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August, 2021: 14 31
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. |
8/14/21-Since the prior entry (7/25), there have been no removals from or additions to our basic 25 holdings. They therefore remain as follows: AWF; BGFV; BHK; CIO; CRWD; DDOG; DX; EQTIX; LSPD; NAVI; NET; NLY; ODC; QQQE; SCU; SNOW; STX; UPST; VB; VBR; VIOO; VOO; VTV; WU; and XLE.
Total annual portfolio dividends continue on track to exceed $54,000 this year.
Liquid assets are up $111,849 or 5.18% since 7/25/21, totaling $2,273,044.
Assets of all kinds (including real estate, equities, collectibles, etc.) are up 22.55% or $490,476 since 12/31/20. Our nest egg total presently stands at $2,665,914.
As individual assets exceed a reasonable proportion of the portfolio, I am selling off some of our shares. This was done, for instance, with UPST, DDOG, and CRWD since the prior entry. Generally, though, no change in our approach to investing or portfolio management appears indicated at this time.
We have been fortunate in the rise of asset prices since the spring of 2020, our nest egg total now $966,332 or 56.86% higher than in early May of last year. Yet markets are hardly stable and do not follow unbroken growth trajectories. In my opinion, a combination of political dysfunction, economic fragility, inflation, pandemic repercussions, global warming effects, excessive stock market valuation, and surprise factors will once again lead to massive sell-offs. Just when this will happen is beyond my pay grade. Inevitably, the market worth of our currently tail-wind driven portfolio will plummet as it encounters overwhelming headwinds. Such occurrences can be great opportunities for buying at bargain levels. Though they may feel stressful, it is from them that we derive our best potential profits.
8/31/21-There has been a remarkable run-up of U.S. markets this year, most now at or within a whisker of record highs and our own nest egg over a million dollars higher today than at its low point in 2020. Meanwhile, since the prior entry (8/14) we have had one sale (SNOW) and one buy (MNDY) for our basic 25 holdings. Accordingly, they now include: AWF; BGFV; BHK; CIO; CRWD; DDOG; DX; EQTIX; LSPD; MNDY; NAVI; NET; NLY; ODC; QQQE; SCU; STX; UPST; VB; VBR; VIOO; VOO; VTV; WU; and XLE.
Annual total dividends from our portfolio will easily top the 2021 target of $54,000.
Liquid assets are up $29,067 or 1.28% since 8/14, now totaling $2,302,111.
Assets of all kinds (including real estate, equities, collectibles, etc.) are up 23.89% or $519,696 since 12/31/20. Our nest egg total presently stands at $2,695,121. These gains for the year are despite maintaining a cushion of reserves and bond assets to allow for bargain buying in case of a big downturn.
It is beyond my pay grade to be able to market time. I could easily be wrong if I were to attempt any short-term forecast of the direction of U.S. stocks and stock funds. In the mid-1990s (12/5/1996), Alan Greenspan, then Chairman of the Federal Reserve, noted that our markets were displaying "irrational exuberance." The average price to value seemed excessive at the time, with the S&P 500 closing the day at 744 and the average top 500 stocks' P/E at the time being 23, just shy of the 24 level before the 1929 stock market crash that ushered in the Great Depression.
Despite his warning, most equities continued to surge for several more years, the S&P 500 not peaking till 3/24/2000 at 1553, 109% higher than in December, 1996. In that interim, the P/E for that index would rise (in 1999) to a then astonishing 34. From its high in March, 2000, the S&P 500 would fall about 25% over the following two years, but the real debacle was seen for the Nasdaq, down roughly 63% in the same couple year period.
My point, though, is that I lost out on a significant part of the rise for stocks in the 4-5 years after the end of 1996 by having too large a portion of our assets safely in money market funds. I was sure a meltdown was imminent. Today, once again the market seems irrationally at lofty levels. I might, for instance, put 80% or so of our funds into safe short-term bond securities, then could watch as inflation might reduce the buying power of those holdings and as the stock market might again double while I would be mostly on the sidelines.
All in all, it seems prudent not to forecast what "Mr. Market" will do but to have a moderate approach to portfolio management, one conservatively allocated but with a significant proportion of our nest egg in equities while nonetheless selling off excess amounts as they rise above a reasonable annual gains glide path. I probably won't handle this perfectly, but will at least endeavor to be consistent in that kind of approach.
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Neither I nor Investor's Journal will be responsible for losses by anyone who obtained ideas from this site.
This diary is intended for personal interest and general information only. You are advised to do your own research (as well as to consult highly compensated professionals) before spending money on anything.
I know of no reason anyone should take my financial musings seriously. At best I am a dedicated amateur providing a bit of investment-related insight and entertainment, at worst an amusing diversion.
My wife, Fran, and I may at times own shares of some of the assets mentioned here. But neither of us receive any benefit from reference to them, unless you count the mutual misery when we get it wrong, or the opportunity to gloat when we get it right.