Investment Update Oct 2020 – September was not good to me

What a year it’s been! Like everyone else, it’s been a crazy year. Markets up/Markets way down/Markets way up/Markets down. It’s enough to drive someone to drink – or to drink more!

I was reading an article which was showing the various stock indices for each country, and apparently just about every other countries stock market (Britain, Germany, China, etc.) haven’t gotten back to their pre-2008 numbers, and most haven’t gotten back to their pre-dot.com (1999) numbers. Heck, Japan hasn’t even gotten back to their 1989 numbers!

So the US stock market is a bit of an anomaly here. The fed has pumped a lot of money into the system, and this has resulted in the market staying up. By keeping interest rates low, folks have nowhere else to put their money but the market (bonds, CDs, etc. – who are you kidding). At some point in time, it’s going to drop worse than in March 2020.

What to do? Get ready for it, both physically and physiologically. Pay off debt, so that isn’t hanging around. Get your spending within reasonable levels, so if you have to cut back, you can. If you have short-term needs (within the next 5 years) get that money out of the market and into bonds/treasuries/CDs. Be ready to suddenly lose 20%+ of your stock money – and don’t immediately go out and sell everything. What you leave in the market should be money you won’t need for the next 5+ years.

For September, we ended up losing about -2.52%, and it was broadly “across the board.”

So our allocation is as follows, as of July 2020:

Retirement Accounts: Remember, my allocation for these is:

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

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

S&P was down -4%, International -2.4%, Small Cap down -3.2% and REITS down -3.6%. Bonds were up +0.4% (one of the reasons to have them).

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

  • 50% Dividend Stocks
  • 50% REITs

The dividend paying stocks varied, but most were down. Overall, the account was down -3.0%. My value account with Vanguard was down -3.0%, so it was in line with most of the stock losses.

So September pushed us back into negative numbers for the year (-1.82%). I’m assuming we’ll gain some/all of that back for the year, and end 2020 about where we started.

Hope everyone is healthy and your Sept turns our well!

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Mr. 39 Months

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