Monthly Money Review: August 2020

Monthly Money Review: August 2020

August felt short, warm, and full of sunny memories. We’re still at our seaside villa with the intention to celebrate my partner’s birthday in early October and then go back home. Meanwhile, the stock market had a few light swings. Apple and Tesla did a stock split and somehow now everything seems normal. My investment portfolio performance suffered a bit, but since I’m investing in using a dividend-oriented strategy, that’s not so important.

I had some troubles depositing funds to my Interactive Brokers account through Paysera

In one of my early posts where I shared how I chose my brokerage account, I shared with you that I use Paysera to transfer funds with no fees to my IBKR account. Apparently, that’s no longer the case. IBKR rejected my transfer twice and it took them 4-5 days to reply to my opened ticket asking on the reason behind that. It appears that Paysera uses a foreign (to my country) bank account for the transfer. 

IBKR automatic money laundering systems detect that and reject my transfers, so I had to shift a bit my way of operating with IBKR. This basically means ditching Paysera and dealing with my own local bank for these money transfers. It appears that the conversion from the local currency to EUR and the transfer itself cost me about €0,50. That’s not too bad, as I’m depositing funds into my account once a month.

How much I saved this month?

In total, I saved 40% of my income this month. I’m quite astonished by this number, as I never thought that I would successfully save that much money. The median for the year is 46% of my income saved! Not sure how much the Covid19 pandemic is contributing to that but since we limited lots of our expenses thanks to it, it definitely has a positive impact on my savings.

In terms of investments, I invested 7% of my income this month, which is normal and in line with my goals. I’ll try to keep this number and possibly increase it in the upcoming months. If I average 8-9% till year-end, that would mean I’ve beaten my personal expectations. Average investments are as expected – 7% YTD.

YTD savings money review august 2020
YTD savings and investing rate in % relative to my monthly income

What I bought this month?

After a bit of research and looking into different companies, I concluded that now is a good time to invest in Bank of America ($BAC). Which are the key statistics that I’ve looked at?

  • P/E ratio is 11,29. Probably not ideal, but still on the positive side.
  • Price-to-book ratio is 0,91. This is good, could be a sign that the stock is undervalued.
  • (P/E ratio)*(Price-to-book ratio) < 22,5. This is something I learned from the book The Intelligent Investor. If the P/E multiplied by the Price-to-book ratio is less than a 22,5, this could be a sign that this stock is indeed undervalued.
  • Current ratio is 0,93. I’m not completely happy with this one – ideally, I would look for companies with a Current ratio of at least 1 or even 1,5.
  • EPS has been growing for the past 10 years.
  • Market cap: $221B – a large company
  • Net income has been increasing for the past years
  • PEG is far from ideal here. I’ve calculated it myself and for the most part, the growth rate of $BAC is negative, meaning the PEG will also be negative. This is the place where I’m taking a risk.
  • The dividend yield is rising for the past 10 years and is currently 2,82%

I’ve bought 5 shares of $BAC for $25,76 a share, which is a good purchase I think. My investment portfolio starts to look more and more as a dividend-oriented one. Data and statistics are coming courtesy of MacroTrends.net

What I sold this month?

I’ve bought $AAPL shares (or a fraction of a share to be exact) when its price was well below the $300 mark. A couple of weeks ago I got a notification that the $AAPL shares risen with more than 5% to a whopping $503/share. The date was August 28 and I knew that after the upcoming stock split the shares will lose some of their value. So I just sold them, billing 80% revenue over my investment.

Yes, I know that on Monday I would have 4 times more shares, but was totally uninterested in that. Initially, I bought the stock because I didn’t understand most of what I was doing so I just bet on a company and a business that I had knowledge about. 

Would I buy Apple shares again? Yes! Would I do it right now? Definitely no! For the right price, I’ll hop on board again. But it might be quite some time until that happens. Until then, there are more promising companies to invest in. If there are not, it’s totally fine and I’ll just purchase more SXR8 shares. Apple is a tempting company as the growth prospects are huge. However, despite their dividend, they are still overpriced to me, despite that recent stock split.

What my investment portfolio looks like today?

So, to do a quick recap, I’ve bought 5 $BAC shares and sold 0,18 $AAPL shares. As some portion of my investment portfolio is still in Revolut where I started my investing journey, I’ll share yet another screenshot from Yahoo Finance, which I use to monitor my portfolio performance.

monthly portfolio august 2020
Current portfolio performance + holdings

I think it will be fun to do this as a monthly recap of my investment portfolio from now on. If you’re interested to see more, let me know down in the comments!

Always do your own research before buying stock. This post is not investment advice in any shape or form.

I write my monthly reviews to keep a note for my future self and to remember the reason behind some of my decisions.

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