Portfolio Update [April ’21]

April has officially come to a close. And with it probably one of the best performing months for my portfolio. You’ll also notice there are two new entries this month! MEL is Meridian Energy and NWF is New Zealand Wind Farms. Why these two companies? And why now? Well, let’s dive in!

I have mentioned that my plan is to eventually own shares in every single energy company that is publicly traded. And now I get to be all full of self-importance and quote myself from February’s Portfolio Update…

I intend to own shares in every single energy company in New Zealand. Why? Because as NZ moves to a more digital future, the demand for power will increase. Electricity is also a service that people need and if you invest in needs, you will never go broke.

Kyle

Meridian joins Genisis and Contact Energy in my portfolio to help round off the energy sector. I have one remaining to collect – like Pokémon – and then I think they send you a medal or a badge… If not, they really should. Also, this helps hedge my bets. People have to get their electricity from somewhere, so I made sure that no matter which company they choose, I win. Simple, easy, logic.

The other addition is New Zealand Wind Farms. While their share price is quite low – at only 20c a share, when I started looking at them, it was 10c a share. NZF manage to tick off a few boxes when it comes to being a good investment for me. If I were qualified to give this type of advice, I’d also suggest you buy a good share of them too. But what exactly makes NZF a desirable choice in my mind? Glad you asked!

NZF is one of the largest producers of electricity in New Zealand, and their customers are the four big energy companies, which in turn makes their customers everyone in New Zealand reading this post. NZF is also a clean producer of power, so they are guilt free. Their share price is on the low side for now, and will only go up in the future as they expand – because let’s be honest – no company stands still. And if they do stand still, they’ll be called NZR. “Ha ha!” he says, while quietly weeping… The last point about NZF is their dividend payout. Typically, this is set at a flat rate of 10%. Not too bad when you get 1c back on every 10 you put in…

As you can see, my portfolio is almost designed to own the hole pipeline. NZF makes the power, energy companies buy the power from NZF, and sell it to people at home. This was my basic idea between AirNZ and NZR… Of course, COVID had other ideas, and it looks as if NZR is going to fade away in the next few years. But thats another story! I like to buy shares that tend to synergize. Like a good Pokémon team! You want to find combos that are logical, and that you can understand.

Now to deviate a bit – my long-term goal is to get to $100,000 invested in ten years. It sounds like a lot, doesn’t it? Sounds practically impossible to some people! But as the African proverb goes – you eat the elephant one bite at a time. $100,000 in ten years is $833 a month, $416 a fortnight, $208 a week or $30 a day. I know some people who spend that much on just coffee alone! Well not really, that’s a joke. But it really happens!

Let me show you my forecast. This is using just a bit more than $833 a month, adding a modest 5% return a year and building on what I already have invested. You can see all the calculations on the side to make sure it all looks kosher. In 9 years time, I’ll have $151,991 invested in the stock market. Thats not too bad at all! I would have invested a total of $100,000 (or just over) and that money by itself will have grown by 50%! (5% over 10 years equals 50%… Thats some quick maffs for you )

What this doesn’t take into consideration, is my current plan of re-investment. Every company that has a re-investment plan, I’ve signed up for. This means I never see the money that gets paid out as dividends – they just go back into buying more shares in that company. The benefit it that the government also doesn’t get to see this money! So the tax on that is pretty low, if existent at all. Add to this that I’ll be using all dividend payouts to buy more shares for companies that don’t have this type of setup, and we’re looking at quite possibly close to $200k after 9 years… Of course, that’s all going to plan. And we all know, the stock market is a fickle beast…

April 16th, 2021
Current Portfolio : $22,454.36
Current Profit : $2,272.34 (8.6%)

And now I must put this in for the legal reasons…
I am not a financial advisor. All advice is taken with this in mind. I do not benefit from you using the same platform I do, or by using a different one. I do not have any insider knowledge of any company listed. Everything I will talk about – from the tools to the news – will be as available to me as it is to you. Again: I am not a financial advisor and never will be.