mid year investment portfolio checkup

Fly on the beauty
photo credit: HAMED MASOUMI

For this Monday morning, The Money Writers decided to start you off with a cheerful bit of Monday reading – namely, how did our investments fare year to date? We’re a group of people who take our investments seriously, so we ought to have a pretty good take on the market. The results are surprising.

First of all, if you have any young children reading this post, avert their eyes..there will be blood. It has not been a pretty year in the market, certainly, and my family’s portfolio is no different. First of all, a little background: Bubelah and I share an “operating account”. When we were both working, we contributed to a joint checking account, and we continue to pay all of our expenses out of that account now that she’s not working. However, we’ve never invested jointly – she has her brokerage and retirement accounts, and I have mine. We keep each other informed of what we’re doing, and we take each other’s advice, but neither of us really worries about the other’s asset allocation or investing methodology. This may not be the ideal solution – but it’s what works for us. We keep our cash jointly and our investments separate (and thanks to the largess of the Feds she still gets to contribute to an IRA despite not earning a wage, although most assuredly still working).

So here’s the result. I prepared a spreadsheet with four columns: the first is the name of the investment, the second is the value of that investment on 1/1/2008, the third is the value on 7/28/2008, and the fourth is the net gain or loss on that account from January 1 to July 28. The accounts are ordered from our biggest gross dollar value investment to the least (i.e. we have more money in Vanguard’s High Dividend Yield Index Fund than anything else). If the graphic isn’t clear (and I suspect it isn’t, because I had a terrible time trying to make it appear here), click here.

If you look at that, there’s nothing pretty to see. Not one single investment has appreciated since 1/1. I didn’t buy any on 1/1 of course. Citigroup, for example, I bought in late January, so the price isn’t exact. But other than that, almost all of them were things we held at 1/1, so it’s a good indication of our losses since the beginning of the year. Almost 10% … a 9.85% loss since 1/1. Phew.

I try to remind myself, of course, that there are mitigating factors. Dividends were received, and some of my alternative investments (P2P, etc.) did bear a scattering of fruit. We also have approximately 15% of our net worth in trusty American dollars… yeah, those greenbacks that are losing 3% of their value per month. Thanks again, George/Hank/Alan & company. But the most important point is that many of those investments – such as Mechel and Vanguard Pacific Stock index – had huge runups in the past couple of years that we’ve owned them. We’re not down 9% from our initial investment, just from the beginning of the year. That having been said, nobody likes to be down almost 10%.

So what conclusion can be drawn from this exercise? Only two, in my opinion: (1) get an investing strategy and stick with it even if it doesn’t look like it’s going well in the short term, because there’s no way you’re going to beat the market* and (2) don’t keep all your eggs in the market. Honestly, I am not too concerned. We had a great runup over the past couple of years, and net/net we’re still doing quite well. I would love to see things going better, of course, but you have to be realistic – markets are cyclical.

So to see how the rest of the wealthbuilding group did (and some did better than others), check out how the rest of The Money Writers did:

So if you’re like me (and us) hang in there, work on your alternative income and chicken entrepreneurial projects and your side businesses, and pray for rain…

If you have any questions about my portfolio, feel free to email me – bripblap at the email service gmail.com.

* I always point out that you CAN beat the market if you’re willing to put an inordinate amount of time and effort into studying companies for investment. If you have a day job, or you just don’t like reading the minutiae of 10Ks, invest largely in index funds. End of story.

2 Replies to “mid year investment portfolio checkup”

  1. How much/which funds are in retirement vs. taxable accounts? You mention dividends, so I’m just curious about your approach to a combination of taxable & tax-deferred accounts…

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