At the same time, I am not the kind of investor being rewarded: Betting against the world relying on fossil fuels like oil and gas and with no exposure to weapons manufacturing or raw materials either.

Growth Portfolio

Overview
Unlabeled on the chart from left to right: Unity (2.4%), Xiaomi (1.14%) and Coinbase (0.2%).
Moves
  • On February 28th I purchased a small chunk of Xiaomi (HK1810) stock at a price of 14.56 HKD per share bringing down my average purchase price to 23.72 HKD from 24.20.
Performance
February continues this year’s downtrend in my growth portfolio – down 4,97% this month.
The index I benchmark against is OMXC25.

Dividend Portfolio

Overview
Unlabeled on the Chart: Orion Office REIT (0,4%).
Moves
  • A small automatic buy order of the Danish Invest Denmark Index ETF went through on the 8th – Which I aim to continue doing every month this year.
Performance
My dividend portfolio also slightly underperforms the market down 1.34% for the month.
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Dividend overview

Name (Ticker)ReceivedAmount (USD)
AT&T (T)Feb 2nd$31.29
Denmark Index ETF (DKIDKIX)Feb 11th$431.32
AbbVie (ABBV)Feb 16th$46.30
Realty Income (O)Feb 16th$13,49
TotalFeb 2022$522.4
Comparison + total increase$210.93 $311.47
Dividends received before taxes. Comparison to the same month a year prior.

Commentary & Review

In this section, I aim to explain my actions and articulate my reasons, as well as reflect on the market in general, my performance, or anything else noteworthy. Some months I may be briefer than others – It depends entirely on what has been going on and what I find relevant to share.

Geopolitical tension reaches far and wide

Even though the war is taking place in Europe its impact can be felt the world around. I mentioned prior that I have no direct exposure to the conflict financially, however one stock I own that has suffered directly because of the crisis is Taiwan Semiconductor Manufacturing Company (TSM). The biggest risk facing this company has always been geopolitical. China still refuses to recognize Taiwan’s sovereignty and so a Russian invasion has reminded investors of the risk of China doing the same in Taiwan. In my optics, TSMC’s importance to the world serves as a shield against this very scenario, as it would have massive implications. With their near-monopolistic status for one of the world’s most important industries – semiconductor manufacturing – I believe it is safe to say China would receive similar backlash or worse to what Russia is going through right now if they ever were to make such a decision.

TSMC acting as a so-called ‘Silicon Shield’ is not a new thought nor one that I alone support – a book was published about the topic as far back as 2001 – 6 years prior to the release of the iPhone, all of which have a TSMC-built chip inside.

Nonetheless, the stock is down more than 10% this month – even after reaching an all-time high in early January following great earnings and future outlook. If you have read some of my earlier entries on this long-term opportunity, now might be a good place to jump in if you have not already. I certainly would not be afraid to add more – although I think the 5% this stock makes up of my portfolio currently sits just right for being one of my newest positions, having spent 2020 and 2021 building it. In other news, my current darling Unity (U) delivered great earnings as well increasing their expectations of growth in the short term. This is still the position I am working the hardest on adding to right now, but this month I opted to put what little I had extra towards lowering my average purchase price of Xiaomi because the brokerage I use to trade this stock does not take a commission. Coinbase (COIN) also again delivered incredible numbers – yet the market still does not seem to take notice.

Snippet from CNBC’s analysis of Coinbase Q4 earnings showcasing massive reported numbers vs. expectations. The stock fell in reaction and on the earnings call, CEO Brian Armstrong even expressed his confusion and surprise at the levels the stock is currently trading at.

Dividends

This month I saw my highest ever dividend payout – expectedly so as the only ETF, I hold payout their yearly dividend in February. I consistently contribute a small sum every month to this ETF, meaning that it has grown to around twice the size it was at the same time last year. However, the yield is not as consistent as with the individual Dividend Aristocrats/Kings I hold and this year it was even slightly higher than prior years at a whopping 13.2%. It is really nice to experience that dividends are starting to make a noticeable contribution to my monthly income (as a University student with a part-time job). As always though, none of it will be spent on living expenses but instead reinvested – and with this nice chunk of money, I am now a little closer to opening a new position in my dividend portfolio sometime this year. It is also likely that this will be one of the last times I receive a dividend from AT&T at all as I have now finally made up my mind and plan to exit that position entirely before the Warner/Discovery deal goes through and the dividend is to be cut in half. This sale will make up the other half of that eventual new position.

Research & Goals

To be honest, most of my time this month has been spent following the war that has unfolded in the continent I live in. An attack on democracy and the sovereignty of a country so vile that it has brought the whole world together in unison to support them. I have been pleased to see my own country stepping up, sending supplies as well as Elon Musk helping Ukraine stay online with Starlink. With the time I have had left to think about future investments, I have been mostly focused on narrowing down what to go with for my next dividend position. It has proved a challenge in this constantly changing landscape and volatile market and I still have not settled on one stock in particular. Costco (COST) is still the number one dividend stock I would prefer to own, but not at its current valuation. E.ON (EOAN) has also seen its price hike as Germany committed to lowering its energy reliance on Russia in the future.

Watch List

Growth Portfolio
Name (Ticker)Conviction (Rank)Time on list
Alphabet (GOOGL)1 ┅3 years
Shopify (SHOP)2 ┅6 months
Sea (SE)3 ┅1 year
Meta (FB)4 ┅3 months
Embracer (EMBRAC B))5 ┅6 months
Palantir (PLTR)Contender ┅1 year
Note that many of these may already trade within desirable price ranges for me but may overlap with current holdings with higher conviction or are simply on hold due to a lack of funds.
Dividend Portfolio
Name (Ticker)Conviction (Rank)Time on list
Costco (COST)1 ┅6 months
E.ON (EOAN)2 ┅3 months
Starbucks (SBUX)3 ↑New
Bank of Nova Scotia (BNS)4 ┅New
Digital Realty (DLR)5 1 year
Lockheed Martin (LMT)Contender New
Note that many of these may already trade within desirable price ranges for me but may overlap with current holdings with higher conviction or are simply on hold due to a lack of funds.

My Watch List is largely unchanged from last month, although for my Dividend Portfolio potential buys, Starbucks (SBUX) has moved up from being merely a contender last month to landing in the third spot. In February they have reached a 52-week low despite reporting strong revenue numbers still as well as communicating the ability to raise prices to keep up with inflation. They jumped above Bank of Nova Scotia (BNS) even as their yield is still much lower and Lockheed Martin (LMT) jumped down as they stand to benefit from the conflict in Ukraine. Something that has made me reevaluate whether or not I would really like to own part of a company like that – that though strategically makes sense as a hedge against times like these, does not feel quite right to me. For a much less dire reason, Digital Realty (DLR) has also jumped down a few spots as I have reflected upon the way I want to diversify – and while it may eventually find its way into my dividend portfolio someday I am already exposed to the data center category through Nvidia (NVDA) in my growth portfolio.

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Goals

  • Short term I wish to continue to increase my position in Unity, then Xiaomi and possibly Coinbase also.
  • For the year 2022 while generally focusing more on growth stocks than in the year prior I still aim to start at least one new position in my dividend portfolio.
  • I have no current plans to open any new positions in my Growth Portfolio, but rather to add to my newest additions.
  • I still plan on selling a little more Tesla stock in order to maximize profit taking at a lower tax bracket.
  • In my 2021 year in review I stated that I aim for a 35% return in 2022. I continue to strive towards this goal, but with another negative month here in the beginning of the year, chances are slim.
  • Over the long term my goal is to slowly shift towards more stable positions and dividends towards my journey of financial freedom.

Disclaimer: I am not a financial advisor, the opinions expressed in this article are entirely my own – always invest at your own risk.

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