Dividend Account results – 3rd Qtr 2020

Sorry I didn’t post over the weekend. Went backpacking up in New Hampshire, where it dropped down to 32 degrees with a 15 mph wind blowing. Made the hike a little more “exciting” than I wanted.

As noted back in April, I altered my Dividend/Income account to reduce the bond allocation to 0, and increased the dividend stocks and REITS to a 50/50 split. The idea was to increase my dividend yield, as bonds had been performing poorly for the 3+ years that I had been using them. With Interest rates the way they appear to be, I don’t see bonds performing that well in the near future.

The first quarter was somewhat successful (an 18.7% increase in dividend $) but a real bust as far as value (I dropped almost 30% in value) due to the market volatility. Yield was up to 6.13%, but this was primarily due to a drop in the underlying value of the investments. For the second quarter, the investments recovered somewhat, and my yield dropped won to 4.67%. The actual $ amount of dividends for 2020 vs. 2019 was just about even.

For the third quarter, the value of the underlying investments has gone up about 2% (still not where they were at the beginning of the year) and the dividend payments are only 3% higher than the same period last year. A slight improvement.

stockDetailsInvestment valueYieldDividend
CATCaterpillar$7,457.502.76%$51.50
CVXChevron$3,600.007.17%$64.50
CSCOCisco Systems$5,908.503.66%$54.00
DOWDow$4,705.005.95%$70.00
XOMExxon Mobil$3,433.0010.14%$87.00
HRHealthcare Realty$15,060.003.98%$150.00
IBMInternational Business Machines$6,084.005.36%$81.50
PFFiShares$12,029.005.39%$162.04
PFEPfizer$5,505.004.14%$57.00
ORealty Income Corp (REIT)$12,150.004.61%$140.10
SVCServices PPTYS TR$4,770.000.50%$6.00
MMM3M Company$6,407.003.67%$58.80
UMHUMH Properties$14,894.005.32%$198.00
VZVerizon$5,949.004.14%$61.50
WBAWalgreens$3,592.005.21%$46.75
$111,544.004.62%$1,288.69

Again, if I was using the account to live off the dividends, I could “let it ride” and let the investments build back up, while spending the dividends. I believe the “jury is still out” on whether the shift to stocks & REITS was a good decision or not. With the current US Fed and its interest rates, I don’t think Bonds will be a good return any time soon – unless you are willing to go into some very risky bonds. If I had additional capital, I might invest more here, as I think these dividend stocks are undervalued.

Let’s see how the 4th quarter goes.

Mr. 39 Months

Quarterly Update on Goals – Oct 2020

Well, it’s early October, and while I’m down for the year in my investments, I still think I’ll end the year OK, maybe a little up. I think there is a lot of uncertainty in the market right now re: the US elections, and that will all be sorted out int he next 30 days. Once that is done, hopefully we will continue moving forward.

The Chinese Corona Virus is still around, still causing issues, but I’m also hopeful that its affects on the economy will continue to recede. We will see.

My Goals for 2020 (some financial, some not):

Finance:

  • Save $28K in tax-advantaged accounts – 401K, and Roth IRA.  Grade A. Saved $3.5K in our 401Ks for the 3rd qtr, bringing my 401K total to $11.2K. Plan to put my $14K bonus into the Roth in 4th Qtr once I know my tax status.
  • Save $41K in regular accounts (compared to $5K in 2019). Grade A. We’ve saved $43K for the year. Remaining money goes into paying for the Roth IRA.
  • Increase dividend income from all accounts to $27K/year (compared to 29K in 2019). Grade C. Dividends are down for the year in the major accounts/mutual funds. Was only able to put $5.8K in for 3rd qtr, which leaves me at $17.6K for the year. Unless 4th qtr is a “gang buster” dividend time, I won’t hit it.
  • Passive income covers 30% of base living expenses in retirement, estimated at $78K per year (previously, I was using $72K, but after meetings with our finance guy and Mrs. 39 Months, the budget ended up being $78K).  Grade A. Currently running at 30.1%. My long-term goal is to get my dividend/passive income up to where it covers over 100% of my expected retirement living expenses, so my investments can continue to grow.
  • Beat net worth growth rate of 6% (it was +20.1% in 2019 with the stock market run up). Grade D. Like most folks, my Net Worth hasn’t moved much. While I’m down in my investments for the year, since I continue to dollar-cost-average in, my net worth is up 2.4% – but unless the market really turns, I don’t think I’ll hit my historical 6% this year.

Business:

  • While not getting a membership, I wanted to attend six (6) of my local real estate investors association meetings this year. Grade A. My local real estate group has had free online meetings, at least 2X a month, and I’ve attended eight already. Going to continue to do this, and I’ll probably join permanently in2021.
  • Double the number of blog visitors in 2020. Last year it was a little over 6,000. I want to get at least 12,000 this year, so I need to put myself out there more (i.e. comment) and write interesting topics. My thanks to everyone who stopped by, and I try to return the favor, and comment as well. Grade F. Not seeing a real jump on this – If anything, it’s a bit of a drop. Need to get out in the community more.
  • Create TKD Woodworking (my side-hustle name) with an LLC, website, finance tracking, etc. Sort of a trial method for running businesses. Grade B. Incorporated it, built 5 products, established a website (basic one) and began selling on Etsy. Due to the Virus, haven’t been able to do any trade shows. Still, coming along.
  • Make $1,000 in sales (not necessarily profit) on items with TKD woodworking. Grade F. Haven’t sold anything yet.
  • Write/publish a book on finance.  I wrote one for new graduates in 2017, but I have identified an area of the community which hasn’t been served as well in the past. Hopefully I can assist with something here.  I’ve got the first five chapters outlined/partially done, but still have a ways to go. Grade F. With all this extra time, you’d think I could make progress on this. A little lazy I guess.

Personal:

  • Increase weight lifted by 10% from 2019. Was able to exceed this in 2019, need to continue to push it. Grade F. Jumped up about 7% in 1st qtr, but haven’t been lifting due to the Chinese Corona Virus. In September, I went to the online training system called Gynmastic bodies. Looking to get better with that since I can’t go to the gym now.
  • Average 2 hours of cardio per week, which is about what I’m doing now. Grade A. Walking daily, so hitting this.
  • Backpack over 90 miles on AT (did around 80 miles in 2019). The trail that I haven’t hiked is getting further and further away, making it impossible to do weekend trips. Going to get harder. Did 40 miles in August, have 18 miles this month and another 30 scheduled for November. Grade B.
  • Continue volunteering at Pennsbury Manor at their joiner’s shop (woodworking). Really enjoyed this. Incomplete. Site is closed down
  • Reduce weight by 20 lbs. from Jan 2019 (lost 2 lbs. in 2019). Again, I want to get in better shape as I get closer to financial independence. Grade C. I’m down 8 lbs in first 3 quarters, but still have a long way to go, and the virus is keeping me from eating as healthy as I’d like.
  • Read at least one book a month. I surpassed this goal in 2018, and re-learned the joy of reading. Grade A. Seventeen (17) books so far and I really enjoy it.

Travel:

  • Visit three national parks (that is the plan, right now). Grade F. No vacations this year.
  • Visit family in Tennessee, Vermont and New York. Family is very important to me. One of the things I am looking forward to with financial independence is the opportunity to visit family more often. Need to get up to see my brother in Vermont. Grade B. Visited Vermont and Tennessee. Just need to see family in New York now.
  • Take a week at the shore and just relax with family. Currently planned for July, but we’ll see how many family members can come. Grade F. Cancelled.
  • Visit Ellis Island. Still want to do this – its so close. As 50% Czech from immigrant great grandparents from the turn of the century, I believe they went through there, and I want to see it. Grade F. Cancelled.

How did your third quarter go this year?

Mr. 39 Months.

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!

Mr. 39 Months

Investment Update Sep 2020 – Back “in the Black!”

Well I’m back from my backpacking, and we are “back” in terms of our investments. Like most folks in our community,  I’ve been riding the slow, steady “up” of the markets for the last four months (May – August), as our finances have crept out of the hole that we fell into during the Feb/Mar crash. As long as you didn’t panic and sell everything, the market typically recovers – even from the crashes of 2000-2002 and 2008-2009. It never pays to panic and sell out. If you are uncomfortable, just adjust your asset allocation to a more conservative position, so you can sleep better at night.

With that said, we are back to a positive 0.8% for the year, even after all the money we have put into the market (we never stopped our regular, monthly contributions). The S&P 500 is up 7.5% for the year – so if we were 100% in the S&P, we’d really be up. However, five stocks are primarily responsible for that jump up (the tech stocks) and I was around for the dot.com bubble, so I don’t feel comfortable putting all my eggs in those 5 company’s baskets. I won’t do as well, but as I said, I will sleep at night.

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

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: 7%
  • Small Cap: 4%
  • International: 3%
  • REITs: 1%
  • Bonds: -16%

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 3% for the month (including dividends).

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 3.8%, a nice bump. For the year, I’m at +0.8%. My expectation is a slow growth, probably ending around 3% – 4% for the year.

Hope everyone is healthy and your Sept turns our well!

Mr. 39 Months

Purging your Blogroll III – Aug 2020

Well, its August, and as I did in 2018 or 2019, its time to do a “blogroll purge.” As I noted then, one of the things which has always brought me a lot of pleasure is reading other FIRE blogs and seeing the different facets of the subject. It seems each blogger has a topic which motivates them, and they concentrate a great deal of energy on that topic. The result is some excellent reading and the opportunity to learn in-depth of a wide variety of topics.

It’s a sad thing that as people seem to hit FI, they take off and the level of blogging activity seems to drop. I’ve heard it said that many bloggers (and podcasters) don’t make it past six months. They say what they need to say, and then run out of ideas. When this happens, we often lose an interesting voice and set of thoughts. One of the reasons I enjoy the Post-FI blogs (near the top of the blogroll) is to see what life is like once folks hit the magic number/date.

What is nice is that there are always new people joining our community, and I want to make sure that I can include those in my blogroll (at right) so others can link to and see what they are saying. So I typically every 6-12 months do a blogroll “purge” where I clear out those blogs who haven’t updated stuff over the last 3+ months, and this frees up space for newer bloggers. So today, I’ll be doing my blogroll “purge” and trying to identify new and interesting folks for you to see.

Enjoy, and I hope you enjoy my writing and the writing of those I point out. Enjoy the rest of summer!

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Mr. 39 Months

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

Six Month Checkup on Spending

Earlier in the year, I wrote about re-looking at our spending a couple of months in, to make sure our budget was tracking fairly well. Depending on your viewpoint in the FIRE community, you can be rather blasé about your budget (maybe just pay yourself first and spend the rest) or you can be very nitpicky. We tend to fall more towards the former category, but being very frugal, we typically end each month with a little more than we started. We’ve also reached that point in our lives (mid 50s) where we have purchased all the major things we need/want (cars, furniture, home, clothes, etc.) so we just have to maintain, rather than increase.

It does make sense, however, to occasionally review your spending, so you don’t get surprised at some point. With the Chinese Covid virus hitting, it has caused a lot of folks to alter their spending habits, in some cases significantly. For example, we are both working from home, so our grocery bill has gone up significantly, but the money we spend to eat at work (coffee, lunch, snacks) is non-existent. Our vacation and entertainment money has also seen a drop off.

So how have we done for the first half of the year?

Here is my earnings, deductions, and expenses for July 2020, as a percentage of total income.

Revenue
AreaCategory% of total
EarningsRegular Pay99.4%
EarningsCell Phone reimbursement from my company0.4%
EarningsExpense Reimbursement0.2%
TotalTotal
Deductions
AreaCategory% of total
Deductions401K Roth4.5%
DeductionsDental0.5%
DeductionsH.S.A.4.1%
DeductionsLong-Term Disability0.3%
DeductionsMedical3.2%
DeductionsSpousal Surcharge0.6%
DeductionsVision0.1%
DeductionsWellness Credit-0.5%
TotalTotal12.7%
Taxes
AreaCategory
TaxesFederal Income Tax14.3%
TaxesMedicare1.3%
TaxesSocial Security5.7%
TaxesState Income Tax4.8%
TaxesNJ Family Leave, Disability, Unemployment, etc.0.6%
TotalTotal22.9%
Expenses
AreaCategory
AreaCategory
AutoAuto Fuel0.4%
AutoAuto Repair1.1%
AutoAuto Registration0.0%
AutoAuto Tolls0.1%
CharityCharity3.1%
ClothesClothes0.3%
EntertainmentBooks0.1%
EntertainmentLA Fitness0.2%
EntertainmentPostal/office supplies0.1%
EntertainmentHobby1.2%
FoodGroceries3.1%
FoodDining Out0.9%
FoodFood/Snacks1.4%
HomeHome Repair2.0%
InsuranceLife Insurance0.3%
InsuranceHome/Auto Insurance1.4%
InvestmentsInvestments33.4%
InvestmentsSavings0.6%
MedicalMedical – H.S.A0.1%
OtherOther1.5%
OtherHaircuts0.1%
TaxesProperty Taxes3.3%
UtilitiesPSE&G2.2%
UtilitiesVerizon1.9%
UtilitiesWater Bill0.2%
TotalTotal59.0%

Some things, which stuck out after doing this analysis:

  • Still have about 5% “unaccounted for” in spending. This ends up being the extra we have that has gotten plowed back into savings.
  • Taxes still take a big bite (22.4% of gross pay for Federal & State income + property tax). Since we aren’t paying a mortgage anymore, this is our biggest hitter
  • Investments coming in 33.4% of gross pay (if you count the Roth, its 58.3% of take home pay after taxes & work deductions). Doing a fairly good job of putting stuff away
  • Medical is coming in at 4.2% of gross – with just about all spending coming out of the H.S.A. We still have funds in it, so its been a good choice for us.
  • Food and Utilities each around 5%
  • Charity is about 3.1% of gross, about 9.6% of net pay coming in. We don’t itemize, so we get no deduction from this on our taxes, but we try to give as much as we can.

So like most, our home utilities and food have gone up, our spending related to our work and going out have gone down, and we seem to have spent less over the last six months.

The only big surprise for us this year (other than Covid) was the tax bill. We ended up owing $2,600 federal and $600 to the state. We adjusted our tax withholdings up (that is why the percentage is higher now than my February update). We continue to be on track and in fairly good shape, even with all the shutdowns. Mrs. 39 Months has had her hours cut 20% (one day/week furlough) but I’m still earning. We appear to have stayed relatively within budget and continue to save large amounts of our take home pay.

How are you doing with your budget and spending so far in 2020? How has Covid affected you?

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Mr. 39 Months

I’ve reached 39 Months!

July 1, 2020

Well, 39 months ago (Apr 2016), I started the blog, with the idea of tracking my progress, as I sought to reach FI within 39 Months, by July 1, 2020. My hope was that my comments, thoughts, mistakes and learning might assist others in their pursuit. I also took the opportunity to share some of my hobbies and books that I read on the subject.

At the beginning of 2017, we had already reached a major milestone, in that our Net Worth was over $1 million. We had paid off the last of our home loan, so we owned our house free & clear.

  • Real Assets (home, cars, etc.) – $303,237
  • Liquid Assets (savings, checking, emergency funds, etc.) – $139,572 (Mrs. 39 Months likes a large emergency fund)
  • Investments (IRA, 401K, small brokerage, etc.) – $824,129
  • Debt: $0
  • Net Worth: $1,266,938

Based on the money we were sticking aside every year and some expected returns (3% inflation, 9.8% stock returns before inflation, 4.6% bond returns before inflation) we projected our net worth increase each year. The net worth would grow to $1,406,316 (not counting the house). Using the 4% rule, we came to a little over $56K/year, which, when combined with our future social security (big if) I felt was sufficient. I created and published a drawdown plan on the blog (and its one of my most popular posts, as I have updated it as the time has gone by).

Its been an interesting and rocky road over the last 39 Months

  • Home value has not improved significantly ($321K now vs. 297,950 in 2017) – about 3% per year
  • .Good 2017, wth 12.3% increase in net worth. No debt, kept funding
  • Terrible 2018, with 1.6% drop in net worth due to market crash
  • Awesome 2019, with a 22.2% increase in net worth
  • Crash in 2020, with a -5.9% loss in our investments to date

Also, our assumptions for our retirement have changed significantly. Last year, we engaged a financial planner, because Mrs. 39 Months wanted a second opinion on the potential for retiring early. We had a series of meetings with him, which helped me appreciate some of the nuances of retiring early and its impact on the finances. We had some disagreements (future inflation, return on future investments, etc.) but I ended up adopting a lot of his numbers in our analysis.

  • After discussions with Mrs. 39 Months, we set our annual retirement spending at $78,000/year base (going up each year for inflation)
  • Inflation at 3.25%, with 6% inflation for medical inflation
  • A 7.2% return on investments (based on a 60/40 allocation) or roughly 4% above inflation rate
  • Drop in lifestyle spending (travel, dining out, etc.) by 35% after age 75 (pretty typical)
  • Get social security at age 67, but discount mine (the higher wage earner) by 50%. I think SS will have issues in the future, and one of the ways they’ll make it work is to cut benefits.

So, with that it mind, where are we at the 39 Month mark? We are actually pretty close to what we thought back in April 2017.

  • Net Worth around – 1,704K (vs. goal in April 2017 of $1,716K)
  • Real Assets (home, cars, etc.) – $328K
  • Liquid Assets (emergency fund, etc.) – $167K
  • Investments (401K, IRA, brokerage)  – 1,209K

So are we financially independent at the end of 39 Months? No.

Based on our new assumptions (6% medical inflation, 7.2% returns for stocks, etc.) the money we currently have + taking social security at 67 means that we would be able to fund a lifestyle of roughly $64K per year (not counting use of a reverse mortgage). We pretty much fell in line with the original plan, but the needs of retirement have increased. As I noted before, this was after consultation with Mrs. 39 Months, so I think the $78K number is a lot more “solid.”.

Based on the new analysis, assumptions and the current market conditions, it appears that we will achieve FIRE in 2023 (about 30 more months). In the meantime, I’m looking at side hustles that I can use to generate income after we hit FI and potentially stop the 9-5 grind.

Thanks for reading over the last three years, and I hope to hear from you on my blog in the months and years ahead!

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Mr. 39 Months

Investment Update June 2020 – what is up with the stock market?

We’ve had three months of lockdown in the US, where the economy has been throttled, followed by a week of people trying to burn the major blue cities to the ground (and doing significant economic damage to those cities). GDP is supposed to take a beating for 2nd quarter in the US. Yet the markets keep shooting up, and they are close to returning to their all time highs of late December. What the heck?

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.

I have my own personal theories on this, which include:

  1. Everyone who can continue to work is, and they have automatic deposits set for their 401Ks, IRAs, etc. The result is that money continues to flow into the market no matter what, driving the prices up.
  2. A lot of folks sold off and dropped to the sidelines and cash, but with the US Federal Reserve dropping rates, they aren’t getting anything for their money is the “safe harbors” of savings or bonds. They are being forced (kicking & screaming?) back into the market

Either way, the markets continue to jump up, even as the overall economy appears to suffer. We will see how that goes in the months ahead. For now, May was as kind to our investments as April – things appear to have rebounded nicely.

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. Due to this allocation, I didn’t get hit as hard as some folks in March or in late 2018 – but I also didn’t get as big an “upside” in 2019 either. It all depends on your risk tolerance.

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.

Growth for May

  • S&P500: +4.8%
  • Small Cap: +7.7%
  • International: +4.8%
  • REITs: +1.7%
  • Bonds: +0.5%

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

  • 50% Dividend Stocks
  • 50% REITs

I had to switch my dividend account from my bank (USAA) over to Vanguard, as the bank was shifting it to Schwab, and I really didn’t feel like having my investments split to a third bank. Luckily I was able to make that move at the end of May with no real effects. Overall the dividend account was up 1.3% on average, with stocks being the big drivers up and REITs sort of staying still. June will be dividend payout month, so I’ll get a better idea of overall quarterly performance then. I’m planning on some of these companies cutting dividends due to the economy.

My brokerage account at my bank was shut down (they were moving it to Schwab and I don’t want to have three large firms with our investments) so I shut it down and invested it all into Vanguard Value Index average fund, to try and chase some value stocks. It was up 5.1% in April, once the change was made.

My Vanguard value fund (where I’m keeping my “fun money” right now was up about 3% for May.

Overall, I was up 3.4% for May, though I am still down -8.03% for the year. I tracked it back, and my investments are back to where they were in early October 2019. Like many of you, I intend to “stay the course” rather than make any radical moves, though I am considering changing my allocation when I rebalance in early July. I think low interest rates will be killing bonds, and I’m not so sure about REITs in the post-Chinese Virus world. I’ll let you know my thoughts on that later.

Hope everyone is healthy and your June turns our well!

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Mr. 39 Months

Investment Update May 2020

Like most folks, April was a lot kinder to me than March. For March, we lost about $161K of our investments (though it was as much as a $191K loss as late as March 23rd). With April being an “up” month, states and countries opening backup, and businesses starting to discuss getting back to normal, let’s hope the economy starts rolling. Our unemployment rate in the US is going to be pretty substantial, and we’ll probably be spending the next 12-18 months cutting it back to normal.

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. Due to this allocation, I didn’t get hit as hard as some folks in March or in late 2018 – but I also didn’t get as big an “upside” in 2019 either. It all depends on your risk tolerance.

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.

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

  • S&P500: 12%
  • Small Cap: 14.5%
  • International: 5.5%
  • REITs: 6%
  • Bonds: 2%

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

  • 50% Dividend Stocks
  • 50% REITs

The dividend paying stocks were up anywhere from 11% – 23%, though most of them are still in negative territory from the beginning of the year. My dividend yield from 1st Quarter was 6.13% (annualized) which was a big increase from last year, but a major part of that yield equation was the low stock price. Still, I collected 18.6% more in dividends in 1st qtr 2020 than in 1st qtr 2019, so we’ve made improvements there. Now we just have to hope these companies don’t cut their dividends.

My brokerage account at my bank was shut down (they were moving it to Schwab and I don’t want to have three large firms with our investments) so I shut it down and invested it all into Vanguard Value Index average fund, to try and chase some value stocks. It was up 5.1% in April, once the change was made.

For March, I was down -13.68% overall. For April, I climbed up 8.55%, but I’m still down 11.13% for 2020. We’re back to over $1.1M in invested assets. Plan to continue working on hitting our FI number.

Hope everyone is healthy and your May turns our well!

Mr. 39 Months