It’s the first update of the new year and the latter part of 2016 as well as the first week of 2017 continued to show positive returns.
The S&P 500 was up 0.35% since the last update; nothing major but anything above zero is good to see. I’ve talked about valuation in the last portfolio update so I won’t reiterate that here but we’ll soon get a big group of Q4 reports that will likely give some clearer insight into what’s expected for 2017. If Q4 earnings show growth, it’ll be the first time the S&P 500 index has show growth in two consecutive quarters since Q4/Q1 2014/2015 which would be good news and might bode well for 2017 especially if guidance is favorable as well.
December was a three paycheck month for me which meant some additional savings flew into the account. I maxed out my 401k this year as well as my HSA and still have my 2016 ROTH IRA contribution to make which means solid near term portfolio growth due to contributions although I probably won’t make the 2016 contribution till I get my bonus in a month or two.
I’m looking forward to see what 2017 brings with it and hope we can continue the run we’ve seen in the past few years. I’d just like to see some earnings growth this year to bring some of the valuations back into reality as another year of flat earnings will make it difficult for the market to grow a lot with where it’s priced right now.
My portfolio grew over $70,000 in 2016 through contributions and market appreciation(25% growth!) and I collected just north of $7000 in dividends. At this pace I’ll be retired in no time! Note that this is comparing the 12/11/2016 update to the 2015 update in the same month. If I compare today’s update to the January update in 2016 then the growth is actually north of 30%!
I know every year won’t be as successful as this and we’ll have some pain throughout the journey but it’s nice to see my first year tracking my portfolio be so fruitful and I hope the long-term journey is more of the same.
The holidays have made for a quieter than usual market than the previous month and it was nice to take a break from the hustle-and-bustle of work and relax. I hope you all had a similar break and enjoyed the time with your loved ones but now it’s time to get back to the grind and grow that portfolio to help achieve our goals.
Let’s take a look at the portfolio this month.
- US Large Cap at 42.5% versus 42.5% target(-0.04%)
- US Mid Cap at 10.5% versus 10% target(+0.49%)
- US Small Cap at 10.3% versus 10% target(+0.27%)
- US REIT at 9.7% versus 10% target(-0.28%)
- International Developed at 14.6% versus 15% target(-0.38%)
- International Emerging at 4.7% versus 5% target(-0.25%)
- US Bonds at 7.7% versus 7.5% target(+0.19%)
- 401k contributions into international equities
- ROTH IRA contributions in international equities and REITs
- Cash pile at 8.2% – invest in anything that looks fairly valued
Earnings season is about to kick into high gear so there might be some overreaction to earnings announcements that could potentially create some solid values.
My savings rate update is next in line and then I’ll develop my 2017 goals once I see exactly where all the things I track came in as the 2017 goals will be pretty simple; improve on 2016.