Looks like we’ve done a lot of things this past week. I wanted to add a bit about my portfolio this week as well as talk about a few things that happened on the platform that are worth mentioning if you are looking into investing with M1. As you can see, my portfolio is a lot closer to being close to that smooth dotted line that indicates if a sector has more than its allocation or less. Right now Health Care (JNJ right now) has a bit more because I lowered the sector to make room for some other sectors.
First of all, if you haven’t checked out Joseph Carlson on YouTube and at JosephCarlsonShow.com, he is a great person to watch, to take ideas from and to get a bit more news as well as backing up the whys of the portfolio and the whys of picking certain stocks. It is a great place to find a few stocks. I have taken a handful of picks from him but catered them to my portfolio size.
The two things I want to hit in this article:
- Transferring from something like Stash with a small portfolio balance
- More buys on M1 and how I changed up the porfolio/but also didn’t do any hard work
- Upcoming Dividends
Transferring from Stash
So after a week of trading with M1 Finance with my Roth IRA, I decided that I liked it a lot better than my current situation with Stash. Yes, Stash is great and it has fractional shares and I can see what percentage of my portfolio each stock is, I can auto invest, but I didn’t feel the same control on what I had chosen there and the $1 monthly fee for a portfolio my size just felt like I was paying a lot of having less than $1,000 in there. In essence, I was pay $12 a year to take care of $800 which is an expense ratio of 1.5%. That is a lot of management fees.
With that money in M1, I have no fees and I have a bit more control over the make up of my portfolio instead of the “idea” ETFs that were really the only thing when I started my Stash. Plus, when I get dividends now, it will automatically invest those in the items that have lost a bit of value, therefore giving me my same stock (and for that matter, the same amount of dividends) at this lower price than paying to get that same dividend for a higher price. That is a great deal.
Now I will say something I was hesitant about. When I sent my information to the transfer team at M1, they told me that specific to my situation with just so relatively little in my account, that it would be more beneficial to me to just sell my positions/stocks in Stash, deal with the few sale tax items at the end of the year and then just pull the money out, and put it into M1. I thought that was really cool of them and I definitely felt like they are very personalized and are trying to get you the best value for your loyalty.
So with the $1,000 that I got, I rewarded myself a little bit. I had contributed about $800 and had gained about $100 (~10% gain) which comes to about $900 coming out of my Stash account. I put half of it towards a car loan that we are still working on, put $100 towards my normal taxable account at M1 to get it started, and then I put the rest into my Roth IRA so I can move that towards the $6,000 limit. I probably won’t reach it, but my thought process is that I am limited to that amount for the Roth IRA which is tax free growth while the other is taxed on any gains I realize (or get paid for.)
So with that extra ~$275, I added a few companies that I think are strong companies and the rest went towards rebalancing my portfolio to get it closer to those even percentages.
These are the purchases it made: (12)
Waste Management (WM): $114.37
Costco (COST): $114.37
Vanguard REIT Fund (VNQ): $15.47
SP500 High Div/Low Volatility (SPHD): $11.16
Corporate Bonds (LQD): $6.25
Vanguard International Bonds (BNDX): $4.74
Simon Property Group (SPG): $3.09
AT&T (T): $2.39
Treasury Bonds (SHY): $1.13
Annaly Reality (NLY): $0.96
New Residential Investment Corp (NRZ): $0.66
Verizon Communications Inc (VZ): $0.50
That is pretty cool. and what happens is that it works to balance my overall sectors. If Real Estate is at 30% and it’s supposed to be at 25%, it’s not putting money there until after it bumps up other things. If Telecom is at 5% and it is supposed to be at 10%, then it will put some in there. How much it puts there depends on if other items drop in value or if I allocated them higher in between.
Seeing the next dividend or seeing what dividends I am expect to earn and which ones I am to be paid in the next month is something that M1 Finance has talked about implementing.
But for now, I just have a spread sheet of the different companies that I have and roughly when they will pay their dividends throughout the year. This lets me know what dividends will be earned in the next months. It is really rough but it is a work in progress.
For now, I can see that I have one more dividend to earn from JNJ in November.
In December I have 9:
I haven’t done out the math yet mainly because some of these haven’t announced how much they will be paying out, but I think I will be upwards around that $10 mark for December in dividends. Although, these are the just the dates that I have to have the stock. The date they get paid out could be anywhere from 1 week to 4 or 6 weeks. I think by the end of 2020, I want to be at the point where a set of dividends in a day will put in enough that it will get reinvested automatically without me helping it with my paycheck each pay period.
Anyways, that’s a start. If you have questions about what these stocks are, one of the best places that I’ve gone to for information is seekingalpha.com. The website is free to use. If you set up an account, which is free and I’m not like sponsoring it for money, you can set a watchlist of stocks. I’ve really liked it. I really don’t know much about other places like Yahoo Finance but besides a specific list of my next dividends, it seems to have everything I am looking for.
Feel free to reach out @youngbudgeteer on Twitter or comment below. What is your goal with all of this? Do you like the idea of investing? Do you just want something easy and does a pretty good job without work? Let me know and have a great weekend!