Investing,  Portfolio Updates

My portfolio – April update – small market downturn

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

It looks like people are still trying to digest the failed(and possibly soon resurrected) healthcare bill. The other question is 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. That 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. We’ll start seeing those results within the next couple of weeks.
The current estimated growth rate for Q1 is 8.9%. 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. Apparently, 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. 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. I 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. They 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.

market downturn
The portfolio has grown for the 7th straight month which is awesome to see and I’ve now broken the 400k barrier!
The portfolio total stands at $402,797.66! That’s a 1.47% increase over last month.
It’s crazy to see the portfolio grow so much since I started tracking this. You can see the great progression on the graph and today’s total is 85k+ more than the first month on the graph. It’s more than 100k greater than when I first started tracking this.
That’s more money than I’ve made in that time frame and shows the power of a bull market combined with regular contributions!
It’s impossible to discount the great power of the rising market in this scenario. My last down month was in September which is a crazy streak of good results.
One thing I always have to keep in mind is that such results are not going to last forever and while 300k was a great milestone(broken in the 3/13/2016 update) and so is 400k, it might slope back down if the market turns the other way.
I’m prepared for that and believe my risk tolerance is high enough to weather any storm. I’ll keep buying if it falls but I still think it’s something that investors need to remind themselves as they ride this wave up. It’s a great feeling to see the portfolio rise but waves can always come down and one has to be ready for that.
The S&P 500 returned -0.31% in this month. Most of my growth this month was driven by contributions as I used my tax refund and some cash to get near the max on my 2016 contribution in the ROTH IRA. I still have a little bit left before I max out and I plan to do that next week.
My taxable accounts grew 0.4% this month without a lot of contributions. Individual securities and some of my dividend ETFs outperformed the market which was nice to see but it was still an anemic month in my individual stocks.
My tax-advantaged accounts grew 2.8% and that was due to continued 401k contributions and my ROTH IRA contribution. Solid performance in the overseas markets versus the US also helped.
Cash was a bit down this month and now makes up 7.96% of my overall portfolio. That is below the 10% cash maximum allowed by my investment strategy.
It’s awesome to see 400k broken and I’ve got my eyes set on 500k next but I’m certainly not discounting the possibility of revisiting 300k if the market doesn’t cooperate.
Most of my Roth IRA money went into REITs which were under represented in my asset allocation so I’m hopeful that went a long way in remedying that. Let’s take a look at that now.
asset class
This looks really good! I’m almost right on top of each asset class which is awesome to see with how far I was when this all started.
Here’s the breakdown of each asset class versus the target.
  • US Large Cap at 42.53% versus 42.5% target(+0.03%)
  • US Mid Cap at 10.19% versus 10% target(+0.19%)
  • U.S. Small Cap at 9.83% versus 10% target(-0.17%)
  • US REIT at 10.01% versus 10% target(+0.01%)
  • International Developed at 15.12% versus 15% target(+0.12%)
  • International Emerging at 4.94% versus 5% target(-0.06%)
  • US Bonds at 7.39% versus 7.5% target(-0.11%)
It’s crazy to see how far we’ve come and I’m not sure I can get that much closer than I am right now. The most out of target asset class is only 0.19% away!
There’s always going to be fluctuation in where I am versus target with how asset classes move each month. I’m very happy with where I’m positioned right now.
One way of illustrating that fluctuation is that I was 0.89% above target in the US large caps last month. Wow I’m right on track there due to the fact that my contributions went elsewhere and the US market did poorly.
REITs are finally back on track with the IRA contribution. Wow I just have to work on maintaining this month to month.
The plan for next month is as follows.
  • Buy US bonds in my ROTH IRA. US small cap in my 401k. And international emerging in my taxable account(no good emerging fund in my 401k).
  • Cash pile at 7.9%, look for value.
It’s nice to see REITs finally on target. Bonds will get a bump soon. That bodes well for my 2017 dividend goals. Higher yielding buys always help that.
That’s it for this month. It’s been another great month and I look forward to see what the market brings in the future.
It’s vacation time in a few weeks. I can relax, eat some good food and visit some sights. I’m looking forward to that as well!
That may delay some of my posts(side-hustle update). I plan to do no work at all during my vacation. Yes, that also means pausing my daily writing. Maybe, I’ll try to get some of that in on the plan ride over.
How was your month? Did contributions offset the poor market performance or were you invested in securities that weathered the small dip in the S&P 500 well?

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