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!

My portfolio now sits at $448,776.58!

That’s 12 straights months of growth, a full year! The portfolio was up 2.51% this month and grew $10,998.11 which means that’s 6 months out of 12 where the portfolio has grown by more than $10,000.

My individual stocks continue to perform well although they weren’t quite the drivers of the growth this month. Still, my three biggest holdings are up pretty big year to date. United HealthGroup is up over 23%, Apple is up nearly 37% and Markel is up nearly 14%.

It was my REIT and international holding that drove the strong performance this months, both return over 2% for the month. Combine that with continual contributions and you have a recipe for solid results!

My taxable accounts which hold all of my individual holdings and some ETFs were up 2.2%. My tax-advantaged accounts which get the majority of my contributions and hold most of this month’s strong performers were up 3%.

Cash was down 0.9% and makes up 6.7% of my portfolio.

I’m thrilled with how the portfolio is performing and am awed by how close to 500k I’m getting. The market has been skittish lately especially when there’s some North Korean news and it’s always possible we see a sizable pull back at these valuations but if that doesn’t happen, it’s likely I get to 500k sometime next year which would be great.

Let’s take a look at my asset allocation.

I went into this month with some issues with my small and mid-cap allocation and that continues this month. All of my money during the last month has gone into those two classes but strong performance in other areas has kept them below target and drove my bonds below target yet again.

Here’s the breakdown versus target in each asset class.

• US Large Cap at 43.00% versus 42.5% target(+0.50%)
• US Mid Cap at 9.61% versus 10% target(-0.39%)
• US Small Cap at 9.7% versus 10% target(-0.30%)
• US REIT at 10.05% versus 10% target(+0.05%)
• International Developed at 15.27% versus 15% target(+0.27%)
• International Emerging at 5.01% versus 5% target(+0.01%)
• US Bonds at 7.36% versus 7.5% target(-0.14%)

The S&P 500 had positive results this month but small-caps and mid-caps were pretty much flat and while all of my money flew into those funds, they’re still lagging the other classes which had positive returns for the month. I’ve actually sold off some large cap holdings(ESPP stock) and moved them into other areas but that still remains overweight.

REITs and international stocks also grew which sent bonds below target again.

That means next month’s plan won’t be much different from last month’s.

• Contributions flow into small-cap and mid-cap stocks as well as bonds

I probably won’t be selling anything off and will just fix these areas with contributions and purchases. There’s always going to be shortfalls as certain areas outperform others but that’s the point of this asset allocation as it allows me to buy classes that are a better value any given time.

That’s it for this update. It’s been an awesome year for the portfolio. The portfolio has grown by more than $100k since the September update in 2016 driven by 12 straight months of portfolio growth!

How was the latest month for your portfolio?