Investment Update Feb 2020

Only 5 months to go!

After its stellar performance in 2019, a lot of folks expected a “pullback” in the market. For January, it appears the market agreed, and the S&P 500 dipped 1.0%, from $3,257.85 to $3,225.52 (Note, it has since rebounded to $3,327.71, or up 2.1% for the year). Like most folks, I was intent to just “let it ride” and even if 2020 was a “null” year with limited growth, it was better to be in the market rather than trying to time the market.

As you know, the allocation for my retirement accounts (IRAs, 401K, etc) is pretty much index funds, spread out between the  S&P 500, small-cap, international, REITs and bonds. I did rebalance my portfolio at the beginning of the year, similar to what I did back in July 2019. As expected, this resulted in me selling some stocks, and purchasing some bonds and REITs – items which actually did very well in January.

Retirement Accounts: Remember, my allocation for these is:

  • 30% Bond Index Fund
  • 17.5% S&P500 Index Fund
  • 17.5% International Index Fund
  • 17.5% Small Cap Index Fund
  • 17.5% REIT Index Fund

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

S&P was down a little, but the Small caps were down about -2.0%, and International was down -3.2%. Bonds were up +2.2% and REITs were up about 1.0% – so the items I sold at the beginning of January, I sold high, and the items I bought, I purchased low – the big goal for any investor. My 401K account, since it doesn’t have a REIT option, did not gain the benefits from it.

My dividend account allocation original allocation was:

  • 25% Dividend Stocks
  • 25% REITs
  • 50% Bond Index Funds

However, I got tired of getting poor results from my heavily weighted bonds (the stocks were actually returning more dividends than the bond funds) so I changed it to a 50% dividend stocks/50%  REITs allocation. For January, the result was a dip of about -1.9%, though this could be just the timing of it all. The stocks have already rebounded in February, and I’m going to be getting higher dividend payments – so it should be good.

For January, I’m down about -0.26%. My bonds and REITs helped make up for the poorer stock performance, which is what you have those things for. February is shaping up well, so I’m looking forward to seeing what comes of that.

Hope your January was good, and the year is starting out well!

Mr. 39 Months

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