The Time in the Market portfolio – December update

It’s spreadsheet weekend and time to revisit my portfolio again!

Winter has finally arrived and I just spent a good ten minutes digging out our cars from the snow storm that just passed through the state. One of the things I like about living in an apartment is the lack of shoveling as I just have to brush off our cars and move them to a parking spot that’s already been plowed!

It gives me more time to do some of the things I love to do instead like updating my spreadsheets!

I always get more productive during snow storms. It must be the fact that I’m stuck inside surrounded by a blanket of white that makes me want to do some work and I spent most of last night updating my portfolio spreadsheets to be a lot more usable.

The portfolio has had a solid run as of late with 14 consecutive months of growth(8 of those being above a 10k increase) and that looks to continue this month as the stock market showed no signs of stopping its upward ascent.

It’s hard to say whether this will continue as valuations are high. The good thing is that we’re actually starting to see earnings growth and there aren’t that many alternative investments of value so it’s possible the stock market keeps doing its thing. I do expect a correction sometime in the next few years but who knows when it’ll actually happen.

If you read my blog, you know how I feel about timing the market so I’ll keep going through the ups and downs because I’m a long way away from needing the invested money.

The good thing about this great performance is that it has brought me within sniffing distance of my next milestone, 500k.

The last update had my total at $471,818.58 so let’s take a look at where it sits today.

December 2017 portfolio update Continue reading “The Time in the Market portfolio – December update”

Revisiting my asset allocation

Asset allocation matters when it comes to long term returns. It serves as a guidepost to stick to when times are bad and also gives me the opportunity to balance the risk and rewards of investing according to my own goals and risk tolerance.

There is no simple formula for figuring out what asset allocation is right for an individual. There are simple ones like the three-fund portfolio which includes three total market funds that cover domestic and international stocks as well as bonds weighted in a way that matches the risk tolerance of the investor.

There are also more complicated ones that slice and dice the various asset classes with various goals like increasing return, increasing income or decreasing risk.

In some of my initial posts which you can read here, I went into detail about my investment strategies and my own asset allocation.

The asset allocation I use right now was something I developed in 2008 right after graduating college and I think it has worked well for my needs. I didn’t spend a lot of time on it back then so when I started this blog, I wanted to make sure it was still something I was comfortable with and also something that showed favorable results against a simple three-fund portfolio or even the S&P 500.

The back testing I did in 2015 showed favorable results for that portfolio in terms of risk/reward when compared to a standard three-fund portfolio as well as the S&P 500.

We’ve got another two years of data now and I wanted to take some time to revisit my asset allocation and to see if those results are holding up through the bull market of the past few years. The goal is to see if the asset allocation I have now is still something I’m comfortable with going forward.

The portfolio analysis below is a simple one using only index funds so it doesn’t mirror my portfolio exactly as I do have some individual holdings that will skew my results against a simple portfolio that only uses index funds. Still, I feel like it’s a very good approximation of whether or not my strategy is still successful on a historical basis or whether some changes are necessary.

I do know that historical returns do not guarantee future success but it’s still a fun exercise to see how my strategy has compared to simpler ones and whether all this “work” in balancing my asset classes is worth it. Do note the quotation marks around work because portfolio tracking is something I enjoy quite a bit but others may not find it as enjoyable and opt for a more simple approach.

Just like I did back in 2015, I ran the below data through portfolio visualizer using a $10000 starting point, $5000 in annual contributions and an annual rebalancing. This time, the tool runs from January 1995(the first year emerging market data is available) through September 2017.

There are a ton of different asset allocation strategies you can find out there but I wanted to keep the comparison simple.

I compared a three-fund portfolio(Portfolio 1) someone my age might use(50% US/30% International/20% Bonds), my own portfolio(Portfolio 2) and I added a Vanguard 500 Index fund as a benchmark.

The Asset Allocation Data

Portfolio Analysis

Continue reading “Revisiting my asset allocation”

The time in the market portfolio – November 2017 update

It’s spreadsheet weekend guys!

I’m always excited when I get a chance to update my spreadsheets, whether it be my portfolio or dividend. In fact, I’ve spent the last few days thinking about how I want to update both spreadsheets for the next year. I’ll likely create brand new spreadsheets in the next few months as the data on both current spreadsheets isn’t very well organized now that I have almost two years of data tracked.

That’s how cool I am, I spend my weekends pondering and being excited about updating spreadsheets. I already have some ideas for making them all better and I’ll have more time to do so now that work is slowing down. The fact that it’s freezing outside already will also give me ample time to do so since I go out a lot less during winter.

The portfolio is getting closer to 500k and I the S&P 500 was positive again this month with a 1.24% which means good things for my portfolio.

We’re well into Q3 earnings season and results have been pretty good which bodes well for the bull market’s legs.

For those keeping track, my portfolio has had 13 consecutive months of growth and 7 of those months have grown by more than 10k. That’s the sort of thing that’ll happen in a bull market as growth has definitely outpaced any contributions I’ve made this year.

The last update had my portfolio total at $459,952.98 so let’s take a look at where it sits today.

November 2017 portfolio update Continue reading “The time in the market portfolio – November 2017 update”

Time in the market’s Q3 2017 goal review

2017 was a year of firsts for me and that included the first time I set concrete goals that dealt with my portfolio. I’m sure we all have goals in the back of our mind that we strive for but writing them down and actually committing leads to a higher chance of success. I thought it’d be fun if I set tiered goals for myself and therefore decided to mimic the Olympics and gave myself bronze, silver and gold goals to aim for this year.

These goals were designed with the idea that Bronze would be a tiny stretch and everything else would require quite a bit of work to get there.

I wrote the initial post in February and promptly forgot about it but recent months of sub 20% savings rate reminded me of those goals.

Fall is one of my favorite seasons and the changing colors of the trees all around me has me wondering if it’s time for some changes in my life as well. I figured it was a good time to revisit my goals if I can make any adjustments in the last two months of the year that will help me hit those goals.

I’m hoping I can at least get most of the bronzes before the year wraps up and set my sights on something higher for 2018.

There were a bunch of goals in that initial post so let’s go through them one by one and see where I sit in relation to the various medals. The below analysis includes data through September. Continue reading “Time in the market’s Q3 2017 goal review”

My portfolio – October 2017 update

It’s spreadsheet weekend and time to look at my portfolio again. I like looking at my portfolio monthly not only because I like seeing the numbers go up but also because it helps me see where I am against my asset allocation.

That key piece of info allows me to target next month’s contributions strategically and/or shift some assets that have performed too well so I’m always buying asset classes that are lagging behind. Taking advantage of a divergence in asset allocation doesn’t require a monthly review but I happen to like spreadsheet and numbers so it’s not a bother for me.

The S&P 500 had the best months since last December with a 3.42% return and continues to show no sign of stopping taking the YTD return to just a bit under 14%. That’s certainly meant good things for my portfolio and I’m thinking the S&P 500’s performance will continue my run of positive months.

For those keeping track, my portfolio has now had 12 straight months of growth and 6 of those months grew by more than $10,000. I know this type of market won’t be around forever but I’m enjoying the ride up for now.

It’s time to take a look at my portfolio today.

As a reminder, last month’s total had me just a hair under 450k at $448,776.58.

October 2017 portfolio update Continue reading “My portfolio – October 2017 update”

My portfolio – September update

Hi and welcome to another monthly portfolio update. We’re moving into Q3 earnings season now with a solid 2nd quarter behind us. Solid earnings lead to solid performance as the S&P 500 is up nearly 10% YTD which has meant good things for our portfolios.

According to Factset, for Q2 2017, the blended earnings growth rate for the S&P 500 was 10.3% which was higher than end of June analyst projections. This was one of the first times I’ve seen that happen in quite some time. Energy was the biggest grower and really drove a good chunk of that overall rate but every sector was above 0% this time around. There were some laggards here and there and definitely some signs of weakness in certain sectors like customer staples and discretionary but the overall results were good.

Q3 is looking less rosy right now as estimates have dropped in recent months and are only showing a 4.9% growth rate for the S&P 500. Energy is still the primary driver of this growth rate and utilities, telecom and consumer discretionary expected to be below 0% for the quarter. That means some potential issues for a market that hasn’t shown any signs of stopping and will likely look at any signs of weakness as a selling opportunity.

Still, we’re in a spot where the S&P 500 is finally growing after 3 years of being still and long term projections are currently still optimistic showing 10% growth rate for 2017 and 2018 overall. If that happens then the stock market is probably going to continue to rise due to the lack of alternative investment options.

The S&P 500 was up again this month showing an 0.82% increase since my last portfolio update. I’ve kept throwing money into the market regularly which has meant good things for my portfolio which has shown 11 straight months of growth which included 5 months where my portfolio grew by more than $10000!

There have been some out performers in my portfolio which drove my asset allocation out of whack but that’s a problem I’m slowly fixing by targeting new dollars into under represented asset classes. I’m sure that problem continues this month but I’m excited to see where my portfolio stands today and where I’ll be targeting my investment dollars next month.

Let’s take a look at my portfolio today. As a reminder, last month my portfolio hit a new all time high of $437,778.47! Continue reading “My portfolio – September update”

My portfolio – August update

Earnings season continued to accelerate this month with more than 90% of S&P 500 companies reporting Q2 results by now.

The news has been largely positive as Q2 growth rate has come in at a solid 10.2% and will likely beat the 6.5% projection I referenced in my last portfolio update. Revenue growth was solid solid with a 5.1% rate.

That all seems like good news but the stock market has had a largely muted response to the good results. Part of that is driven by the fact that the stock market is already aggressively priced and part of that is driven by the questions around stability that arose with the North Korean situation. There’s never any certainty with the stock market and a pullback is certainly possible but at least for now the fundamentals look pretty good even if volatility spikes up in the near term.

Q3 guidance has been largely negative with over 63% of the companies issuing guidance being negative but that’s actually below the five year average of 75%. Analysts are projecting another growing quarter with a rate of 5.2% in Q3. The projection for Q2 was right around 6.5% so this makes the first year in a few where we’re not only seeing growth but actually seeing growth that is beating analysts projections which seems like good news to me.

The S&P 500 barely moved in the latest month taking a dip near the end of last week that brought the monthly change to +0.67%. That comes after a slight reduction last month but the overall trend this year has been up and that has shown in my portfolio. I’ve been on a roll with 10 straight months of positive growth which included five months where my portfolio grew by more than $10,000! That’s been awesome to see but it has also led to some asset allocation discrepancies as certain asset classes have grown more than others.

I’ve also had some higher spending months recently so my savings rate has tanked which has made these discrepancies harder to fix as there’s less new money flowing into the portfolio each month. I hope to change that soon although I have a vacation coming up in a few days which certainly won’t help August’s savings rate numbers!

Let’s take a look at my portfolio today and where my money will be going next month.¬† Continue reading “My portfolio – August update”