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 March.
In March, my retirement pile was brutally assaulted on 2 fronts:
- My cash pile was depleted due to home construction expenses. I had a bunch of bills to pay and pay I did to the tune of $25,000 (wow, I hate writing these checks!). I’ll still have other expenses (flooring, trim, railings, sigh…), but I shouldn’t have to dig into my savings again. I hope to start building my cash back up again as the year progresses.
- My investments also took a hit as my tech heavy portfolio got walloped. This is a bit of a relief actually. The markets, especially technology stocks, were (still are) overheated.
Here are the numbers as of 4/1/2014:
- Days elapsed: 91
- Days remaining: 274
- 2014 gains: -$30,871
- Left to go (2014): Goal accomplished!
Since the start (1/1/2013)
- Days elapsed: 456
- Days remaining 1044
- Gains since 1/1/2013 gains: $252,356 (including my contributions)
What does it all mean?
Almost nothing. A year ago, I was freaking out over bad performance. Now, I can say with a straight face that I couldn’t care less. Just like the seasons and many other things in life, the stock market is cyclical. Periods of growth will be followed by downturns and recessions. It is the way of things.
An awful lot of money has been lost by folks who think they can time these cycles. If someone tells you they can, they are probably trying to sell you a financial product. Listen with skeptical ears.
If anything, I don’t think that the markets have corrected enough. After the spectacular performance of 2013, the markets could use a healthy breather.
I’m pretty much out of the stock picking game in favor of Vanguard index funds. However, I make an exception for Berkshire Hathaway. This past month, I dumped some of my Apple stock in favor of Berkshire.
My reasons for liking Berkshire could constitute 10 posts, so I won’t go into them here. That is a story for another day.
*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.
**Anyone going to the Berkshire meeting next month? I am and cannot wait! I went for the first time last year and thought it was pretty great. Where else can you ask a couple billionaires questions on investing? They don’t call it the ‘Woodstock of Investing’ for nothing!
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