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 10/31/18:
My transactions in October are as follows:
Purchases
October was another busy month for buying stocks. My portfolio took a beating this month along with the stock market, which appears to be starting a down trend thanks to the Fed raising interest rates. I added to many of my holdings as they approached 52-week lows.
BEN was bought due to put option assignment.
BEN was bought due to put option assignment.
The small transaction amount buys are part of my monthly investment plans and DRIPs.
Sales
I sold short the 3X inverse ETFs TZA, SQQQ, and EDZ as the market went down. My timing was bad though, as they continue to rise as the stock market continued to go down.
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 the bills. My cash balance decreased slightly this month as I continued buying stocks to reduce cash drag. The moving target is around $10-20k cash for dry powder in case of a market downturn.
Bonds: Most of my bonds are in Groundfloor limited recourse obligations (LROs), which are senior secured balloon loans for house flippers. I earn low double digit returns on these loans, which is pretty good, considering that most of these loans have a short term of one year or less. Most of the cash inflow this month was from adding to this account. I still have around 1k in LendingClub loans, which I'm slowly winding down (no new investments and withdrawing any cash from interest and principal repayments). I also started an investment of $2,400 in Upstart unsecured P2P loans in July 2018. 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 and store wealth. Most are held in brokerage accounts with the rest in direct stock purchase plans (DSPPs). My stocks took a 7% beating this month due to the down market.
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.
Roth IRA: This is currently all invested in IJR to keep things simple. IJR is probably the best investment with all the desired characteristics: diversified, small cap, growth, quality, low cost. However, it did not perform too hot this month, going down more than 10%.
Home: Home value is from Zillow's Z-estimate, taken at the end of each month. Apparently my home value dropped another 0.43% this month. Fine with me, as I am not planning to sell in the short term.
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, which I will pay in full when they expire.
Student loan: This is loan I took out for college, now consolidated at a low 2.5% fixed 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 non-current liabilities: None at the moment.
Net worth: Overall, my net worth decreased 5.98% to $1,347,856.23 due to investment loss (-7.03%) partially offset by net cash inflow (1.05%).
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.
My monthly performance against the S&P 500 is shown below:
This year is not looking good for me. The past 4 months has been brutal for me underperforming the index. Foreign stocks and small caps have been a drag in these latter months.
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