The time has come for my monthly portfolio update. At the end of every month, I will update my portfolio and comment on any changes. I do that for accountability and also so you may glean some ideas on how I allocate my capital. You have the opportunity to learn from what I do well so you can do the same, as well as what I do poorly, so you will not have to repeat my mistakes.
Follow my real-time portfolio here. Below is a snapshot of my stocks and ETFs portfolio as of 7/31/18:
Follow my real-time portfolio here. Below is a snapshot of my stocks and ETFs portfolio as of 7/31/18:
My transactions in July are as follows:
Purchases
This was a heavy buying month for me, not because I like the current stock market valuations, but because I was flush with cash after getting my annual bonus of $23,400 after deduction for taxes. The extra cash had to buy something. That something mostly went to quality stocks trading near 52-week lows such as MCK, which made new 52-week lows repeatedly as I kept trying to catch the falling knife.
I also put a lot into IJR, which has now become my favorite ETF. It has a low expense ratio of 0.07%, which while not the lowest in its category, is preferable to its cheaper alternatives like SCHA because IJR is higher quality and more tilted toward small cap stocks. It is hard to pick individual small cap stocks, so IJR is a good proxy to take advantage of the small cap premium. The fact that IJR has a significantly lower dividend yield than the general market is a plus, because I'm in a relatively high tax bracket and gearing more toward deferred capital growth beats getting taxed on dividends right now.
I initiated two new buys this month: MMM and CBOE, both high quality stocks near 52-week lows. MMM is top quality. CBOE is my kind of stock with good growth potential and low dividend yield.
The small transaction value buys are part of my monthly investment plans and DRIPs.
Sales
None.
Overall my transactions this month are up 0.67% of $27,394.16 net cash inflow. My timing was suboptimal this month, but hopefully over time it will even out.
Here is how my assets, liabilities, and net worth have changed over the past month:
Cash: Most of this sits in my savings and brokerage accounts, with a little bit in checking account just enough to pay bills. My cash balance built up this month as I did not invest all my cash inflow from work. I anticipate needing some cash to pay off about 9k of credit card balance whose 0% promo rate is expiring next month.
Bonds: Most of my bonds are in Groundfloor limited recourse obligations (LROs), which are senior secured balloon loans for house flippers. I receive low double digit returns on these loans, which is pretty good. I still have a little over 1k in LendingClub loans, which I slowly winding down (no new investments and withdrawing any cash from interest and principal repayments). I started an investment of $2,400 in Upstart unsecured P2P loans, which accounted for much of the cash inflow this month. Upstart allows funding by credit card for the initial account funding, which I took advantage of as I needed to spend $2,400 to take advantage of a 3% cash back credit card offer. Hopefully the Upstart loan investments will fare better than my dismal returns in LendingClub loans. I also hold a trivial amount in bond ETFs as part of a robo portfolio experiment with WiseBanyan.
Stocks: This is the bulk of my net worth, held in taxable accounts to fund my early retirement. Some are held in brokerage accounts while others are in direct stock purchase plans (DSPPs). This month is the month marks a significant milestone as my taxable stock portfolio broke the million dollar mark! Yay!
Tax-deferred retirement account: This is my retirement account associated with my work, not to be touched till after age 59 1/2. Currently it is invested all in an index fund that tracks the EAFE. I could also have invested in US stock indices and bonds, but these latter options offer poor return prospects compared to foreign stocks at this point, so I decided to keep it simple and just do 100% in EAFE for overall diversification, given that foreign stocks tend to be less tax efficient to hold in taxable accounts. EAFE again underperformed US stocks this month.
Roth IRA: This is currently all invested in IJR to keep things simple.
Home: Home value is from Zillow's Z-estimate, taken at the end of each month. Apparently my home value dropped 0.91% this month, but it is still above my purchase price a few months ago. Can't complain. In fact, I would prefer my home to drop in value along with the entire neighborhood, so hopefully my property tax assessment will drop as well.
Gold: I currently have 10.77 troy oz of gold coins as part of my coin collection. Each month I multiply that by the spot gold price. I do not plan on adding to this any time soon, unless gold breaks below $800, then I will likely add some. If below $500, I will almost certainly add some. I do not plan on ever selling though.
Other non-current assets: None at the moment to be conservative. I could include assets like furniture, car, clothes, books, stamps, coins, etc. However, since these assets are not income-producing and can also be a liability as some of them require cash expenditure to replace them, I choose not to include them here.
Current liabilities: These are accounts I owe and due within 12 months. I took advantage of interest free loans from 0% APR promo credit card offers.
Student loan: This is loan I took out for college at a low 2.5% interest rate. I had a variable interest rate until I consolidated my student loans last year and locked in a fixed 2.5% rate for 10 years in a graduated repayment plan. I am certainly in no hurry whatsoever to pay it back given such low interest rates. Stocks are expected to generate much higher returns. The extra leverage this affords helps to grow my money faster. My currently monthly payment is only $35.70, of which the cash (outflow) shown is applied toward principal which lowers the loan balance.
Other liabilities: None at the moment.
Net worth: Overall, my net worth increased 6.25% to $1,389,263.07, due to net cash inflow (2.87%) and investment gain (3.38%). As it stands, it is less than 0.8% from my goal of $1,400,000 for 2018 set at the beginning of this year. Barring a market decline I should reach my goal pretty soon.
Below is a chart of my net worth since I started tracking on a monthly basis. Due to my aggressive stock allocation, my net worth has mostly mirrored the stock market, which has essentially been going in a straight line, except for a sharp run-up in January this year, followed by a correction in February, then a gradual recover starting in March. Right now, the decade-old bull market appears to have resumed its upward trajectory.
My monthly performance against the S&P 500 is shown below:
July was another good month for me relative to the index, though only by a little. YTD I am now up 7.01% while the index is up 5.95%. July turned out to be a very bullish month for the stock market, contributing about half of the stock return YTD.
Thanks for reading!
This was a heavy buying month for me, not because I like the current stock market valuations, but because I was flush with cash after getting my annual bonus of $23,400 after deduction for taxes. The extra cash had to buy something. That something mostly went to quality stocks trading near 52-week lows such as MCK, which made new 52-week lows repeatedly as I kept trying to catch the falling knife.
I also put a lot into IJR, which has now become my favorite ETF. It has a low expense ratio of 0.07%, which while not the lowest in its category, is preferable to its cheaper alternatives like SCHA because IJR is higher quality and more tilted toward small cap stocks. It is hard to pick individual small cap stocks, so IJR is a good proxy to take advantage of the small cap premium. The fact that IJR has a significantly lower dividend yield than the general market is a plus, because I'm in a relatively high tax bracket and gearing more toward deferred capital growth beats getting taxed on dividends right now.
I initiated two new buys this month: MMM and CBOE, both high quality stocks near 52-week lows. MMM is top quality. CBOE is my kind of stock with good growth potential and low dividend yield.
The small transaction value buys are part of my monthly investment plans and DRIPs.
Sales
None.
Overall my transactions this month are up 0.67% of $27,394.16 net cash inflow. My timing was suboptimal this month, but hopefully over time it will even out.
Here is how my assets, liabilities, and net worth have changed over the past month:
Cash: Most of this sits in my savings and brokerage accounts, with a little bit in checking account just enough to pay bills. My cash balance built up this month as I did not invest all my cash inflow from work. I anticipate needing some cash to pay off about 9k of credit card balance whose 0% promo rate is expiring next month.
Bonds: Most of my bonds are in Groundfloor limited recourse obligations (LROs), which are senior secured balloon loans for house flippers. I receive low double digit returns on these loans, which is pretty good. I still have a little over 1k in LendingClub loans, which I slowly winding down (no new investments and withdrawing any cash from interest and principal repayments). I started an investment of $2,400 in Upstart unsecured P2P loans, which accounted for much of the cash inflow this month. Upstart allows funding by credit card for the initial account funding, which I took advantage of as I needed to spend $2,400 to take advantage of a 3% cash back credit card offer. Hopefully the Upstart loan investments will fare better than my dismal returns in LendingClub loans. I also hold a trivial amount in bond ETFs as part of a robo portfolio experiment with WiseBanyan.
Stocks: This is the bulk of my net worth, held in taxable accounts to fund my early retirement. Some are held in brokerage accounts while others are in direct stock purchase plans (DSPPs). This month is the month marks a significant milestone as my taxable stock portfolio broke the million dollar mark! Yay!
Tax-deferred retirement account: This is my retirement account associated with my work, not to be touched till after age 59 1/2. Currently it is invested all in an index fund that tracks the EAFE. I could also have invested in US stock indices and bonds, but these latter options offer poor return prospects compared to foreign stocks at this point, so I decided to keep it simple and just do 100% in EAFE for overall diversification, given that foreign stocks tend to be less tax efficient to hold in taxable accounts. EAFE again underperformed US stocks this month.
Roth IRA: This is currently all invested in IJR to keep things simple.
Home: Home value is from Zillow's Z-estimate, taken at the end of each month. Apparently my home value dropped 0.91% this month, but it is still above my purchase price a few months ago. Can't complain. In fact, I would prefer my home to drop in value along with the entire neighborhood, so hopefully my property tax assessment will drop as well.
Gold: I currently have 10.77 troy oz of gold coins as part of my coin collection. Each month I multiply that by the spot gold price. I do not plan on adding to this any time soon, unless gold breaks below $800, then I will likely add some. If below $500, I will almost certainly add some. I do not plan on ever selling though.
Other non-current assets: None at the moment to be conservative. I could include assets like furniture, car, clothes, books, stamps, coins, etc. However, since these assets are not income-producing and can also be a liability as some of them require cash expenditure to replace them, I choose not to include them here.
Current liabilities: These are accounts I owe and due within 12 months. I took advantage of interest free loans from 0% APR promo credit card offers.
Student loan: This is loan I took out for college at a low 2.5% interest rate. I had a variable interest rate until I consolidated my student loans last year and locked in a fixed 2.5% rate for 10 years in a graduated repayment plan. I am certainly in no hurry whatsoever to pay it back given such low interest rates. Stocks are expected to generate much higher returns. The extra leverage this affords helps to grow my money faster. My currently monthly payment is only $35.70, of which the cash (outflow) shown is applied toward principal which lowers the loan balance.
Other liabilities: None at the moment.
Net worth: Overall, my net worth increased 6.25% to $1,389,263.07, due to net cash inflow (2.87%) and investment gain (3.38%). As it stands, it is less than 0.8% from my goal of $1,400,000 for 2018 set at the beginning of this year. Barring a market decline I should reach my goal pretty soon.
Below is a chart of my net worth since I started tracking on a monthly basis. Due to my aggressive stock allocation, my net worth has mostly mirrored the stock market, which has essentially been going in a straight line, except for a sharp run-up in January this year, followed by a correction in February, then a gradual recover starting in March. Right now, the decade-old bull market appears to have resumed its upward trajectory.
My monthly performance against the S&P 500 is shown below:
Thanks for reading!
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