Monthly report: October 2024

Global Market Performance in October 2024

October brought varied results across major global indices, reflecting an uncertain but cautiously optimistic month for investors:

• AEXGR: The Dutch AEX Gross Return Index decreased by 1.5%, slipping from €3,557 to €3,502. This was driven by continued challenges in the European economy, including high inflation and slower-than-expected growth.
• IWDA: The iShares MSCI World Index (IWDA) recorded a solid gain of 2.9%, rising from €97 to €99, indicating resilient performance across global markets.
• DJITR: The Dow Jones Industrial Total Return Index (DJITR) inched up 0.6%, moving from $105,104 to $105,734. Steady performance from large-cap U.S. companies helped support this increase.
• S&P 500: The S&P 500 index showed stronger growth at 1.7%, rising from $5,709 to $5,808. Positive earnings reports from the tech and healthcare sectors, as well as resilient consumer spending, contributed to the index’s gains.

Overall, U.S. and global markets demonstrated cautious optimism, while European markets continued to face headwinds. This backdrop influenced individual stock performances within my portfolio, where some companies experienced gains while others declined.

Top 3 Gainers in My Portfolio

• KMI (Kinder Morgan): +10%
  Kinder Morgan’s stock was a top performer in my portfolio this month, likely benefiting from rising natural gas demand and steady dividend payouts, which bolstered investor confidence.
• APD (Air Products and Chemicals): +9%
  APD saw a significant increase in October, possibly due to its strong earnings in industrial gas and chemicals, which remain critical across sectors such as healthcare and energy.
• PM (Philip Morris International): +8%
  Philip Morris reported strong results, with its transition toward smoke-free products capturing market attention. The company’s high dividend yield continues to attract income-focused investors.

Top 3 Losers in My Portfolio

• AOS (A. O. Smith Corporation): -14%
  AOS experienced a double-digit drop, perhaps due to concerns over the housing and construction sectors. Rising interest rates are impacting housing demand, which directly affects AOS’s water heating products.
• ASML (ASML Holding): -10%
  ASML faced headwinds due to concerns over semiconductor demand and potential slowdowns in tech spending. Although ASML is a tech leader, the current economic uncertainties weighed on its stock price.
• BHP (BHP Group): -10%
  BHP, a major mining company, also faced a tough month. Falling commodity prices and fears of an economic slowdown impacted investor sentiment, leading to a drop in its stock price.

October 2024 Dividend Income: A Year-Over-Year Comparison

Examining my dividend income for October 2024 in comparison to last year reveals some interesting trends:

In October 2024, my U.S. dollar-denominated dividends grew slightly from $217 in October 2023 to $222, an increase of 2.3%. Noteworthy contributors included HASI (Hannon Armstrong) with a 5.1% increase, MRK (Merck & Co.) with 5.5%, and O (Realty Income), which provided a substantial 37.2% growth in dividend income, due to an additional purchase last year. These companies demonstrated stability in both payouts and growth, enhancing my overall income. ADP was a new dividend payer with a first payment of $11. MPW was a dissonant because of its dividend cut last quarter. We'll see how things develop in the coming months. Finally I sold my shares in BAX earlier this year so this will be a slight drag in the coming period. 

Despite the minor uptick in USD dividends, the after-tax total dividend income in October 2024 slightly decreased by 1.0%, from €175 to €173 after factoring in currency exchange fluctuations. 

Closing Thoughts: The Long View on Dividend Investing

October’s market performance and my portfolio’s dividend income are reminders of the importance of long-term thinking. Markets fluctuate and individual stocks can experience setbacks, but a diversified dividend growth portfolio can offer steady, compounding income over time.

As Benjamin Graham wisely put it:

"The individual investor should act consistently as an investor and not as a speculator.”

My focus remains on high-quality companies with reliable dividends, reinvesting income, and maintaining a balanced portfolio that can withstand market ups and downs. Each dividend payment brings me a step closer to financial independence, reinforcing the power of disciplined investing.