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January, 2018: 2 16

Disclaimer - IMPORTANT - Read this first!

Investor's Journal is a diary focused strictly on investments and personal finance issues, primarily from a contrarian and retiree point of view. Follow along with an average guy's failures and successes as he learns, by trial and error, the fine art of value investing.

Also since the prior submission and through 12/31/17, our liquid assets have increased $3734 or 0.27% to $1,380,154. Total equities' yield has decreased some, as I have sold off equity holdings while the market has been up in recent weeks. Nonetheless, it has remained at 2.0% or more times the combined value of our common stock shares.

For the year 2017, final liquid assets' value is 14.26% higher than on 12/31/16 and now stands at $1,380,154, though we have kept a large percentage in money market accounts. Sooner or later there will be a significant drop from which to benefit with bargain buying. The equities only portion increased 18.97% in 2017.

As usual, our primary emphases have been on: 1. limiting risk; 2. while growing the total equity dividend. Notwithstanding our selling dividend stocks toward the end of the year (as the market has continued its big surge following the Donald Trump election), in 2017 our portfolio's total equity dividend income exceeded the $29,383 year-end target, reaching $29,539. As a reminder, the intention is for a total equity yield of 2.0% or better while increasing equity dividend income on average by 13.5% annually (from when this regimen was begun several years ago).

That plan, now successfully followed for nearly 6 years (since early 2012), has in the interim raised the equity portfolio total dividend income from about $15,600 to over $29,500. The strategy continues: for 2018, the dividend income target rises to $33,350.

Though I think stocks are overextended and in a sense "due" for a correction or a new bear market, the 2017 market rise helped my wife and I manage an interesting compound growth rate milestone. We began our marriage (in 1985) with a combined net worth of just $5000. By 2017, we have had 32 years together and an average annual increase in net assets during that period of over 20%, a rate taking that initial rainy day fund to net current assets of $1,685,204. Our average yearly earnings were less than competitive, about $36,000 for the two of us: I worked a not so lucrative government job; my wife was a self-employed music teacher and part-time orchestra member with summers and such off.

While this may sound like a great feat, emulative of Warren Buffett, instead it simply involved keeping our expenses low, saving and investing the difference between income and monthly outlay, and doing a bit better at investing than the market averages.

The above total assets level also represents an increase of $175,900 or 11.65% over last year's net assets of all kinds (real estate, cash reserves, collectibles, equities, etc.).

I personally think it unlikely the stock market by the end of 2018 will be at record highs. So probably my wife's and my net worth by a year from now will have been reduced. However, the wisdom of yours truly about market timing leaves much to be desired. Yet making sure we achieve gradually rising dividend income targets, independent of the ups and downs of "Mr. Market," should keep on providing satisfactory rewards.

May you and yours enjoy a wonderful new year, a safe and prosperous one, a time offering riches in relationships, security, and sufficient income to meet your needs without undue stress.

1/16/18-Since the prior entry (1/2/18), UTHR has been sold and replaced by EXPD. Our basic 15 holdings thus include: AEG; AMGN; ANAT; BRK/B; CVS; EXPD; FL; GLAD; IPG; MCK; MD; SLB; T; WPP; and VZ.

Also since 1/2, liquid assets have increased $43,366, or 3.14%, to $1,423,520. Our total equities' yield continues to be at least 2.0% of the equity portfolio market value and is on target to achieve the 12/31/18 goal of $33,350.

Since 12/31/17, net total assets have increased $43,506, or 2.58%, to $1,728,710.

My wife and I continue to think the market is overvalued, and so, as our equity portfolio increases $10,000 or more above the current day's target, as has occurred four times since the prior entry, I sell shares in the holding with apparently worst risk-adjusted prospects. Reserves are thus rising as a percentage of liquid assets, even as our total net worth is going up as well.

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