Monthly report: August 2024

As August comes to a close, it’s time to reflect on how the markets performed, review the biggest movers in my portfolio, and assess the progress of my dividend income. Let’s break down the numbers and explore what they mean for the future.

Market Performance: August 2024 Overview

August was a generally positive month for equities, as reflected in Table 1. The S&P 500, a critical benchmark for U.S. stocks, rose by 3.7%, closing at $5,648. This gain suggests continued confidence in the U.S. economy, supported by robust corporate earnings and stable consumer demand. The Dow Jones Industrial Total Return Index (DJITR) also experienced a solid increase of 2.7%, finishing at $102,882. This performance indicates strength in large-cap stocks, particularly in sectors like industrials and healthcare, which are often key components of dividend portfolios.

Meanwhile, European markets showed resilience, with the AEXGR index rising by 2.4%. Despite facing economic challenges, such as persistent inflation and energy concerns, European equities managed to post respectable gains. The IWDA index, which tracks global equities, recorded a modest 1.0% increase, highlighting a more cautious approach by investors in international markets.

Portfolio Highlights: Biggest Gainers and Losers

In my portfolio, several stocks stood out for their notable price movements in August. 

Top 3 Gainers:

• Texas Instruments (TXN): +11%
  Texas Instruments was the top performer in my portfolio, gaining 11% in August. The company benefited from strong demand in the semiconductor industry, which continues to see robust growth driven by advancements in technology and increased chip usage across various sectors.
  
  
• Walmart (WMT): +11%.
  Walmart also saw an 11% increase, reflecting its solid earnings and strong consumer demand, particularly in the grocery and e-commerce segments. As a defensive stock, Walmart continues to perform well in both stable and uncertain economic environments.
  
  
• Medtronic (MDT): +10%
  Medtronic gained 10%, driven by positive developments in its medical devices segment. The company’s innovations in healthcare technology have positioned it well for growth, making it a reliable dividend payer in my portfolio.

Top 3 Losers:

• Shell: -4%
  Shell was the biggest loser in my portfolio, with a 4% decline. The drop is likely due to fluctuating oil prices and concerns over the long-term viability of fossil fuels in the face of growing renewable energy adoption.
  
  
• Air Products and Chemicals (APD): -3%
  APD fell by 3%, potentially due to market concerns about higher energy costs impacting its profitability. Despite this short-term decline, the company remains a strong player in the industrial gases sector.
  
  
• Medical Properties Trust (MPW): -3%
  MPW also saw a 3% decline, reflecting ongoing challenges in the healthcare REIT sector, including regulatory pressures and market uncertainties affecting its hospital-based portfolio.

Dividend Income: August 2024 vs. August 2023

My dividend income continues to show positive growth. In August 2024, my after-tax dividend income increased by 9.6% compared to August 2023, rising from €170 to €187. This growth is largely due to purchases in key holdings such as Realty Income (here and here), which more than doubled its payout, and other companies that steadily raised their dividends throughout the year.

Looking at 2024 year-to-date, my monthly dividend income has consistently outpaced the previous year. This steady increase is a testament to the power of dividend growth investing, where reinvesting dividends and holding companies with strong track records of dividend increases leads to compounding income over time. As of August 2024, my cumulative dividend income is significantly higher compared to the same period in 2023, reflecting both the impact of dividend raises and the benefits of reinvestment.

Final Thoughts

As we look ahead to September, it's important to stay focused on long-term goals, especially in the face of market volatility. Remember the wise words of Warren Buffett: "The stock market is designed to transfer money from the Active to the Patient." Dividend investing is a long game, and those who stay patient, reinvest their dividends, and focus on high-quality companies are likely to reap the rewards over time.

By continuing to invest in companies that consistently increase their dividends, you are not just growing your income, but also building a more secure financial future. Here’s to staying patient and letting your dividends do the work!