M1 Finance Portfolio: Dividend Aristocrats 2020 - Week 19 (February 21st, 2020 - $304.62)

Week 19 - $304.62

The shorter trading week saw dramatic swings, with an initial selloff that occurred on the opening Tuesday, followed by steady growth mid-week before dipping back down on Friday.

Total Report (Since October 11th, 2019)

Positive Performing Sectors
1. Healthcare (+13.51%)
2. Information Technology (+10.28%)
3. Industrials (+6.03%)
4. Consumer Staples (+5.86%)
5. Financials (+5.08%)
6. Materials (+4.40%)
7. Communication Services (+3.55%)
8. Consumer Discretionary (+1.93%)
9. Utilities (+1.80%)

Negative Performing Sectors
10. Real Estate (-2.00%)
11. Energy (-11.91%)

Weekly Report (February 21st, 2020)
 

 Positive Performing Sectors

1. Real Estate (+1.74%)

2. Communication Services (+0.74%)

3. Healthcare (+0.44%)

Negative Performing Sectors

4. Materials (-0.15%)

5. Consumer Discretionary (-0.19%)

6. Industrials (-0.26%)

7. Information Technology (-0.74%)

8. Financials (-1.04%)

9. Energy (-1.14%)

10. Consumer Staples (-1.65%)

11. Utilities (-3.33%)

GICS Sector Performance Ratio - Balanced: From  9:2 (81.82%) to 3:8 (27.27%)

Review

Although there had been some renewed fears on the spread of COVID-19, particularly as the cases of international infected continue to grow, it is only a minor factor to the selloffs that occurred for the week. The economy has been performing positively for over ten years and continues to do so as more positive reports come in, as indicated by the mid-week stock price rise. Despite the international impact the pandemic has accrued to global trade, the United States has stayed relatively isolated from its impact despite the dozen or so reported cases. While there may be some impending dips from mixed investor sentiment, the market will eventually reach new records so long as the economic data remains positive.

Last Week's Update (February 14th, 2020)

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M1 Finance Dividend Aristocrats 2020 Pie: https://m1.finance/quB1JH2k6

M1 Finance Portfolio: Dividend Aristocrats 2020 - Week 18 (February 14th, 2020 - $297.06)

Week 18 - $297.06

Despite the increasing numbers of reported COVID-19 cases and mixed consumer data, businesses in China have resumed and the stock market continues its positive trend for the week.

Total Report (Since October 11th, 2019)
 

Positive Performing Sectors
1. Healthcare (+15.48%)
2. Information Technology (+12.87%)
3. Consumer Staples (+8.60%)
4. Industrials (+7.59%)
5. Utilities (+6.86%)
6. Financials (+6.81%)
7. Materials (+4.80%)
8. Communication Services (+2.45%)
9. Consumer Discretionary (+2.28%)

Negative Performing Sectors
10. Real Estate (-4.21%)
11. Energy (-9.77%)

Weekly Report (February 14th, 2020)

Positive Performing Sectors

1. Consumer Discretionary (+1.50%)
2. Industrials (+1.39%)
3. Utilities (+1.31%)
4. Energy (+1.16%)
5. Materials (+1.12%)
6. Information Technology (+1.07%)
7. Consumer Staples (+0.63%)
8. Healthcare (+0.42%)
9. Financials (+0.23%)

Negative Performing Sectors
10. Communication Services (-0.23%)
11. Real Estate (-0.50%)

GICS Sector Performance Ratio - Balanced: From 10:1 (90.91%) to 9:2 (81.82%)

Review

The stock market performed positively this week despite the growing number of reported COVID-19 cases and its likewise fatalities and the mixed consumer report this week. Chinese businesses resumed operations and the initial scare of economic impact the epidemic may have inflicted has for the most part worn off. It is expected that the economy will continue to positively perform for this year.

That said, it is worrisome that the stock market is continuing to accelerate upwards despite conflicting economic reports. Generally the stock market will deviate from the real economy by some percentage, and that is to be expected. However when this deviation continues in a certain direction for too long, this can result in a valuation bubble. Equity is the main indicator for a stock's market value, even though it is based purely on the average sale price for trades of that stock at a given moment. Its real earnings will be vastly deviated from its selling price. It is impossible for everyone holding the same stock to receive the same equity price if they were sell at the exact same moment, much like a bank run, as the equity is only as valuable as someone else is willing to pay for it. Thus, one should expect a slight correction in the stock price in the next few weeks as stock price drops and investors look to cash in on these gains.

Last Week's Update (February 7th, 2020)

M1 Finance Platform Referral Link: https://m1.finance/UIl_N9XNA_CO

M1 Finance Dividend Aristocrats 2020 Pie: https://m1.finance/quB1JH2k6

M1 Finance Portfolio: Dividend Aristocrats 2020 - Week 17 (February 7th, 2020 - $284.59)

Week 17 - $284.59

The stock market surged dramatically after last two week's losses from fears of the coronavirus, recouping most of the selloffs before dipping slightly back down on Friday.

Total Report (Since October 11th, 2019)

Positive Performing Sectors
1. Healthcare (+13.18%)
2. Information Technology (+11.24%)
3. Consumer Staples (+7.18%)
4. Financials (+6.21%)
5. Industrials (+5.08%)
6. Utilities (+4.56%)
7. Materials (+3.44%)
8. Communication Services (+3.33%)

Negative Performing Sectors
9. Consumer Discretionary (-0.42%)
10. Real Estate (-3.55%)
11. Energy (-11.78%)

Weekly Report (February 7th, 2020)

 

Positive Performing Sectors

1. Communication Services (+3.98%)

2. Financials (+2.98%)

3. Information Technology (+2.93%)

4. Healthcare (+2.81%)

5. Real Estate (+2.35%)

6. Industrials (+2.20%)

7. Energy (+1.79%)

8. Consumer Staples (+1.52%)

9. Materials (+1.32%)

10. Consumer Discretionary (+0.28%)

Negative Performing Sectors

11. Utilities (-1.16%)

GICS Sector Performance Ratio - Balanced: From 2:9 (18.18%) to 10:1 (90.91%)

Review

After two weeks of negative performance from the coronavirus outbreak in China, the stock market rebounded on Monday after positive reports on manufacturing and technology shares soared. Although another positive jobs report came on Friday, a substantial selloff occurred to cash in on gains made for the week, potentially indicating negative sentiment for next week's trading.

These reactions in the stock market clearly indicates how irrational the trading environment can be, and how equity can be dangerous to rely on. As reviewed before, the coronavirus would have similar reactions to other epidemics in the past, and as shown this week, the stock market rebounded after a certain period of selloffs. The impact was merely a setback, and did not severely hamper overall economic growth to warrant the initial losses. Secondly, it is important to understand that the stock market only tracks the trades made for that particular day, regardless of what news has happened. If more people want to sell that day, then the market will slide into the red. If more people want to buy that day, then the market will rise into the green. It is inevitable that stock supply and demand will meet somewhere in the middle to meet trading needs. It is independent of anything else happening in the world, and thus the stock market never truly reflects the actual state of the economy, only the state of the stock market itself.

It is more important to measure if the stock market performance trend is matching that of the economy. They are linked to one another by the simple principle of how investing works. Investments want to see a return. A business can only gain that return if it is growing and profiting. The economy measures the business. The stock market measures the investment. There will be some discrepancies, but they both should be trending the same overall.

The S&P 500 Dividend Aristocrats list has been updated for 2020. 7 new companies have been added:

Consumer Discretionary (1)
Ross Stores (ROST) - Specialty Retail

Industrials (1)
Expeditors International of Washington (EXPD) - Air Freight & Logistics

Materials (2)
Albemarle Corporation (ALB) - Chemicals
Amcor plc (AMCR) - Containers and Packaging

Real Estate (2)
Essex Property Trust (ESS) - Equity REITs
Realty Income (O) - Equity REITs

Utilities (1)
Atmos Energy (ATO) - Gas Utilities

Last Week's Update (January 31st, 2020)

M1 Finance Platform Referral Link: https://m1.finance/UIl_N9XNA_CO

M1 Finance Dividend Aristocrats 2020 Pie: https://m1.finance/quB1JH2k6

M1 Finance Portfolio: Dividend Aristocrats 2020 - Week 16 (January 31st, 2020 - $268.04)

Week 16 - $268.04

The increasing spread of the coronavirus has brought Chinese productivity down in an effort to contain the epidemic and international trade has slowed as a result.

Total Report (Since October 11th, 2019)

Positive Performing Sectors
1. Healthcare (+7.61%)
2. Utilities (+6.58%)
3. Consumer Staples (+5.14%)
4. Information Technology (+4.94%)
5. Industrials (+1.46%)
6. Financials (+1.02%)
7. Communication Services (+0.18%)

Negative Performing Sectors
8. Consumer Discretionary (-1.42%)
9. Materials (-1.64%)
10. Real Estate (-6.99%)
11. Energy (-12.60%)

Weekly Report (January 31st, 2020)

Positive Performing Sectors

1. Financials (+0.98%)

2. Utilities (+0.66%)

Negative Performing Sectors

3. Consumer Staples (-0.42%)

4. Materials (-1.51%)

5. Communication Services (-1.61%)

6. Real Estate (-1.71%)

7. Consumer Discretionary (-1.88%)

8. Healthcare (-2.48%)

9. Information Technology (-2.49%)

10. Industrials (-2.61%)

11. Energy (-3.43%)

GICS Sector Performance Ratio - Balanced: From 3:8 (27.27%) to 2:9 (18.18%)
 

Review

The effects of the coronavirus has dampened the stock market as productivity and trade slows globally as a result of efforts to contain further spread of the virus within China. This economic shutdown has had a profound impact on future earnings for this year. Many businesses rely on China to produce and supply necessary materials for their products at a cheap cost. This is a time-sensitive business, as any slowdown in the production line means the rest of productivity is stalled waiting for the required components. Less products are made, which means less products available to sell, which increases product price, which then discourages consumers from buying said product. It's a revolving wheel of losses. Delays for even a week can hamper revenue, yet this has been going on for nearly half a month. Should China continue to strictly limit production, it should be expected for stocks to drop further. However there is a case to be made that these kinds of slowdowns are temporary, and that the underlying assets of companies in the United States will not result in catastrophic collapse. Therefore this would be a good time to purchase and acquire a larger holding in these companies.

Last Week's Update (January 24th, 2020)

M1 Finance Platform Referral Link: https://m1.finance/UIl_N9XNA_CO

M1 Finance Dividend Aristocrats 2020 Pie: https://m1.finance/quB1JH2k6