My main goal is to build a portfolio of $1,000,000 in 1500 days with no debt*, starting from 1/1/2013. Every month, I provide an update on my status. My goal for 2014 is to get my portfolio up to $768,536. Because we saw exceptional returns in 2013, I have accomplished this goal. Time to look back on the month of January.
All good things must come to an end. After 8 month of gains, I had a small loss in January. My portfolio started the month at $869,635 and ended the month at $858,561. The investment portion (non-cash) started at $819,723 and ended at $818,214.
- Most my of decline this month was due to $10,000 I took out of savings to pay for the Uglyhouse renovation. It drives me nuts that I’m not saving anything right now. Uglyhouse is eating all of my income and now, some of my savings.
- Compared to the S&P 500 index, I actually did well. The index dropped 3.5% while I lost .1%. This is attributed to holdings** in facebook and Google who both had earnings reports that made Wall Street happy. If it had not been for a huge decrease in Apple and Amazon, I would have been positive for the month.
Here are the numbers as of 1/31/2014:
- Days elapsed: 31
- Days remaining: 334
- 2014 gains: -11,074
- Left to go (2014): Goal accomplished!
Since the start (1/1/2013)
- Days elapsed: 395
- Days remaining 1105
- Gains since 1/1/2013 gains: $272,518 (including my contributions)
- Left to go: $141,439
The Portfolio is a Changin’
I’ve lamented many times that I need to to make changes to our investments and we started doing just that in January. I have two major updates to announce:
- 401k rollovers: Mrs. 1500 had two, high fee 401(k)s from past employers. We opened up a Vanguard account and rolled both over. We split the money between VFIAX and VITAX.
- Bye-bye Apple: The first quarter of 2013 was characterized by Apple destroying my returns. This is my own fault as no one in their right mind should have close to 25% of their portfolio tied up in a single stock. I think Apple’s position today is worse than it was a year ago. Apple’s moat is now gone. Android/Google are taking bigger bites out of Apple every quarter. I’m not sure if a closed ecosystem such as Apple’s can survive long term. ‘Not sure’ is the key phrase here. I started selling Apple shares and will continue to whittle down my holdings as the year progresses. Similar to the Mrs. 1500’s 401(k)s, the money is also going into a Vanguard account.
One final thought
January was a bad month for the markets, but corrections are to be expected, especially after the great run up we had in 2013. If you haven’t already, please check out this chart. While the markets aren’t exceptionally high, they are still above the mean. While I don’t have a clue what the future will bring, that chart tells us that further drops shouldn’t come as a surprise.
No matter what happens though, I encourage you to stay the course. Freaking out and yanking your money out could be one of the worst mistakes you ever make. Stay in it for the long term and don’t worry about little bumps in the road. As always, I’ll let James Collins have the last word.
*I still owe something like $120,000 on my mortgage. Because I have a low rate, I firmly believe in not paying it off. My compromise is to have enough money put away to pay off the mortgage at time of retirement. So, to retire today, I would need about $1,120,000.
**Don’t copy me! I am not a financial adviser and I have come to believe that buying individual stocks is a bad, bad idea for most. I still owe you a post on that one. It’s coming.
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