State of the Stash – March

Oooof! Time to take my medicine and update my investment balances. Click here to behold the raging chemical fire that my dirty financial laundry has become (just kidding it’s not THAT bad).

AAAAND it’s gone….

Prior Update

In the February update, I ended the month at about $240,000. My portfolio had started to get hammered by the ‘rona. I was down about $26K, counting the new contributions which were tossed into the incinerator of market declines. While the financial beatings continued in March, I and my family are all healthy, and employed. So we are very grateful to lose only money.

CURRENT PORTFOLIO

In March stocks around the world continued to be slammed by fallout from the corona virus. Behold all ye investors and despair:

As you can see stocks were…I believe the technical term is “smoked.” The SPY was down over 16%. Emerging market stocks ($EEM) were down a little more. Foreign developed stocks ($EFA) were down a little less. REITs ($VNQ) got crushed.

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.

I also manage some of my portfolio based on a little systematic, trend and value strategy. It is nothing special, primarily just applying one of the simple moving average signals and combining that with a valuation trigger/overlay (i.e., I’m just not all that enthused about being long expensive stocks with negative momentum/trend). I have about 15% of my investments in this account/strategy.

Since the first week of March, I have been out of U.S. stocks in this account. The account has about 2/3 of the balance in cash/t-bills. The remainder is in foreign stocks (and so it getting killed like everything else). This is because U.S. stocks are expensive and have negative momentum/trend (based on the measures I use). If nothing else, I am finding this to be a nice release valve. Across all my investment accounts, I went through most of March with about 45% in short term bonds/bills.

The Implosion Begins

As I posted recently, I plan to start tracking my discretionary Roth IRA (dubbed, the “Fun Fund”) with more detail. I am compiling the relevant posts here. The Fun Fund was down almost 40% in the first quarter of 2020. It was horrible. I suppose the only thing to note about this account, in the context of this post, is that this account (and a couple of other small active accounts) are the reason I under-performed what one might expect with ~45% in bills.

THIS MONTH

I ended the month at ~$216,000. I went ahead an plowed an extra ~$8K into one of my accounts in the second week in March. Not good. It wasn’t totally market timing, just had some cash I was planning to invest at some point. I was down about 15% in my investments across all accounts from what I can quickly tell. My extra $8K plus the normal ~$5K that I contributed were overwhelmed by losses, which ended up completely devouring those contributions along with an additional ~$24K of my investment balances. Like I said. Oooof.

My allocation to short term treasuries/bills should have saved me more this month (at least versus the SPY), but I do have a higher allocation to foreign stocks and value stocks so I was down almost as much as the SPY.

Goals, What Goals?

With the new year/decade, I established some goals for 2020.

I am on pace with the 60% savings rate goal (or right around it) and $50K in annual savings/contributions to investments. My body composition goal is not going well. I have actually lost like 5 pounds during this shelter-in-place month, but I think most of it has been muscle as I have obviously not been to the gym. This week I started doing some HIIT type workouts, so we will see how that goes.

As for the reading goal, I really have to review my Goodreads and Kindle histories. I think I am missing a book in here somewhere. I know I finished When Genius Failed, and I’m almost finished with Concentrated Investing. I have Chernow’s House of Morgan and Gibbons’ Decline of the Roman Empire on the “nightstand,” but I think I am going to have to work in some others alongside those massive tomes. I recently picked up Jake Taylor’s the Rebel Allocator on sale for $9.99 (I am a sucker for the sub $10 price tag on kindle books). Maybe I will work that into the rotation after I finish Concentrated Investing.

ONWARD

So there we have it. The market was crushed and so was my portfolio (how long will it take me to reach FI at -15% per month?). The international and value tilts I have, (as well as my crappy discretionary picks) hurt me last month.