Capitalizing on Market Volatility: Boosting Portfolio Yield and Q1 Dividend Triumph

The recent market turbulence has been quite unsettling, with a noticeable 20% decline in my investment portfolio. While I have often reassured myself by citing my long-term commitment to index funds, the truth is that this significant drop has instilled a sense of fear and unease within me. Furthermore, there's the looming concern of potential dividend reductions in the near future, and I sincerely hope that these do not have a substantial impact on the dividends generated by my index funds. This situation has challenged my previously unwavering confidence in the stability of index fund investments and has led me to reevaluate my perspective on market volatility and its effects on my financial well-being.

In the first quarter of 2020, I decided to exit my position in AGNC, which had been my initial foray into the world of dividend investing. AGNC had initially piqued my interest due to its enticing yield. My recollection places my cost basis at around $30 per share, but shortly after my investment, the stock price plummeted to approximately $18 per share. Over the subsequent years, it fluctuated within the range of $16 to $18. Despite the rocky start, I diligently reinvested my dividends, and it wasn't until 2020 that I finally reached a break-even point. At that juncture, I contemplated whether to continue holding the stock, but my perspective on investing had evolved, and I was no longer enticed by high yields at any cost. Fortunately, I opted to sell my AGNC holdings in the first quarter, just before a substantial decline in its value. I've since observed that the stock is currently trading at around $11 to $12 per share, boasting an enticing yield of 20%.

Thanks to the recent market volatility, I seized the opportunity to acquire index funds at significant markdowns. This strategic move has effectively boosted the overall yield of my investment portfolio. In the first quarter, my dividends amounted to an impressive $430.58, marking an all-time high for this particular quarter and coming remarkably close to the total dividends I received throughout the entire year of 2017. 

Of this income, 15% is derived from my non-taxable account, while the remainder originates from my taxable account. Due to the ongoing market fluctuations and unpredictability, I refrained from contributing to my IRA account in 2020. Consequently, the growth in my portfolio value during this period is solely attributed to the reinvestment of dividends from the previous year. This robust performance demonstrates a remarkable 60% increase in dividends compared to the first quarter of 2019.

In 2020, the cumulative passive income I earned amounted to $597.35. Additionally, I successfully engaged in side hustles, resulting in a supplementary income of $136.49. It's worth noting that my Google Adsense earnings experienced a significant decline, which can likely be attributed to my reduced activity on this blog. 

Earlier this year, I executed several covered calls as part of my strategy to generate income through options trading. However, I have reservations about engaging in further options-related activities for the remainder of the year. Given the uncertainties and evolving market conditions, I anticipate that my options trading activity may remain relatively dormant in the coming months.

I've recently tapped into a fresh stream of passive income through Fundrise. Owning rental properties had been a long-standing aspiration of mine, but the prospect of becoming a landlord, with its associated time commitment and challenges, wasn't feasible. Fundrise has emerged as an appealing solution, offering a hassle-free route to property ownership without the inherent headaches. 

What's more, Fundrise presents the advantage of geographical diversification. My existing portfolio encompasses approximately 30 units spanning both the eastern and western regions, and it even encompasses commercial rentals. Despite these diversified assets, dividends remain the primary driver of my passive income stream. Fundrise has not only allowed me to realize my real estate ownership dream but has also furnished me with a convenient and diversified source of passive income, all while bypassing the traditional complications of property management.