State of the Stash – April

It is time, yet again, for the monthly airing of my private financial laundry.  Mostly thanks to Mr. Market, I enjoyed a pretty nice increase this month.

All of the prior updates in this series are available on the Savings Diary page.  The first, I’m Just Saving…Personal Finance Diary kind of provides the “origins story.”

Last Month

In March, the S&P 500 was up about 1.8%, with emerging markets stocks up about 2% and foreign developed (EAFE) up about .80%.

In March I saved about $2,000.  I ended up having to spend a couple of thousand dollars on an unexpected medical bill for my little one.  Thankfully, it was nothing too serious.

Market increases combined with my new savings to put me at a little over $198,000.  My portfolio grew about 1% and I saved the rest.  

Current Portfolio

I remain “overweight” foreign stocks.  See Media Pin of the Week – More GMO,  Weekly Media Pin – Grantham on Graham,  Best Foreign Value Factor ETFs,  Resource Roundup: More CAPE, and Foreign Value Factor ETFs Update.

About 50% of my overall portfolio is allocated to non-U.S. domiciled stocks.  I also manage a bit of my portfolio based on a little systematic, trend strategy. I’m only actively stock picking (including value tilt and other factor fund allocations) in about 10% of my portfolio.

I am getting close to actually starting the Tesla Tithe now that they raised capital (pretty much as predicted, though I said they should do it after printing a good couple of quarters…seems they waited a bit too long). A post should be forthcoming on that once I pull the trigger. This won’t be a large enough position to really impact my overall allocation, but it should be fun to discuss.

I’m also going to start commenting on some of my current and potential positions in this section of these monthly updates just to track my thoughts. Coty had some interesting action this week. On Friday it was up over 10% at one point. I couldn’t find any new news, but on Stocktwits several posters mentioned the “new huge insider buy.” It looks like they were referencing the SEC filing reflecting the closing of the tender officer J.A.B. affiliates made months ago, which was been extended several times for closing conditions. If that really was the reason for the move, I find it very interesting and very inconsistent with the hypothesis that markets are very efficient. JAB now owns 60% of Coty (but that was known for a while).

I don’t like the price JAB paid, especially to gain voting control (should be some additional premium), so I didn’t tender. At least they didn’t take the whole enterprise “under” and send me a check. As a reminder, I’m less enthused about this position given what I perceive to be the changes in incentives at JAB. I am looking to exit if it approaches fair levels of valuation.

I also bought some Series I savings bonds before the end of April to lock in a .50% fixed, real rate. Turns out I didn’t need to hustle to get the fixed rate component, as the .50% rate was continued in May. I discussed I-bonds previously here and here. I use them as a hybrid emergency fund/bond allocation.

This Month

In April the S&P 500 was up about 4%, with emerging markets stocks up about 2.1% and foreign developed (EAFE) up about 2.8%. I benefitted from a strong tailwind from the market this month.

As discussed recently on my blog, I try to use the revelations of behavioral finance/psychology to structure my financial affairs. See I’ll Have What He’s Having – Behavioral Personal Finance.

I automate my saving and spending as much as possible.  This is especially true for the big items. As a result, I contribute a little over $3,000 per month to new investments as my “baseline” of automatic contributions to 401(k)s and the like.

That is essentially all I did this month, with no special contributions or unusual spending. As I recently discussed, my savings rate is currently about 55%. I usually check in on that figure every few months.

The market increases combined with my new savings to put me at a little over $206,000.  So market gains contributed like 1.6 times my savings efforts. That is pretty exciting!

Onward

To sum up, I saved a little bit more $$$ in April and my investments smoked my puny efforts. This follows March, where the portfolio growth pretty much matched my efforts. Pretty exciting evidence of an emerging snowball! I know there will be months in the future where the market declines offset many months of contributions from the fruits of my labor. I will try not to get to high or too low, but I am feeling it after this month.