Weekly Asset Management Report: Growth Rate, Dividends, and Reinforcement of Reinvestment Progress
Overview of the Week
This week, our overall portfolio performed steadily, with consistent dividend (distribution) income contributing to financial growth. A portion of these dividends was reinvested, further strengthening the cycle of wealth accumulation.
In last week's report, "Enhancing Life with Dividends of ¥158,175 | Asset Management Report for Week 3 of January 2025", we discussed how dividends have been used to improve our quality of life. This week, the positive impact of this approach has continued, as reflected in the progress of total asset growth, detailed dividend breakdowns, and reinvestment efforts.
This article delves into the growth rate of each asset class, the details of this week’s dividends, the reinvestment progress, and even some recent lifestyle changes.
Growth Rate by Asset Class
The following chart shows the weekly growth rate of each asset category. Notably, points (credit card and cashback points) recorded a significant increase of +17.24%, while the overall portfolio grew by a steady +2.19%.
Details:
- Cash/Deposits (-0.41%): The slight decrease was due to dividend reinvestments and living expenses. However, its small share in the overall portfolio limited its impact.
- Stocks (Physical) (+1.29%): Growth in stock value was driven by robust U.S. market performance, buoyed by strong earnings reports and improved investor sentiment. Japanese equities also remained stable, contributing to valuation increases.
- Mutual Funds (+4.20%): Gains were primarily attributed to rising NAVs and reinvestments, with Fidelity U.S. Equity Fund delivering strong performance. Despite a strengthening yen, the impact on USD-based investments was minimal.
- Pensions (+3.83%): Growth in pension assets reflected stable returns from Japanese markets. Long-term pension investments continue to show promising growth potential.
- Points (+17.24%): The surge in cashback and rewards points was driven by increased credit card usage and campaign bonuses, emphasizing the benefits of efficient spending in daily life.
- Total Assets (+2.19%): This overall growth reflects the combined effects of dividend income and favorable market trends.
Market Trends and Influences
- U.S. Market: Strong corporate earnings boosted key indices, with tech stocks seeing a particularly sharp rebound. This positively impacted both stock and mutual fund holdings.
- Japanese Market: The Bank of Japan’s interest rate hike benefited financial stocks, while real estate stocks faced corrections. This resulted in stable overall performance.
- Exchange Rates: A stronger yen, driven by the BOJ's rate hike, slightly dampened the yen-converted value of foreign assets.
This Week's Dividend Results
This week’s total dividend income amounted to ¥66,868, providing stable income growth.
Breakdown of Dividends:
- Fidelity U.S. Equity Fund: ¥36,726
- Invesco Global Select Equity Fund: ¥30,142
Details:
- Fidelity U.S. Equity Fund: Benefiting from strong U.S. equity performance, this fund continued to deliver reliable income, aligned with its stable-return investment strategy.
- Invesco Global Select Equity Fund: With a diversified portfolio across global markets, this fund mitigates currency risks while consistently generating dividends.
The dividends received were used for living expenses and reinvestment, laying the foundation for future portfolio growth.
Monthly Dividend Total and Year-on-Year Comparison
The cumulative dividend income for January reached ¥293,624, representing a 2.75x increase from ¥106,644 in January of the previous year.
Key Factors Behind the Growth:
- Additional Investments: Increased investment amounts over the past year.
- Market Performance: Strong performance of mutual funds and equities.
Progress toward the annual dividend goal of ¥3 million stands at 9.8%, marking an encouraging start to the year.
Reinvestment Activities
A total of ¥60,000 from this week’s dividends was reinvested across two funds, aiming to enhance future dividend potential.
Reinvestment Details:
- Fidelity U.S. Equity Fund: ¥30,000
- Invesco Global Select Equity Fund: ¥30,000
Purpose of Reinvestment:
- Maximizing Compound Growth: Reinvesting dividends accelerates long-term wealth accumulation through the power of compounding.
- Fund Selection: These funds are chosen for their stable dividend payouts and diversified investment strategies, which align with long-term goals.
Using Rakuten Securities for cost-effective reinvestment ensures efficient portfolio management.
Summary and Future Plans
This week’s activities reinforced the wealth accumulation cycle through stable dividend income and strategic reinvestments. Additionally, by focusing on enhancing daily life quality, a balance between financial growth and personal well-being has been achieved.
Goals for Next Week:
- Explore additional reinvestment opportunities to further diversify the portfolio.
- Identify essential vs. unnecessary expenses to maintain frugality while preserving quality of life.
- Gather information on new investment products to strengthen long-term financial strategies.
Final Thoughts: Balancing Wealth and Lifestyle
Recently, there has been a slight shift in lifestyle priorities. Previously, frugality was paramount, with a strong focus on minimizing expenses like avoiding convenience stores. However, the focus has gradually shifted toward enhancing life’s quality.
For example:
- Convenience Store Purchases: Once avoided as a wasteful expense, they are now viewed as small daily joys, with seasonal products adding excitement to routine days.
- Upgrading Appliances: The purchase of a new washing machine improved daily chores significantly, demonstrating how investing in quality of life can bring lasting benefits.
Key Takeaways:
- Investing in life’s quality is as important as financial growth.
- Balancing careful spending with occasional indulgences helps maintain long-term motivation for wealth accumulation.
By thoughtfully allocating resources, it’s possible to achieve both financial security and a fulfilling lifestyle.