The Half Million Dollar Portfolio?
Less than $500 separated me from 500k before the market volatility in February shaved 16k off my total. However, since then, the market has turned around. We’re now back to a positive return for the year and things are finally looking good for me to cross that threshold. I might now have a half million dollar portfolio!
The market turning positive is a welcome sign to many investors. It reminds me a bit of what happened in February of 2016. Volatility spiked due to fears around China, oil prices and uncertainty around rates. Just like last month, that caused stock prices to fall. In the case of 2016, those falling prices turned out to be amazing buying opportunities. The stock market never looked back from the lows of 2016 until it hit the recent speed bump. Whether that turns out to be the case here is still an unknown.
What’s interesting about these dips is how quickly they’ve corrected. We see a quick dip, it doesn’t last long and then it starts rising again. That’s great for people who like seeing their portfolio go up and up on paper. It’s not great for people looking to keep buying stocks at a good valuation as a long term hold. A rallying stock market usually means things are looking good and there are some good things happening here. The economy is strong and earnings are growing at the best clip since 2011.
What interests me is how the market and investors and I will react to a prolonged downturn. Quick bounces are easy to get used to as that has been the case for quite some time. Investors keep buying whenever they see a drop because they “know” it’ll recover pretty quickly. The question is what will happen that one time in the future where the recovery takes a few years. I’m not complaining about rising prices but as a long term investors I’m always looking forward.
It’s nice to see these rising totals each month but the cynical part of me knows that it can’t last. Since I’m in it for the long run, I’m not overly concerned nor am I making any specific moves. I’ll continue to stick with my asset allocation, contribute monthly and buy things that my asset allocation tells me to buy. If we see a recession, I’ll do the same. Until then, I’ll enjoy seeing the numbers grow on paper.
Market returns will very likely propel me beyond the new milestone but contributions play a big part as well. My bonus was paid out in February and my 401k contribution for that paycheck was bumped to 50% meaning a big boost in money flowing into the market for this month. Combine that inflow with rising stock prices and baby, you got a stew going. Let’s check if that stew bubbled up to 500k this month.
As a reminder, my portfolio was at $482,642.91 last month. Continue reading “Portfolio Review – March 2018 – The Half Million Dollar Portfolio”