Investment Update Aug 2020 – Getting back there

With the Fed flooding the US with dollars while also keeping interest rates low, is it any surprise that the markets keep shooting up? Bonds have nowhere to go but down, and banks won’t pay anything for CDs or savings. Folks have nowhere to go but stocks – or precious metals & commodities (see gold/silver). So like most folks, my investments have continued to go up, even as reports of US second quarter GDP being in the tank.

Again, I’m not surprised, but I’m also not jumping for joy with the recovery. We really won’t know the effects of all this for a couple of years – right when we are looking to retire early.

If there was ever a time which showed that the stock market is not the economy. The economy is going to be hurt for 2020, but it appears the market may rebound.

As you know, I switched my allocation at the beginning of July, lean more heavily on stocks and REITs and to pull back from bonds (see above).

Retirement Accounts: Remember, my allocation for these is:

  • 20% Bond Index Fund
  • 20.0% S&P500 Index Fund
  • 20.0% International Index Fund
  • 20.0% Small Cap Index Fund
  • 20.0% REIT Index Fund

My 401K doesn’t have REIT option, so its just 25% for each.

As you would expect, everything was up, though in different amounts.

  • S&P500: 5%
  • Small Cap: 5%
  • International: 6%
  • REITs: 4%
  • Bonds: 1.6%

My dividend account new allocation (as of Jan 2020) was:

  • 50% Dividend Stocks
  • 50% REITs

The dividend paying stocks varied (some up, some down) but overall the account gained 1.2% for the month. My dividend yield for the 2nd quarter was 4.7%, and the stocks were recovering (but still down about $20K from their January high).

My value account with Vanguard was up 4.9%, so it was in line with most of the stock gains.

Overall, for July, I was up 4.3%, a nice bump. For the year, I’m still at -2.3%, but at least my Net Worth has recovered back to where it was at the start of the year (counting on all my investments I put in for the year).

Hope everyone is healthy and your May turns our well!

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Mr. 39 Months

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