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”

My portfolio – July Update

Q2 earnings season is upon us and the first few reports have been decent but it is way too early to know whether the expected growth rate of 6.5% is realistic. Q1 results were strong and if that continues through the end of the year then we could be in for more solid performance in the stock market.

My portfolio has been the beneficiary of that performance as I’ve seen 9 straight months of growth. The S&P has been positive in 7 of those 9 months as well so that certainly helped. It wasn’t just tiny increments either as 5 of the last 7 months have seen bumps greater than 10k. I’d be financially independent in no time with growth like that!

The market took a small break this month as the S&P 500 return was back to a negative, coming in with a -0.27% return since the last update.

The market will have its pauses and falls but I’m overjoyed with the growth I’ve seen recently. It’s impressive how quickly capital can growth once you hit a certain dollar threshold as the market barely has to move and my portfolio can spike $10k.

It also makes you realize how much I could lose if the market moves in the other direction, something that’s always important to keep in mind. It’s easy to forget that in a  market that has been so favorable for the past years but doing these monthly updates and seeing the big jumps always makes me remember that dollar swings can be large in either direction.

It’s also great to see that my asset allocation has gotten to a point where everything is close to target and I can direct new purchases towards classes that fall below target. That means that I’m buying that things that are more likely to be undervalued in relation to other assets from a long term viewpoint and that’s good for my long term returns.

Let’s take a look at my portfolio today and where I’ll be directing money next month.  Continue reading “My portfolio – July Update”

My portfolio – June update

The market continued its upward ascent this month and the S&P 500 was up 1.35% since the last portfolio update which can only mean good things for the portfolio.

Q1 earnings season is in the books and the results were quite excellent with the S&P 500 showing 13.9% earnings growth y/y, the highest since Q3 2011. It’s true that a good portion of that was driven by the energy sector which had a pretty easy comparable but even exclusive of that, the growth rate was a solid 9.7%.

According to factset, the expected growth rate for Q2 is 6.6%(down from 8.7% as of March 31 mostly driven by downward revisions in energy) and that bodes well for the stock market. It is good news to finally see growth after a few years of flat earnings. The P/E ratios right now still make the market seem expensive but it sounds like the E part of that equation is finally expanding as well which means good things for investors if it can continue.

Last month’s update showed another 10k+ increase in portfolio size and means that 4 out of the last 6 months have been 10k+ bumps! That’s just amazing to see and shows the impact growth can have on your portfolio once you reach a certain dollar amount.

What’s driving this performance considering my income, not to mention my contributions are way less than 10k per month. It’s the continued growth of the market and some excellent performance from some of my individual stocks.

UNH, one of my biggest holdings continued to rocket this month and was up another 4.22% and is now up over 13% YTD. That combined with a 20% dividend bump this month makes me a happy investor. Apple, another on of my holdings didn’t necessarily kill it this month but is up nearly 30% YTD as well. International shares have been strong performers lately after a few years of middling results that trailed the US markets. One of my main international funds is up 18% YTD and was up over 3% this month.

These are all results that are beating the S&P 500 and have helped my portfolio grow quite a bit over the past year. The constant contributions also certainly help but portfolio growth has been more than 2/3rds of appreciation in these months.

I’m a firm believer in asset allocation and shrewd stock picking being a big part of solid long term results and I’m glad to see the fruits of my labor here. International is a perfect example of having an allocation and sticking to it despite middling results in that area. I kept contributing to my international holdings despite results that lagged the US stocks and am now rewarded with excellent price appreciation as the market finally catches up to the thesis that those stocks and countries were undervalued in relation to their domestic comparable.

Now I’m at a point where other asset classes are below target and am buying those as those are likely undervalued now(or the others are overvalued) against their historical norms. Last month, I was short on bonds and REITs and that will likely be the case again this month due to the strong performance in both the domestic and international markets.

Let’s take a look at my portfolio today and which assets are lagging behind.  Continue reading “My portfolio – June update”

My portfolio – May update

It’s exciting to see how fast a portfolio can grow once you hit a certain dollar amount.

The market still grew this month with the S&P 500 trending up 1.77% which doesn’t sound like a ton but even 1.77% is quite a bit of money when your portfolio reaches 400k like it did for me with the last update

That sort of movement yields almost $7000 in growth at my level and that dollar total is pretty damn exciting. That means that now these types of months and even smaller ones can yield portfolio growth that’s much larger than my monthly contributions.

It’s interesting that now organic portfolio growth through security appreciation is now the biggest driver of portfolio increases rather than additional contributions I can make any given month. I’m not quite sure when that shift happened but I’ve started to notice large jumps in my portfolio size in these monthly updates(I’m talking 10K+) when I don’t contribute anywhere close to even half that amount.

That’s great to see but also makes you think about the other end of the coin flip. We’ve been lucky enough to have a bull market that has continued to run and that looks great on the page when it comes to portfolio size but one always has to be ready for the reverse as well if we see a large drop.

It’s great to see 10k+ monthly growth but the reverse won’t feel so great when it happens. I’ve had 8 straight months of portfolio growth and 14 positive months out of the last 15 which is pretty amazing but as a more realistic investor, that sort of consistent growth makes me a bit nervous that one of those negative periods is coming.

I’m not even talking valuations here, I’m just talking about expectations. The stock market does trend up in the long run but it also takes pauses in the short run. Don’t get me wrong, I don’t mind those pauses as they’re an opportunity to buy at lower prices and that ain’t so bad even if it looks bad on the page.

With all that in mind, I don’t have any plans to change my investments right now and have continued to purchase on the way up but I do have expectations that this sweet ride will probably take a slow pause eventually.

On the subject of valuations, the Q1 earnings that I’ve talked about in the past have been mostly excellent. According to fact set, with 83% of companies in the S&P 500 reporting, 75% have beat mean EPS estimates and 66% have beat sales estimates. The q/q growth rate so far is 13.5% which is the highest rate since 2011. A good deal of that is driven by energy companies which had negative earnings last year but even without them, the earnings growth is still above 9%.

I mentioned that the last estimates for Q1 growth rate were around 9% so if we end up seeing 13.5%, that’d be pretty damn fantastic. That’s pretty optimistic considering there’s still a good amount of companies left including a ton of retail companies which may show weakness in their earnings growth this year.

The bottom line is that it looks like we’re finally back to growth again which is great for the stock market after a few years of muted earnings. Q2 guidance is largely negative with 70% of companies that issued guidance going negative versus expectations but that’s the standard and actually below the 5-year average of 74% so it’s not anything to worry about.

If this level of growth can continue into Q2 and for all of 2017 then this stock market may still have a ways to go before we see a pause and yet I can’t help but be wary whenever we see such a long term sustained growth cycle even if it means great things for my portfolio.

Let’s take a look at how my portfolio did this month. Continue reading “My portfolio – May update”

My portfolio – April update

The markets took a brief respite from all the gains as the S&P 500 was down for the first time since October 2016.

It looks like people are still trying to digest the failed(and possibly soon resurrected) healthcare bill and what it means for potential tax reform down the line. Syria added another complication to the risk profile this month leading to a small haircut in US stock values.
I’m actually quite surprised that the market reaction was so muted which leads me to believe that there’s still momentum in the market that wants it to keep going up. The fact that the US 10yr is still only at 2.38%(that’s well up from October but still lean) means that the stock market still seems like the smartest place to keep your money.
Q1 2017 earnings calls are almost here and we’ll start seeing those results within the next couple of weeks.
The current estimated growth rate for Q1 is 8.9% and that would be great to see as it would be a return to consistent growth in a market that has been anemic for many years. That number however is down from a 12.5% growth estimate for Q1 as of December 2016 and shows that the outlook has gotten slightly less rosy in the last few months.
I think it’ll be an interesting batch of results and I’m eager to see where the companies guide for FY 2017 and going into 2018 as the growth projections are pretty optimistic right now as they usually are this time of year. If we see another flat year like we have the past few years then the market might have to take a small pause until growth returns which won’t be great for short-term results.
I do have some cash on the side so I’m always on the look out for some values and could potentially pick something up if the market over-reacts to some short term misses.
I’ve always got money flowing into the market with regular monthly contributions so any short term drops for the overall market don’t worry me and actually benefit those with a long time frame as I can buy in at lower prices which bodes well for long-term returns.
With all that said, let’s take a look at how my portfolio did this month. As a reminder, I was just a few thousand dollars shy of 400k last month so let’s see if I was able to cross that threshold this month.

Continue reading “My portfolio – April update”