With the Dividend Diary, I document how a cash-flow investment approach can be part of a well-balanced wealth management. To keep things simple, I have built three pillars:
- Active income.
- Passive income.
- Conversion.
Dividends fall into the last two categories. They are passive because they provide a cash flow without me going to work. Additionally, they are an essential pillar for conversion since they can be reinvested to generate even more income in the future. That is the Theory. Now, let’s get down to practice.
General sentiment
Europe is back!
At least, that’s what many investors are thinking right now.
Due to the currently strained political relationship between the U.S. and Europe, many European nations have realized that moral values cannot be defended by simply pointing fingers and relying on their “big brother,” the United States.
Accordingly, the announcements have been significant: commitments to invest billions – if not trillions – into European infrastructure and defense.
In principle, I see this as a positive decision.
However, my concern is that, amid all this spending, policymakers may overlook the need for financial discipline.
If large-scale investments are not accompanied by cost-cutting elsewhere, it could become a strong driver of inflation, a risk that is often underestimated at first glance.
So far, the euro (€) has seen a short-term appreciation against the U.S. dollar ($), though historically, it remains at a relatively low level. Given this, I will likely begin shifting more investments back into U.S. stocks in the coming months.
Whenever the euro is particularly weak, I tend to favor European stocks, as history suggests the currency typically trades slightly above the USD over time. This reasoning recently led me to invest heavily in European insurance companies.
By the way, insurance stocks such as Allianz, Munich Re or Talanx might offer an interesting hedge against the potential upcoming inflation in the EEA.
Higher inflation often leads to rising interest rates.
This can improve insurers’ profitability through higher investment return as insurance companies allocate a significant portion of the premiums they collect from policyholders in fixed-income assets like government and corporate bonds.
When interest rates rise, newly issued bonds offer higher yields, leading to improved returns on insurers’ investment portfolios.
My monthly income with dividends in March:
This month, my cash-flow approach generated the following income through dividends:
So overall:
- the total monthly income with dividends in March (after taxes) was: € 553.73 / appr. $ 600.
- compared to last year, the performance was great (+ 17 percent YoY),
- ⌀ monthly dividend income (ttm): € 597.13 / appr. $ 645,
- ⌀ monthly dividend income (ttm) compared to the previous month: + 1.5 percent.
The bigger picture looks like this:
Stock purchases in March
Besides my established savings plans, I bought three tranches in these European defense stocks in March, worth approximately €10k.
The rest of the article is accessible on my Substack. It contains an overview of the stocks I purchased in March, the stocks I will buy in April, and a deep dive into my portfolio performance.
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