The current market environment is very polarising. There is a clear divide amongst investors. On one side stands those that remain cautious and have been sceptical of the COVID recovery rally the whole way up. On the other side are the bulls who are of the view that stocks only go up. Strange thing is they can’t be blamed for this view. Governments around the world seem determined to use any means necessary to prevent ordinary recessions from turning into depressions or banking crises. The money printers have been turned on. And the bulls are winning.
The divergence between investors who are cautious and those who are optimistic is understandable given the economy is becoming increasingly divided as well. On one hand, the demand outlook remains incredibly challenging for many old-economy businesses. High street retail, travel and restaurant businesses are being hit particularly hard in the current environment. On the other hand, there is a powerful innovation & productivity wave that is driving meaningful secular growth within certain sectors – particularly e-commerce, digital payments, and software-as-a-service (SaaS) offerings.
But whilst certain industries are booming, it is only a handful of companies that are benefitting. The trouble is that the. market is painting large portions of industries with the same broad brush, and I think it’s creating investment opportunities. Anything related to online is deemed a future winner, while anything related to the physical world is toast. In aggregate, this trend is directionally correct, but the market doesn’t do a great job at figuring out who the winners and losers might be from within those two broad groups.
And this is where the opportunity as an individual investor resides. The indiscriminate pricing trend. A number of good companies have unfairly been struck down by the market. As an individual investor I can cherry pick companies that have become incredible bargains relative to their future earning power. And this is exactly what I did during the month of July.
The stocks I bought last month are :
- PZ Cussons – Bought 90 shares at a price of £1.81 each
- Unilever – Bought 8 shares at a price of £41.72 each
- AG Barr – Bough 45 shares at a price of £4.48 each 206
- Royal Dutch Shell – Bought 16 shares at a price of £11.68 each
The four purchases above have added £34 in dividend income to my portfolio. Adding this to my previous total, I am expecting to receive £3,774 in annual dividend income a year.
I cannot understate how blessed I am to be in this position. To have close to £315 rolling into my account every month without me having to lift a finger is truly a great position to be in. Yes it has taken hard work to get to this position. I have diligently been buying shares every month. I have been meticulous in my research. I have been consistent in my approach. But if I was to quit investing today and simply let my money ride, the money would still roll in. It is purely passive. It doesn’t require any effort from my part going forward. That is what consistency and discipline does. It ensures things that start off small multiply over time. And that is exactly what has happened to my annual dividend income.
But I am not looking to quit now. I will keep going in order to build my passive income streams. I want my dividend income to cover all my expenses. I want to create my own universal basic income. Looking at my progress, it is certainly possible. Financial Freedom is no more a dream. It has now become a possibility