2021 Q3 Financial Updates

I haven’t had a set of rules that I wanted my portfolio to meet, but after my last reading of The Intelligent Investor, I thought it prudent to think through this and set firm goals.

 

Benjamin Graham tends to recommend a portfolio that is pretty much 50/50 – stocks versus bonds.My issues with this are bond yields are dismal, and given the long term, stocks nearly always beat bonds.

 

I’ve since come up with my desired portfolio breakdown:

  • Cryptocurrency (Bitcoin only) – 10%
  • Bonds – 10%
  • Cash and Stocks – 80%

 

Cash and Stocks are further broke down as follows:

  • Foreign Stock Index – 10%
  • S&P 500 – 32.5%
  • Cash and Individual Stocks – 37.5%

 

Within Cash and Stocks, I’ll invest a maximum of 5% in any individual stock, a maximum of 5% in total speculative stocks (like Tesla), and a 5% maximum of the portfolio will be in stock options.

 

Our net worth has increased by 75% YTD. The 75% includes a recent reduction I made to the value of our home within our net worth. Online estimates have been pushing higher, but we recently refinanced our house and have a new appraisal, bringing us back to reality.

 

The refinance will help us put more funds away each month, decreasing what we need to sustain our budget and lifestyle.

 

I also took my first significant loss in options, which was kind of refreshing. I had been pushing a 65% annualized return on my risk capital YTD, which I knew was unsustainable. With the recent loss, I’m sitting at a 25% ARORC. I’m far more comfortable at this number and believe it gives a better assessment of my options trading.

 

You’ll notice I did a considerable rebalance of my portfolio since last quarter. This rebalance was due to putting into place my goals above. I’ll plan on setting an annual rebalance, and I don’t plan on doing so regularly.

 

Current Holdings

Stocks

  • Verizon
  • Kroger
  • SPDR S&P 500 ETF Trust
  • Vanguard Total World Stock Index Fund ETF

Mutual Funds

  • State Street S&P 500 Index NL A
  • State Street Global All Cap Equity Ex US Index NL

 

Options

  • AT&T 01/20/23 @ 25 C BTO

 

Bonds

  • Vanguard Total Bond Market Index Fund ETFI Bonds

Mutual Funds

  • State Street US Bond Index NL A

 

Cryptocurrency

  • Bitcoin
Photo by Maxim Hopman on Unsplash

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