Investment update for May 2019

Only 14 Months to go!

Wow, economy continues to go chugging along, GDP growth in the US was 3.2%, and unemployment is the lowest since people were stunned by humans walking on the moon! I know at my company we continue to struggle with hiring folks, and we have had to dramatically increase our wages for hourly employees (warehouse workers, transportation, etc.) Personally, I think it’s a great sign that the wages of the hourly folks, which have been stagnant for a long time, are getting the bumps they need. In my company, the salaries of a couple just starting with the organization equals about the average salary in the US. Depending on where they live, they are already in the middle class. Stick with it a couple of years, and they’ll be earning really good money. Yay!

You’d think this might be a drag on the investments (inflation, fed raising rates, etc.) but it doesn’t seem to be slowing things much. US Markets are hitting new highs. April was another banner month, and we continued to push stuff forward. My investments were up 1.64% for the month, and are up 12.53% for the year. This with me playing it safe with 30% in bonds! Some more aggressive FIRE folks are really “burning it up” in their investments this year.

Realized that I hadn’t done an investment update for February this year. I guess when you hit a certain point on your FI journey, where everything is on “autopilot” you just don’t notice. It’s a shame, really, because February was another good month, coming off a really good January. There are reports of the economy slowing down in 2019, but the reporting of profits in 2018 has provided some positive surprises for companies, and the result has been a continued strong market. Also, the US Fed has backed off its aggressive stance on interest rates (see my previous post on that effect) so the market will hopefully do well in early 2019.

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

Another positive month, with small caps, International and S&P 500 leading the way. Again, they are making up for a poor showing in 2018. REITs and bonds (better in 2018) continue to perform poorly. Continue to show the need to rebalance, which I do every 6 months.

  • S&P500: +4.0%
  • Small Cap: -+3.7%
  • International: +2.8%
  • Bonds: -0.1%
  • REITs: +0.1%

My 401K/Deferred account at work is up a similar amount

Dividend Income Account: Allocation:

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

This is down -1.2%, primarily because I am so heavily weighted in bonds and REITs. The dividends they throw off are nice, but at times, they just don’t grow much. My dividend stocks (Chevron, Verizon, etc.) are also down significantly. I continue to use this to learn/experiment with dividend investing, so I’m not too disappointed.

Value Investing Account: My value investing portfolio is up around 2.9% for the month. Nice bump after getting burned in 2018. The allocation is about 50/50 between a total market fund and a value index fund.

So for the year so far, I’m up 12.53%, and I have put almost $38K into the accounts since the beginning of the year (put 100% of my bonus into investments). On track to put about $75K for the year.

I did an updated analysis of my current situation, and if my wife and I got only 50% of our expected Social Security, we could consider ourselves financially independent right now. Since I still don’t have a lot of confidence my SS will not be cut, I’m planning to continue to work at least the remaining 14 months.

How was your April?

Mr. 39 Months

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