Wednesday, September 3, 2014

Monthly Update: August 2014

Portfolio Acitivities
$750 deposited into the Investing Account
Sold PSEC @ $10.44
$750 deposited into Lending Club

Portfolio Income
Dividends ($103.05)
     APPL: $3.29

     PETM: $3.51
     POT: $10.84
     RKT: $7.00

     STX: $8.31
     ARCP: $6.35
     PSEC: $11.93
     NDRO: $3.23

     WHZ: $37.67
     BLV: $2.64
     JNK: 4.68
     PCY: $1.97
     Interest from Cash: $1.38
Lending Club
     Interest: $41.90
Rental Income
     Townhouse 1: $950

New monthly income record: $144.95 was generated this month giving me an all time high. Lending Club, WHZ, and CIG have given me huge gains the past several months and my quarterly average has been high. 

Sold PSEC: I discussed in my previous entry, I sold PSEC. Their lack of dividend coverage is getting worse and I feel we'll see a dividend cut before the end of the year. I'll have an entry out shortly on that as I expect the drop to be significant but I'll be back in afterwards.

Focusing on C grade Lending Club loans: I'm finding the D, E, and F quality loans are starting to get higher markups in the secondary market. 4%-5% is about as low as I can find. C level I can get regularly for 2% or less. This lowers my lag time of when I start seeing a profit. At 4% I am needing 3 or so months of interest to recoup my losses through the markup fee. That has caused me to have an overall portfolio loss so far. I expect the next month or two to change that though as the majority of my loans will be 3 months old and I should hit profitability here on out.

Heavy cash position: Currently I am sitting at 38% cash. I'm definitely itchy to deploy that unused money. Cash doesn't have a yield nor capital gains. However it does give opportunity benefits. I have to be careful not to buy something just for the sake of buying it. Luckily its a new month and I'll be screening for a new investment today.

Close to no net loss on my rental: I am getting very close to no longer being underwater with my rental which means I should be able to refinance soon. I'm sitting at 6.12% and would really like to get that down. Nobody would talk to me though while I had a net loss. I might make that my priority this month and get it down further.

Disclaimer: The investments and trades discussed are not recommendations for others. I am not a financial planner, financial adviser, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.


  1. Congrats on the passive income, POU. I have been looking into BDC recently - and noticed that PSEC has creeped up to 12% - so im sure a dividend cut is imminent. Do you have any other BDCs in your portfolio?


    1. Well the 12% yield isn't so much the concern as to how well they cover the dividend with income, which they aren't.
      TCP Capital (TCPC) is another BDC that I have. They are growing the company on a per share basis and not paying out every last dime they make but still offer a nice yield.

  2. Looks good! Strong growth in the LC income over the course of this year given all the additional deposits! As for PSEC, I am likely to stick with part of my position, but will ultimately look to diversify half of it elsewhere. When I bought it I had an expectation that the yield was unsustainable, and took that into consideration.

    On a side note, I was able to refinance my underwater rental last year, so be sure to check into it and call around if you have too. I was able to drop my rate to 4.125%, so definitely worth the effort!

    1. Grats on another month of solid results pulling. Earlier in the year I sold a portion of my PSEC and purchased MAIN and FSIC just to diversify my exposure to BDCs. Still love the monthly dividends from all three.

      I would like to expand on my LC account but am still saving up for the next rental property.

    2. W2R: Wow what a great rate thats nice. Thanks for stopping by.

  3. Hello,

    I just discovered your blog. Thank you for having this published. I was researching Lending Blub when I stumbled upon this.

    This is my first (in what is likely to be several questions)... do you hold investments (sticks) past short term gains time? or, do you only sell after the term has passed?

    1. Each position in why I have it will be different. Some will be for income and others will be capital gains. My goal for gains is long term but if something happens to change the reason I got in I'll sell.
      STX I held for a couple years.
      CIG I held for less than 6 months.

  4. Nice month of passive income generated by your investments. I have to say that sitting on so much cash is not a bad thing. I know many of the dividend bloggers like to always be fully invested but then when a buying opportunity comes by they have no dry powder to act. I too have a decent chunk of my portfolio sitting in cash. I just continue to invest every month like I always have and make sure there is a stash of cash on the sidelines too. Thanks for sharing.

    1. Thanks for stopping by DivHut. Yeah I think you are right that too many in our community unload all their cash the second it hits their account. Many did not live through 2008. It was gut wrenching but left an opportunity like no other.