Q4/2021 & FY2021 Results

2021 was a continuation and tail of the globally crappy 2020. COVID pandemic was still going strong globally but it has not been impacting the markets as much as one might expect. Soon after the initial hit in 2020 I guessed that true recovery would be happening in 2022. This might actually end up being quite accurate but recovery is of course quite subjective. Stock markets recovered in my opinion way too quickly back then and haven’t showed any true weakness during the subsequent waves of variants. This despite the fact the vaccines ended up being somewhat inefficient. Not inefficient in providing protection against severe forms of disease but against spreading the virus. Then there’s the ongoing inflation surge and geopolitical tensions with Russia (continuation of the Crimean conflict) and China (power shift). I sense disturbance in market force but of course next year might end up being yet another year of the bull. National debt levels are already sky high, public spending will increase and here in European Union national debt appears to be transitioning into federal debt. Having said that, Europe as a whole remains as troubled and declining continent of has beens. I’m sad to say that but I believe that seeds for at least partial EU breakup have already been sown. Hard to say if that would manifest itself already during this decade but 2030’s might the truly dividing decade. US has a fair share of global troubles going forward but it is clearly a more dynamic and relevant market to invest in.

Looking at the results, this year was continued recovery from the drop in 2020. Year over year value shows relatively good performance when compared to overall market performance. This is mostly due to slower portfolio recovery (lower comparison point) due to REIT exposure but positive anyway. Primary dividend portfolio gained 32,47% (last trading day not included) and produced 7436 EUR as dividends before taxes (5040 EUR in FY2020). Reasonable recovery from the drop but it should also be noted that some of these dividends were delayed from 2020 and paid now due to regulation. This skews the year over year comparisons a bit. These dividends (after taxes) covered 103% of base consumption.

Plans for next year? This is a difficult one. I’ve been in holding pattern for quite some time already. Short term plan is to continue. In practice this means small stock purchases mainly as dividend reinvestments until something truly changes. I’ll allow my cash position to increase even though it’s quite significant already. I’m aiming for quite significant cash position to maximise flexibility later on when considering e.g. sabbatical, entrepreneurship or other significant life style changes. First critical FIRE step is quite close but let’s see how things evolve. This step includes following criteria: no debt, cash buffer for at least five years and dividend income covering running expenses. Let’s see how the project continues. Original target was end of 2024 but that is and always has been a moving target.

Recent Buy: Omega Healthcare Investors

Redeployed the money from GEO Group sale and bought additional 50 Omega Healthcare Investors shares for 27.60 USD per share. I was originally planning on doing so in January but it hit decent enough valuation and I had some USD dividends to reinvest so decided to pull the trigger already. Probably it will slide further down together with the overall market but so be it. This is a bit riskier position which is reflected by the high yield. I typically have few of these to spice up things and it remains to be seen if this will eventually backfire like GEO Group did. Perhaps this is the last transaction of the year. That should be the case unless something truly exceptional happens during the coming weeks.

Recent Buy: Kemira Oyj

Maintenance purchase for secondary portfolio at Nordea as they had the monthly campaign day with reduced fees. I bought additional 20 shares of Kemira for 13.20 EUR per share. Slow and steady nibbling until valuation is low enough to buy bigger chunks.

Recent Sell: GEO Group Inc.

End of the year cleanups are here. I sold the small GEO Group position of 160 shares for 7.15 USD per share. Elimination of REIT status and dividend plus the overall extremely poor performance lead to this decision. Sure, one could consider the stock to be undervalued in long term but it does not pass the criteria to be included in my speculative portfolio. I rule this as a miss, take the loss and move on. Decision I should have done a long time ago. I might reinvest the money in Omega Healthcare REIT which is also a high yield and elevated risk position.