Portfolio Update October 2016: Net Worth Edged Up Slightly to $826,383.39

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.

My transactions in October are listed as follows:

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Stock	Action	Cost	Price per share	% of Portfolio
DIS	Add	$2,150.00	$92.15	0.26%
NKE	Add	$2,150.00	$51.90	0.26%
VFC	Add	$2,150.00	$54.77	0.26%
GILD	Add	$2,029.92	$75.18	0.25%
CVS	Add	$1,905.31	$86.61	0.23%
FOSL	Add	$1,885.13	$27.32	0.23%
NVS	Add	$1,700.00	$76.72	0.21%
BBBY	Add	$1,499.00	$42.83	0.18%
RHBBY	Add	$1,490.50	$29.81	0.18%
KO	Add	$1,200.00	$41.76	0.15%
AN	Add	$1,163.00	$46.52	0.14%
SNY	Add	$1,100.00	$38.64	0.13%
HSIC	Add	$1,050.00	$150.00	0.13%
PII	Add	$1,050.00	$75.00	0.13%
DHR	Add	$1,010.10	$77.70	0.12%
SRCL	Add	$1,004.25	$77.25	0.12%
CTSH	Add	$1,000.00	$50.00	0.12%
FOX	Add	$1,000.00	$25.17	0.12%
RL	Add	$1,000.00	$100.63	0.12%
VIAB	Add	$1,000.00	$37.69	0.12%
BEN	Add	$978.75	$36.25	0.12%
DLTR	New Buy	$920.52	$76.71	0.11%
NVO	Add	$522.73	$40.21	0.06%
AXP	Add	$500.00	$60.02	0.06%
WTR	New Buy	$500.00	$29.72	0.06%
VMI	Add	$212.29	$127.73	0.03%
BDX	Add	$208.35	$174.99	0.03%
BRKB	Add	$200.00	$143.15	0.02%
EMR	Add	$200.00	$52.55	0.02%
NSC	Add	$200.00	$91.37	0.02%
WMT	Add	$200.00	$72.07	0.02%
XOM	Add	$200.00	$86.64	0.02%
MCD	Add	$150.00	$111.93	0.02%
PEP	Add	$120.36	$107.36	0.01%
BUD	Add	$100.00	$128.97	0.01%
EXC	Add	$100.00	$33.00	0.01%
INTC	Add	$100.00	$37.64	0.01%
MSFT	Add	$100.00	$57.61	0.01%
NNN	Add	$100.00	$47.13	0.01%
SON	Add	$100.00	$52.85	0.01%
UL	Add	$100.00	$47.98	0.01%
PEG	Add	$58.97	$42.12	0.01%
PPL	Add	$25.78	$34.56	0.00%
SJI	Add	$12.14	$28.46	0.00%
OGS	Add	$10.16	$61.58	0.00%
VTI	Add	$5.41	$110.43	0.00%
VEA	Add	$2.98	$37.21	0.00%
VWO	Add	$0.68	$37.80	0.00%
LQD	New Buy	$0.29	$120.83	0.00%
VGIT	New Buy	$0.26	$65.82	0.00%
TIP	New Buy	$0.21	$116.67	0.00%
SJNK	New Buy	$0.13	$26.80	0.00%
VNQ	New Buy	$0.07	$84.34	0.00%
CTL	Sold Out	-$850.48	$31.50	-0.10%
VALE	Sold Out	-$2,137.45	$6.25	-0.26%
PNY	Sold Out	-$2,511.18	$60.00	-0.31%
	Bought	$34,467.29		4.19%
	Sold	-$5,499.11		-0.67%
	Net	$28,968.18		3.52%

Purchases
This month, I initiated 2 significant new positions in Dollar Tree and Aqua America and added significant amounts to numerous others, most of which are attractively priced stocks near 52-week low with low dividend payout. Total net purchase this month amounted to $28,968.18. This brought my cash in brokerage accounts down to 18K, or a little over 2% of my portfolio, which will decelerate my stock buying spree next month.

The new buys in tiny amounts are from my wisebanyan account I recently opened for an account opening bonus. It is not an easy way to invest with minimal effort with no fees except for fees associated with the underlying ETFs themselves (which range from 0.05% expense ratio for VTI to 0.40% for SJNK, with weighted average of 0.08% for the entire portfolio with maximum of 91% allocation to stocks). Advantages include dollar cost averaging, diversified portfolio, low fees, and automatic rebalancing). The main disadvantage, however, like other robo-advisors, is cookie cutter portfolio allocation that mandates a certain allocation to bonds, 9% in this case. Bonds are terrible in today's environment, given near zero interest rates, tax inefficiency, and inflation risk.

Sales

I sold out Century Link for its high dividend yield and slow growth, as well as Vale for poor fundamentals. Both stocks were liquidated with a loss, -19% and -36%, respectively, much to my chagrin.

Piedmont was sold out as the company was acquired by Duke Energy in a 100% cash offer. I began monthly dollar cost averaging in the stock since November 2014 up till the merger announcement and made a 59% return on this investment.

Portfolio turnover was 4.19% in October.

Here is how my assets, liabilities, and net worth have changed over the past month:

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	Beginning balance on 10/1/2016	+ Cash inflow /(outflow)	+ $ P/L	= Ending Balance on 10/31/2016	% P/L	% Portfolio
ASSETS
Current assets
Cash	40,172.49	(10,707.32)	0.00	29,465.17	0.00%	3.57%
Bonds	12,522.54	87.44	(26.85)	12,583.13	-0.21%	1.52%
Stocks	556,915.85	28,968.18	(10,763.82)	575,120.21	-1.93%	69.59%
Total current assets	609,610.88	18,348.30	(10,790.67)	617,168.51	-1.77%	74.68%
Tax-deferred retirement account	138,260.93	1,618.99	(2,809.59)	137,070.33	-2.03%	16.59%
Roth IRA	63,504.08	0.00	(2,832.08)	60,672.00	-4.46%	7.34%
Gold	14,170.84	0.00	(410.34)	13,760.51	-2.90%	1.67%
Other non-current assets	5,000.00	0.00	0.00	5,000.00	0.00%	0.61%
Total assets	830,546.73	19,967.29	(16,842.68)	833,671.35	-2.03%	100.88%
LIABILITIES & EQUITY
Liabilities						0.00%
Current liabilities	0.00	0.00	0.00	0.00		0.00%
Long-term debt						0.00%
Student loan	7,433.99	(146.03)	0.00	7,287.96		0.88%
Margin loan	0.00	0.00	0.00	0.00		0.00%
Total liabilities	7,433.99	(146.03)	0.00	7,287.96		0.88%
Equity (net worth)	823,112.74	20,113.32	(16,842.68)	826,383.39	-2.05%	100.00%

My personal rate of return was -2.05% in October, not a good month for me. This is the first monthly loss since January.

Net worth edged up slightly to $826,383.39, due to cash inflow, partially offset by investment loss.

My monthly performance against the S & P 500 is shown below:

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2016	My Portfolio Return	S & P 500 TR
Jan	-3.69%	-4.96%	Good
Feb	5.74%	-0.12%	Good
Mar	3.99%	6.79%	Bad
Apr	1.39%	0.39%	Good
May	0.21%	1.80%	Bad
Jun	3.41%	0.26%	Good
Jul	4.25%	3.69%	Good
Aug	0.34%	0.14%	Good
Sep	0.34%	0.02%	Good
Oct	-2.05%	-1.81%	Bad
YTD	14.39%	5.92%	Good

Income & Expenses For September 2016

Since 2014, I have been tracking my monthly income and expenses. You can see a breakdown of every penny I earn and spend. For perspective, this budget is for a household of two in a small US city. By documenting my journey, I aim to demonstrate the feasibility of saving a significant portion of your income and provide some ideas and inspirations for your own budget.

Below are my income and expenses for September 2016. You can see all my monthly budgets here.

	Sep 2016
Income
Wages	$10,061.76
Dividends	$2,185.93
Other Income	$1,061.73
Total Income	$13,309.42
Expense
Federal Tax	$678.24
Federal Tax Pmt/(Refund)
FICA-SS	$418.24
FICA-Medicare	$97.81
Rent	$450.00
Student loan repayment	$160.47
Grocery	$46.47
Cell phone	$12.90
Electric	$44.23
Clothing/laundry	$2.00
Donation	$5.00
Amazon sale costs	$3.57
Total Expense	$1,918.93
Ex-Tax Total Expense	$724.64
Surplus/(Deficit)	$11,390.49
Before Tax Saving Rate	85.58%
After Tax Saving Rate	94.02%

Income
Wages remain my primary source of income by far. 

Dividend income $2185.93 reach all-time high this month. 

Here is a chart of my dividend income by month for the past 13 months:

As you can see, Sep, Dec, Mar, and Jun are typically high dividend months for me, generally equal to or exceed dividend income from the intervening months. 

Total dividends for the trailing twelve months: $13,848.91, up 19% from $11,630.24 in September last year. 

Expense

Expenses are pretty typical this month. Electric bill was higher than usual mostly due to air conditioning use during the hot summer month.

Total expenses for the trailing twelve months: $9,545.16. 

Dividend to expense coverage ratio = 1.45, also reaching new record high, thanks to record high dividend this month.

Savings
My after tax saving rate was 94.02% for the month of September, which is slightly above average for me. I expect to meet or exceed my 90% savings goal this year.