My portfolio – August update
It’s time for another exciting portfolio 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.
My portfolio now sits at $437,778.47!
That is 11 straight months of growth which I’m super excited about. The portfolio grew 2.13% this month and was just shy of another 10k growth as the increase against last month is just north of $9000. That’s an awesome results in a month where the S&P 500 didn’t grow a ton and my contributions were low.
The growth is mostly due to my individual stock holdings which outperformed the market substantially after excellent earnings and guidance. United HealthGroup, my largest holding was up 2.69% since the last portfolio update. Apple, my second large individual holding was up 9.22% and Markel, my third was up 6.33%. Those kind of results were more than enough to offset and laggards of which there were some including my mid cap and small cap index funds which was actually down since the last portfolio update due to the increase in volatility in the market which hits the smaller companies hard.
My taxable accounts which hold all of my individual holdings were up 4.24% this month while my tax-advantaged accounts were up 1.3%.
Cash didn’t change much and now makes up 6.92% of my portfolio.
Let’s take a look at my asset allocation.
I actually moved some money out of my large cap fund into my small cap fund during this month and the large caps got even more overweight this month due to strong in that area against all other asset classes.
Here’s the breakdown by each asset class.
- US Large Cap at 43.41% versus 42.5% target(+0.91%)
- US Mid Cap at 9.60% versus 10% target(-0.40%)
- US Small Cap at 9.65% versus 10% target(-0.35%)
- US REIT at 9.7% versus 10% target(-0.30%)
- International Developed at 15.17% versus 15% target(+0.17%)
- International Emerging at 4.96% versus 5% target(-0.04%)
- US Bonds at 7.50% versus 7.5% target(+0.00%)
Smaller companies lagged so mid-caps, small-caps and REITs are behind target and will need some love in the coming months. International isn’t too far off on either end and bonds are back on track which is good to see.
The main culprit here is large caps and while I may play around with my assets in my 401k to help remedy that a bit, I don’t want to sell anything in my taxable accounts since I still like all the companies I own and don’t want the tax bill. The plan going forward will be to make small moves in tax-advantaged accounts and buy mainly REITs and small-caps with my cash and contributions.
I think there’s potential for some more volatility in the coming months which will only serve to make the divide between large caps and smaller stocks bigger as the smaller stocks react more violently to any external factors. We’ve seen that in the last week and will certainly see more in the future.
The plan for next month then is as follows.
- Contributions will flow into US small caps, US mid caps and REITs
- Move some tax-advantaged large cap cash into the above asset classes
That’s it for this month’s update. The volatility has sent some of my asset classes in the wrong direction but future contributions and some small moves will help remedy that. It’s great to see 11 straight months of growth and I wonder if I can continue that for a full year with the next month’s portfolio update.
How was the latest month for your portfolio?
Congrats on another month of growth TITM. You are sprinting towards the $500k mark and I love seeing the number continue to climb higher. Cannot wait to see your September dividend total and the amount of income you will receive from those funds!
Thanks Bert! I’m pretty excited about how close I am to 500k although that can change quickly depending on how the market treats us.
I’m definitely looking to see how September looks in dividends although June was so high and had some payments from funds I wasn’t expecting, I’m not sure if September can match it!
Congrats on 11 months of straight growth. The market is killing me, I cannot believe it’s still going up.
It’ll happen when there’s no real solid alternative investments! The earnings haven’t been bad either so that’s been fueling further growth.
Great to see your progress, congratulations on allmost reaching the $500k!
Awesome work on building up a portfolio edging in on $500k TITM. That’s impressive. It’s reporting season in Australia too and I think my (small) portfolio is up slightly, although I’m running an experiment in not checking it so often, so don’t really know. The main holdings did well though so unless there was a real laggard, it will be up.