Well, we just completed the first trading week of 2021.  I can’t say I was itching to make some purchases, but I did execute some trades, and I’m happy to keep my Portfolio growing.  Not to mention, I’m happy to share with you what I ended up buying.

I ended up making small additions to 3 existing Portfolio positions.  How small?  All were single-digit share purchases, and no investment was more than $400.  That qualifies as small, right?

In addition, each stock was part of my bottom 10 when it comes to Portfolio value.  Even after the additions, they remain bottom 10 positions, but I’ll keep trying to add when/where I can.

The stocks come from 3 different sectors – Healthcare, Information Technology, and REITs.

Of course, with my additions comes some new forward dividend income for my Portfolio, so I’ll cover that as well.

No more delay!  Here are the details for my first Portfolio transactions in 2021…  all buys, too!

 

Merck & Co. (MRK)

I only initiated a position in this pharmaceutical company about 1 month ago.  It was a 5-share purchase at $82.90/sh., just to get things started.  The position started as the smallest in my Portfolio, by far.

I mentioned that I was going to be looking to grow this position, and that I’d be looking to add more under $80.

As it turned out, MRK dropped below my $80 target on the 2nd trading day of the year, so I took action.

On 1/5/21, I doubled down and bought another 5 shares of MRK at $79.96/sh, for a total of $399.80.  The stock yielded 3.25% at my purchase price (almost a full percentage point above my current Portfolio average of 2.37%).

My MRK share total has now risen to an even 10 shares, lowering my cost basis to $81.43/sh.

The purchase resulted in the addition of $13.00 in annual forward dividend income.  My first income bump of the new year… I love it!

Even with this purchase, my MRK position remains my smallest (50th out of 50)… still trailing my Amgen (AMGN) position by a decent amount.  I’d have to add another 8 shares to my MRK position for it to no longer be my smallest position.

I’ll definitely keep adding MRK below $80/sh.  We’ll see if the price stays down here long enough to allow me to accumulate shares over the next few months.

 

Microsoft (MSFT)

Over the past year, I’ve been trying to increase the weighting of Information Technology holdings in my Portfolio (and this desire hasn’t changed).  MSFT has been high on my list of tech names to add over that time.

I was lucky enough to initiate a position in MSFT during the stock market decline last March, purchasing 10 shares at $137.565/sh.  I viewed my initial purchase as establishing a starter position, with the hopes that I’d continue to increase my share count over the coming months.

However, I haven’t added to my MSFT since that initial purchase last March due to the fact that the stock recovered quickly and resumed what appears to be its ‘overvalued’ status.

That status makes it more difficult for me (emotionally) to commit more capital all at once.  I needed a different plan.

Coming into 2021, I’d been mentioning in previous posts that I might build out my MSFT position by purchasing a share at a time over each of the months of the year.  If I followed this plan, I’ll have more than doubled by MSFT position, giving the stock a somewhat more prominent position in my Portfolio.

Investing in smaller chunks should take some of the emotion out of the purchases.  So, in my attempt to set this plan in motion, I added a share of MSFT.

On 1/6/21, I purchased that 1 share of MSFT at $213.50/sh, for an expected total of $213.50.  The stock yielded 1.05% at my purchase price (less than half my current Portfolio yield).

My MSFT share total rose to 11.077 shares, and my cost basis popped up to $144.89/sh.

Due to MSFT’s low yield, this purchase resulted in the addition of only $2.24 in annual forward dividend income.  Not huge, but it adds to my total!

My MSFT position is still part of my bottom 5 when it comes to Portfolio value (46th out of 50).  It rests below Omega Healthcare Investors (OHI) and above Sysco (SYY).

If I stick to the 1 share/mo. plan for the entire year, my MSFT position could grow to 40th.  We’ll see if I stick to the plan… but at least I’ve gotten started.

 

Realty Income (O)

Lastly, I’ve added to my O position.  I’ve been successful at adding and trimming this particular stock over the past few years.

I’ve been able to enhance my return with my O trades, but in general, trading in and out of stocks is not something I’m looking to do.

The last time I sold O was almost a year ago, in Q1 of 2020.  In fact, I sold O three times in that quarter…

• sold 25 shares on 1/21/20 @ $77.00
• sold 15 shares on 2/25/20 @ $81.07
• sold 15 shares on 3/4/20 @ $77.00

With the January 2020 sale, I was in the middle of trimming the REIT weighting in my Portfolio.  The other two lots were sold after the market started reacting to news of the pandemic.

At the beginning of the market decline, I recall that my REITs were holding up rather well compared to the rest of the market.  That didn’t last, but given that my REIT prices seemed resilient while other stocks declined, I continued with my REIT trimming and used the proceeds to start new Portfolio positions in stocks that were rapidly declining and which I’d been wanting to establish a position in.

In any case, the price of O is much lower today than it was when I last sold.  So, I decided to buy back a fraction of those shares and boost my dividend income again.

On 1/6/21, I purchased 5 shares of O at $59.50/sh, for a total of $297.50.  The stock yielded 4.73% at my purchase price (just about double my current Portfolio yield).

My O share total has now climbed back to 78.134 shares, and my cost basis has ticked up to $51.81/sh.

This purchase resulted in the addition of $14.07 in annual forward dividend income.  Since O is a monthly dividend payer, I can expect to see an extra $1.17 in dividends per month.

O remains my largest REIT holding, but overall O is only the 41st position of 50 when it comes to my Portfolio value.  My O position trails Altria Group (MO), but leads The Walt Disney Co. (DIS).

If O drifts lower into the mid $50s, I wouldn’t hesitate to add a similarly sized lot.

 

Summary

I kicked off my 2021 transactions with small additions to 3 existing Portfolio positions.  These 3 positions not only got a bit larger but they boosted my forward dividend income, too.  And who doesn’t want to see that!

The 3 purchases were all single-digit share adds.  In total, I put $910.80 of new capital to work in my Portfolio, with MRK getting the most, followed by O, and then MSFT.

My annual forward dividend income increased by $29.31.  The 2021 snowball has started rolling!

Since all 3 purchases were additions to existing positions, the number of stocks in my Portfolio stayed at 50.

I look forward to many more additions over the course of the year.  I’ll be back to share them with you as they occur.

 

Were you able to add to your portfolio in week 1 of 2021?  If so, what did you buy?  Did you establish a new portfolio position?  Or build up an existing one?  Please share in the comments!