Q1 2018 Asset Allocation and Net Worth Update

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The market decided to find some volatility!  It was a wild quarter if you like to check your accounts daily (confession: I do).

Asset Allocation:

Passive Index Funds:  63.1%.   I might win the award for most tickers owned of passive index funds.  Vanguard, iShares, Fidelity, employer picked S&P 500 funds.).  Index funds will be the purchase of choice going forward and the ultra-low cost Fidelity’s Total Market Index is my preferred fund.

Individual Stocks:  16.9%.   This number has been trending down nicely.  This decline gave me the opportunity to sell a couple of holdings at the dip and buy something else.  Most of these stocks are held in a regular account and the tax implications of moving them are just top painful to swap while still working.

Active Mutual Funds:   10.1%.  Substantially all of this is in the Vanguard Wellington Fund, which provides an actively 65%/35% Stock/Bond portfolio for an expense ratio of 0.25%.  I’ve debated exchanging this for an index fund, but I hold it inside a Fidelity account.  If I ever wanted to buy it again, I would have to open an account with Vanguard.

REITs:  9.1%.  There were huge discounts this quarter on two of my favorite REITs, allowing me to push this allocation up another 3%.   Since this asset class encompasses a wide variety of companies, I choose to hold two REIT stocks.   These stocks represent companies with 300+ different properties with a diverse tenant mix.   I picked up some shares of both close to the bottom with some limit orders set during the volatility.   One of the REITs is paying 7.78% and the other pays 6.01%.

Cash:  Less than 1%.  The market went on sale this quarter and I have a habit of throwing money at a bear until it goes away.   The only scary part of this strategy is the bear may keep running right at you after the cash runs out!

Hopefully the second quarter calms down and the market start their slow trek up again.  I’m looking forward to earnings season, investors can focus on the strong fundamentals of the economy instead of political background noise.

Net Worth:  $1,584,000

The S&P 500 settled down 1.22% for the year and our accounts had roughly the same performance.  There was no calm ride either.  Anyone invested in stocks probably hit an all-time high in net worth in late January, then the roller coaster began.

The market loss for the quarter was offset my contributions and some small gains I picked up from pushing some idle cash into the market.   Something tells me that “stocks plummet” as breaking news in the mainstream outlets means its time to buy.   I remember the moment in February when “Dow Falls 1100” starts buzzing as breaking news on everyone’s phone.

Writing/Blog Update:

Q1 was the second quarter for the Blog’s existence and saw a lot of momentum.  In January, ESI Money granted me a spot in the Millionaire Interview series, Early Retirement Now ran a case study on two different retirement date scenarios, and my musing around One More Year was picked up by Physician on Fire and ChooseFI.  I actually had some comments to reply to!

The market went wild in February and I mused about the psychological effects of a market decline.  It was picked up by Rockstar Finance a few weeks later as the featured article.  In one day, I had more page views than I’ve seen in entire months!

I’ve realized some of my best creative time is when I’ve had time away from work.  The day job had a number of unique challenges in the first quarter and  destroyed some of the creative time.   Working on the 20+ drafts in my archive plus theme, blog layout, and mailing list are on the “need to do” list.  The site has a ways to go, but is a work in progress.


8 Replies to “Q1 2018 Asset Allocation and Net Worth Update”

  1. Holy crap! Great month for your money, despite some of the market tumbles.
    I’m the worst at getting most of my net worth in cash instead of investing. That’s impressive you keep so little. You’re a brave little toaster. Why is investing so intimidating?!

    1. Thanks for reading! That’s a skill I learned from 2009, went way too conservative when I should have been throwing money at the market. 2012 and 2016 helped show it probably works out.

      There’s some research that says its 3x more painful to loose a dollar in the market than the joy gained fro making a dollar. I believe it!

  2. I’m pretty happy to say that in 2017 I kicked my daily portfolio checking habit successfully. The market’s steep climb helped I’m sure, but I’ve successfully ignored my Personal Capital app even as the markets are jumping around this year.
    Congrats again on the Rockstar Feature!

  3. Mr. Shirts,

    This is awesome. You guys are almost at the goal.

    Is there a particular reason for having so many different passive index funds?

    I just have VTSAX (mainly because it’s simple – just add money there every month), but I’m thinking of expanding a bit into REITs as well.

    Any good sources for looking into REITs?

    Thanks and congrats on all the progress!

    1. I wish I had a great answer on “why”, it kind of happened that way. I had two situations that required an in-person office ten years go (work related stock certificates), so I used Fidelity instead of Vanguard for my personal account. I then spent way too much time being a stock picker vs. indexing. I slowly moved into Index Funds and you can buy ITOT and FSTVX commission free at Fidelity, which are equivalent to VTSAX. I then have a strategy to supplement VTSAX with some small and mid-cap indexes plus a few REIT funds.

      I’ll have an opportunity to consolidate my holdings when I rollover my work 401k, but I still own way too many tickers. REITs aren’t easy, I’ve owned two tickers in my investing career, one I found 15 years ago and one I found 3-4 years ago. They’re essentially mutual funds themselves, but companies can wildly vary with their risk. My two holdings are EPR and STAG.

      1. Makes sense.

        I’ve been thinking a bit about ways to increase my annual returns by buying something on top of VTSAX. But I guess what I’m really looking for is a lottery ticket 😉 I like the simplicity of just owning one fund for now.

        Gotta remind myself to be patient!

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