Happy Thanksgiving!

Thanksgiving 2017

Happy Thanksgiving everyone.  Just had my computer updated with the Windows 10 Fall Creators Update.  What a strange name.  Took a long time, but everything seems to be in order.

I took a pretty long look at everything regarding my portfolio yesterday.  First and foremost, I looked at taxes.  I did sell a couple positions that were underwater to harvest some ST losses.  So I am basically flat there.  LT, I "unfortunately" have a lot of gains.  Not much to be done about that but bite the bullet and pay IRS in April. Dollar wise it will be the most I have ever had to pay.  First world problem I suppose.

I did buy some more GARIX, VTIBX and OIBAX.  I don't comment about these mutual funds much on this blog.  But I do believe that a balanced portfolio needs to have some bond funds, even if they are boring.  Sometimes boring is good.

2018 Thoughts

Clearly MFI has been working well for me, as anyone who reads my weekly updates knows.  It is funny, even though I have a good track record - I never fully trust it or myself.  I did increase all my MFI portfolios about 35% in 2017.  I intend to increase $ allocated to MFI in 2018 by another 35%.

Part will come out of my cash, but I also plan on shrinking my Misc portfolio.  I say that every year, but this time I mean it. Misc for all it's "excitement" is always my worst performing component.  I do plan on keeping a fair amount (25 to 30%) of cash and I will also have money in dullish investments like mutual funds listed above, which should be near cash.

I am not a great macro thinker, but it can be helpful to have macro opinions as benchmarks. Here are some key views of mine.

• I do believe some form of tax reform will pass. Republicans have too much on the line to not deliver here.
• Post tax reform, I do believe there will be a flurry of M&A.  I think a lot of potential deals are on hold waiting to see how the tax reform shakes out.
• I really do not see a stock market crash.  I think the real risk going forward is inflation getting out of control a bit.
• Having lived through the 1970's, the last time inflation shot up, I know real estate is a good place to be as well as commodities.
• The Fed is likely going to have to steadily raise rates to battle the inflation.  That will be bad for bonds and bond like stocks (of which I own quite a few).

Some of these things are already happening (in my view). Look at my dividend portfolio results in Q4:

Dividend Stocks	Start	Current	Divvy	Overall Pct Gain	Quarterly Pct Gain	9/30/17 Price	Yield
TK	6.20	8.46	0.08	37.9%	-5.3%	8.93	2.6%
CPLP	3.54	3.23	0.08	-6.4%	-7.7%	3.50	9.9%
EVG	14.46	13.79	0.26	-2.9%	-3.2%	14.24	6.7%
KNOP	21.30	20.65	-	-3.1%	-3.7%	21.44	10.1%
LADR	13.01	13.87	0.30	8.9%	0.7%	13.78	9.1%
FDEU	18.40	18.56	0.69	4.7%	-4.4%	19.42	7.8%
KCLI	48.89	48.00	0.33	-1.1%	-3.5%	49.75	2.3%
ISBC	13.25	14.21	0.15	8.4%	4.2%	13.64	2.5%
RLJ-PA	28.45	27.53	0.49	-1.5%	-1.0%	27.82	7.1%
PSXP	47.39	46.56	1.03	0.4%	-11.4%	52.56	5.5%
SBRA	22.34	19.34	0.93	-9.3%	-11.9%	21.94	9.3%
OIBAX	5.91	5.95	0.16	3.4%	0.0%	5.95	1.6%
JQC	8.18	8.09	1.57	18.1%	-4.7%	8.49	7.0%
DSL	19.47	20.04	1.65	11.4%	-5.7%	21.25	9.0%
OCSI	8.68	8.59	0.19	1.2%	-2.4%	8.80	8.8%
RILY	15.58	18.70	0.21	21.4%	9.7%	17.05	0.9%
NS	37.98	27.84	0.82	-24.5%	-31.4%	40.59	15.7%
TGONF	11.04	13.07	1.79	34.6%	2.1%	12.80	5.4%
VTIBX	10.96	11.01	0.01	0.5%	1.1%	10.89	1.0%
TGP	17.89	17.20	-	-3.9%	-3.6%	17.85	3.3%
GLDI	9.29	9.02	0.24	-0.3%	-0.6%	9.07	6.7%
NRZ	16.22	17.94	0.88	16.0%	7.2%	16.73	11.1%
DHF	3.34	3.34	0.16	4.8%	-5.4%	3.53	8.3%
O	25.50	56.29	20.80	202.4%	-1.6%	57.19	4.0%
Totals				4.2%	-3.3%		6.0%

So look at the quarterly % change column.  Down 3.3% overall since 9/30.  Then look at the most bond like, JQC (-4.7%), DSL (-5.7%), DHF (-5.4%), FDEU (-4.4%), EVG (-3.2%) and OIBAX (0%).  I do think that this is the beginning of the bond bear market.

But as I often say, I am not so focused on values of my dividend holdings, but rather income stream.  But I also think I have reached my max here.  I do not plan to add to dividend holdings in 2018, perhaps just some reinvested dividends.

Stay tuned.