For the month of January, the DOW gained 939 points. That is a 2.75% gain for the year. Interest and dividend income was $1,635 for the month. Withdrawals for living expenses came to $1,014 for January. In the past 12 months my retirement account is down by 4.48%. That is much better than it was at the end of December. January’s change in market value completely erased the loss in December 2022. Last month added $1041 in interest to the account. Next month will be even better with the extra quarter percent increase in the Fed funds rate. That is close to the goal of having enough cash coming in to pay monthly bills without dipping into savings.
I sold 50 shares of Kontoor Brands (KTB) at $43.53 this past month. I decided to take my profit and use the money elsewhere. It has since climbed to almost $50 per share. I also sold 100 shares of Algonquin Power (AQN) @ $6.97. I thought it would provide a good dividend, but when I received the dividend payment, they took out 15% for foreign tax, because the company is located in Canada. I used the money to buy 100 shares of NRG Energy at $32 per share. NRG is located in Texas and pays a 4.36% dividend. NRG is currently trading at $35.20 per share, so I have not lost any ground from earlier stock sales.
Money is flowing into NASDAQ stocks a day after the Fed quarter point rate announcement. This will likely reverse itself in the next day or two. Investors get ahead of themselves and then they realize that rates will likely stay in the 4.5% – 5% range for the entire year. Companies will slowly get used to working within a higher rate environment. But profits will likely be lower because of it. As an investor, I’d rather wait for the wild price action to settle before I buy stock in a growth company right now. I don’t want to worry about an investment when I can get 4.25% without risk. Over 50% invested in mutual funds and ETF’s is good for now.