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December, 2018: 27 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. |
12/27/18-Since the prior entry (11/24/18), there has been one sale, GAIN, from our holdings. One asset, VIOO, has been purchased to replace GAIN.
Accordingly, our new basic 25 holdings are as follows: AEG; AYX; BRK/B; BRX; CAH; GILD; GM; HMC; INFY; LYB; MCK; NHC; OLP; RIO; SLB; SNY; SQ; T; TTD; TWLO; USB; VIOO; WPP; and ZS.
Currently, my wife's and my liquid holdings stand at $1,291,100 up 2.20% from their level a month ago, though this rise is a bit of a fluke, unrelated to the market. My wife and I benefitted from a small inheritance since the last entry. Our liquid assets' yield continues to be at least 2.0%, and the total dividends actually are ahead of our target for 12/31/18 of $37,500. The intention going forward remains to assure at least 13.5% annual increases in liquid assets' dividends.
Since the end of 2017, net total assets have decreased 5.07%, or $85,484, to $1,599,720.
Our approach continues to be to sell just one asset from our basic 25 stocks each 4 weeks (except when out of town) and to buy in that period just one new asset to replace the one redeemed. We shall also maintain an allocation of roughly 67% in equities and 33% in bond assets or reserves, rebalancing and restoring those allocation percentages annually. We feel this caution is appropriate generally, especially so now when there is much uncertainty affecting the stock market.
12/31/18-Since the prior entry (12/27/18), there have no sales or buys from/for our basic 25 holdings, which remain: AEG; AYX; BRK/B; BRX; CAH; GILD; GM; HMC; INFY; LYB; MCK; NHC; OLP; RIO; SLB; SNY; SQ; T; TTD; TWLO; USB; VIOO; WPP; and ZS.
As of year-end 2018, my wife's and my liquid holdings stand at $1,306,085, up 1.16% from their level on 12/27. However, this is down $74,069 or 5.37% from their level at the end of 2017. (If not for the small inheritance mentioned in the just prior entry, our total liquid assets would be down 8.96% from the year ago level.)
Our liquid assets' yield continues to be at least 2.0%, and the total dividends actually now stand at $40,552, well above our target for 12/31/18 of $37,500. (In fact, that target was itself already significantly larger than an original target for 12/31/18 of $33,350.) The intention going forward remains to assure 2.00% or greater yield on our assets and at least 13.5% annual increases in our liquid asset dividends. (The total dividend targets have now actually increased at an average compound annual rate of 13.78%, and - knock on wood - to date there has been no difficulty in meeting each of them.)
Since the end of 2017, net total assets have decreased 4.18%, or $70,429, to $1,614,775. (Excluding inheritance or gift income through the years of $150,000, the average compound annual increase in my wife's and my net assets since our marriage 33 and a half years ago has been 18.65%.)
The drop in our holdings occurs in the context of the worst December decline in the Dow since the Great Depression. The S&P 500 also has fallen 14.76% since its record high of 2941 set on 9/21/18.
Our allocation goals call for equities at 66.67% and bond plus money market (or equivalent) reserves at 33.33% of total liquid assets. However, thanks to the rapid slump in stocks or stock funds in recent months, equities now make up a little less than 57% of our portfolio, with bonds or reserves at about 43%. As there are now a number of attractively priced assets available, it is tempting to promptly shift around $130,000 out of money market reserves and use these funds to purchase new bargain-priced equity shares, restoring the stock portion to two-thirds of the portfolio. This might be wise. However, it is also obvious that several factors weighing on the markets will persist for at least several more weeks or months, perhaps even one or more years. Therefore, I intend to buy more stocks or exchange traded funds (ETFs) as compelling opportunities present themselves, yet to do so only gradually, holding back much of our bond and money market account "powder" for perhaps even more persuasive deals in future.
Meanwhile, I hope for readers of this journal and their family and friends a prosperous and fulfilling New Year. All the best for 2019.
Disclaimer and Disclosure Statement
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.