Tech stocks have weighed so heavily on the market in 2022, there is a strange disconnect between the Dow Jones industrial average, the S&P 500, average, and the NASDAQ index.
– Dow Jones -5% YTD
– S&P 500 -15% YTD
– NASDAQ -27%
I am guessing we have not seen a split like this since the ‘dot-com boom’ busted in the year 2000.
Statistics show that December is the month most likely for the stock market to be up. Almost 78% of the time there is a “Santa Claus Rally”.
Given how poor the financial markets have done this year, I am thinking there will be a fair amount of people selling assets to book losses for tax purposes. We met with our financial advisor on the phone yesterday and sold a few things.
What moves are you making with your portfolio before the end of the year?
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MrFireStation 
Our portfolio is nestled down for a long winter’s nap. Our long-term goals and strategies remain constant. This year’s volatility keeps on churning, but our eyes remain fixed on our compass & destination. Goodbye, 2022 — a year many won’t miss. Hello, 2023 — may you bring peace, prosperity, health and abundant opportunity for growth.
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2023 – “peace, prosperity, health and abundant opportunity for growth”. Those are 4 things we can all hope & pray for next year!
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Monthly, I look for opportunities to trade lowering yielding and slower growing dividend stocks for higher yield and growth to crank up my annual income.
As an example how this works, I bought oil majors when Slo Joe was inaugurated because of his aggressive actions to get the country off fossil fuel. You could pick up companies like XOM and CVX with current yields that were in 6% plus range. These companies were very unpopular at the time and sported dividend yields that were over 50% higher than their 5 year average. They are more popular now due to their record profits and the yields are now down in the mid 3% range and paying less than their 5 year average.
I switched into a hospital REIT which had been irrationally punished because one of its tenants declared bankruptcy. The REIT has experience with these situations and they still get paid, so I was able to trade into stock that had a much higher current yield that is quite a bit higher than its five year average.
My turkey of the year award went to Disney. I have held their shares for around 15 years and done well. During the commencement of the Covid lockdowns in Q1 2020, they suspended paying their dividend. They haven’t reinstated their dividend or provided guidance on when they will. Their woke movies are not doing well. So I sold my shares and traded into a basket of stable stocks that pay nice, growing dividends.
I am planning to look in early January for stocks that may have gotten thrown away because of tax loss harvesting and meet my criteria of decent current yield, are growing, and have a high likelihood of continuing to do so.
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Oil companies certainly had a spectacular year. I’m guessing your dividend-focus also kept you away from the big tech stocks that busted this year. What is your take on Iger back at Disney?
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You are right about tech stocks. I only own one right now. Microsoft which I bought during the 2008 market downturn, when it was paying a 4.5% dividend. At the time, they were seen as an also run tech company and had taken a hit to their earnings when they switched from selling packaged software to subscription based software. Office 365 and its adjunct products have been a runaway success. It is sitting in a taxable brokerage account, so I have not sold it to avoid paying capital gains.
From my reading, woke Disney started during Iger’s previous time as CEO. A small, but very vocal segment of Disney is pushing their LBGTQ agenda into movies. Chapek didn’t rein them in. I don’t think Iger will either. People with traditional values are not screamers. We simply walk out of businesses never to return and there are a lot more of us.
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I’m one of the sheep that pay Microsoft 365 every month and rarely use it. It’s wrapped into the WordPress account that this site is published on!
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There is a lot of value in Office 365 subscription product. I like Teams better than the alternatives right now for virtual meetings. Having the suite of Office Products is nice. I recently switched my cell phone’s SMS Message App to the Office 365 variant as an attempt to do away with excessive SMS (phishing) and you know what, it killed them dead.
I recommend that the next time you think you need new software to do whatever, you take a look at the Office 365 Software Suite you are already paying for. You might find they offer something that fits your needs for no additional cost.
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I guess I do use the Microsoft Teams part of Office 365. Both boards I’m currently involved in use it for remote meetings. I was on it for 3 hours this morning!
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I’m wondering if I should loose my car or not. I spend about $400-500 per month, I’ve had it for almost 3 years and don’t even have 7K miles on it yet. Do I really need to spend that much just to drive to the park and grocery store? The race car drivers on the freeways are a total pain in the arse and supposedly I should have a gun in the dash in case of car jackers — no one has yet stolen my cat converter, but I did have my plates stolen a while back. City life is changing I guess.
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I’m surprised it costs you that much. Is it a lease? What is your alternative – friends, or Uber? That would be better financially, but awfully inconvenient. If you are worried about crime, I’d stay away from public transportation of any kind.
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when you add up a monthly payment, insurance, taxes, gas, maintenance, parking — cars are about $400 a month minimum — I only paid for 1/2 of my car, so I still owe a little bit on it.
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Yeah – for a new car that seems right. Our son’s thinking about a different vehicle, but his current late-model car is pretty cheap to own / operate.
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Buy him a subaru forester for x-mas :), well, Land Rover’s are better!
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I’m not buying him any vehicle!
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Sounds like you need a change in more than whether you own a vehicle or not. Latitude Margaritaville is calling. Warmer climate, better safety, and you can drive a golf car or walk to most places you need to go.
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I gave up guessing the stock market a long time ago. I’m now a simple long term index investor and real estate investor, so I won’t do anything but rebalance my equity/bond ratio the first week of January like I always do. I am hoping 2023 may initiate some opportunities with a new real estate cycle. Prices have been extremely high for a few years now, so I’m cautiously looking toward a shift given our crazy economy, government spending frenzies, and potential poor overall outlook. I am expecting real estate to become more attractive to acquire again. None of us really knows anything for sure. But it feels eerily similar to 2007 from a real estate standpoint. If it goes on sale, I’ll certainly ready to jump and buy more. It has certainly been my most productive asset over the long haul.
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How did your big rent increases at the start of 2022 play out, Thom? Do you have to repeat them for 2023? The Fed says they are trying to put a dent in home prices, but I haven’t seen values “go on sale” yet. Only a slight dip from the sky-high record prices in the national FRED data.
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Our rental increases back in January of 2022 went as expected. We tried to match our increased market rates at that time, and did so…temporarily. Like many commodities, our market rents continued to increase throughout 2022. We are unlikely to raise existing leases again in January of 2023 after just raising them in 2022, so we may be slightly below our market average for existing leases for the coming year. We continuously adjust for new leases, and will continue to do so in 2023 to maintain market rates with new tenants. So it goes with rentals…
While I hate to see inflation like everyone else, this investment class has withstood inflation pressures better than any other investment class during my investing career. Rental increases not only keep up with external market pressures, but those rent increases drive the appreciation value of the property over the long haul. While our stock investments were down roughly $325k this year, our real estate investments appreciated roughly $400k due strictly to those rental increases, all while also producing a solid cashflow of approximately 9% on the year for income generation. That is the compounding beauty of real estate. There are five opportunities to generate wealth (in any market condition): cash flow from rental income, property appreciation, incredible tax deductions, leverage pay down, and forced appreciation through capital improvements. The past year certainly hit on all five areas for us.
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I’m not excited to do our taxes this winter, but I am excited to see the numbers on our 2022 townhouse rental property that our son lives in. Our rent bank account keeps going up and I know we didn’t pay top-dollar in our purchase price. I’m waiting to see how it works with our taxes.
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You are right about people looking to sell for tax losses, I’m thinking that may be one of the reasons there was so much downward pressure the last two trading sessions. Maybe this week we’ll have a little SC Rally, lets hope. Happy Holidays!
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🎅🏻 Let’s go Santa Claus Rally!
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