Portfolio Update July 1

Wow, half the year has gone.  It is time to take a look at our investment portfolio, analyze it and decide if any changes are needed.

Vanguard:

We have Roth IRAs invested in Vanguard's S&P 500 index fund, plus regular IRAs and a taxable account that we tranferred to Vanguard from a financial advisor.  The advisor had us in a large number of mutual funds, and the cost to sell each one is $20 per account; therefore we have not been in a hurry to sell them.  We did move out of the worst performing ones late last year and we just analyzed what was left. We have several funds that are significantly underperforming their associated index and if that continues at the end of the year, they will be on the chopping block.  After anaylzing everything we did decide we were overexposed in US stocks and so we sold some of our S&P 500  fund and bought Vanguard's index funds for international bonds and for international stocks.  Overall, these accounts are up 5.23% this year. 

One of the things a lot of people track is the income generated by their portfolio.  So far this year, this portfolio has generated $2788 in dividends and capital gains.  I expect that amount to rise as we have increased the bond percentage in our portfolio from about 25% to about 30%.  My husband is 60 and I am 55; we are getting to the point that we need more stability and income in our portofolio.

My 401(k):

My 401K was invested 25% in MFS Agressive Growth Allocation Fund A, 25% in Franklin Total Return Fund A and 25% in Janus Triton, with 12.5% each in MFS Growth Fund-A and Delaware US Growth Fund A.  For the first six months of the year, the YDT performance was 1.77% which is lower than my other investments.  

I decided to re-allocate and now I have 38% MFS Government Securities Fund A, 20% Janus Triton, 19% Oppenheimer International Small Mid Co A, 11% Delaware US Growth Fund A and 12% Pioneer Fundamental Growth Fund A

For the first six months of the year, my dividends, capital gains and other earnings (as opposed to increases in share value) totalled $1,647.85.  I expect that to increase in the next six months due to the increased bond holdings.

Motif Investing:

This was a toy for me to play with.  Motif Investing allows you to invest in up to 30 different companies at one time, for one fee.  You can either assemble your own group (Motif) or buy one of theirs.  Once you own the stocks, you can sell them one at a time, or you can sell the whole motif for only one fee.  The motif I developed isn't doing very well--my $1000 is down to $960, though I have collected some dividends.  Overall, I invested $7,000.  My portfolio is worth $7223.69 and over the last few months I have transferred $320 in dividend income to Loyal3.  So far in 2016, I have earned $105.31 in dividends at Motif, for a yearly yield of about 3%.  If you want to invest via Motif, use this link and we both get $100.

Loyal3:

I started investing with Loyal3 as an incentive to bring lunch from home rather than to buy it from the lunch counter in my building.  I got tired of that, but have used the account as a place to invest the dividends I got from Motif.  Through Loyal3, which is a no-fee stockbroker, I own stock in AMC Theaters, Alibaba, Disney, Hershey, Intel, Kohls, Target, TimeWarner, Unilever and VF Corp.  So far, I've broken even; AMC, Hershey, Intel and Unilever are up, the others are down.  My $630 investment has garnered me $5.91 in dividends for an annual yield of about 2%.

Prosper:

So far this year we added $300 in new money to this account and we transferred $550 from Kickfurther to Prosper.  Our XIRR return on this account is 11.48%. Prosper shows my seasoned returns to be $12.85%.

Lending Club:

I'm not liking all the things I've been reading about the corporate troubles Lending Club has so I haven't wanted to invest more money with them.  I haven't pulled any out, but I'm thinking about it.  Right now my account value is $19,791.89 and my adjusted account value (Lending Club computes a hypothetical value based on the number of late notes and how late they are) of $19,173.84.  The increase is only $313 so far this year.

Kickfurther:  

Kickfurther says my profit since the inception of the accout is $382.17.  However, they have yet to subtract anything from that for bad debts.  They paid me for the first four bad deals I had, in the amount of about $175.  Right now I have about $260 in deals that aren't paying.  Some I think have some recovery potential--KF has indicated that it has the inventory and I personally think the inventory will sell at some price (bamboo kitchen drawer organizers and silk comforters); the others I suspect won't give us much if anything, but hopefully I'm wrong.  Bottom line, for in investment of about $2500 made in dribs and drabs, mostly from June-Dec 2015, there is a real possibility that the value of the investment is a $20-50 loss, if you consider the $175 that KF refunded me to be a loss, along with my predicted loss from the deals I have that aren't paying.  The real questioin is how much value can KF get out of the bad deals; and at this time we haven't seen evidence they can get any.  However, they have a legal team working on it now. I think Kickfurther has potential; I'm just not sure the pricing is right on it.  If you want to try it, use my link and you get $5.00 toward your first investment.  

*Part of Financially Savvy Saturdays on brokeGIRLrich, A Disease Called Debt and One More Broke Twenty-Something* http://diseasecalleddebt.com/extreme-saving-no-new-clothes/ 1. How We Avoided Buying New Clothes for a Whole Year http://brokegirlrich.com/the-little-costs-of-friendship/ 2. The Little Costs of Friendship http://familymoneyplan.com/interview-brokegirlrich/ 3. Behind the Screen Interview #7

End of 2014 Report

Photo compliments of Christmasstockimages.com

The end of the year is time when we take stock of where we have been and where we are going.  2014 was a year of changes in our financial management.  I inherited money from my father and we switched from managing all of our own investments to hiring a financial adviser. I'm not going to give out dollar values but we believe our portfolio is on track to lead us to a comfortable retirement.  Here is what we have and how it is invested, along with the changes we've made this year:

My 401k:

This is a substantial account as I have been with the same firm for twenty years.  For quite a few years the firm has contributed 5% of our salary to the 401k; prior to that, they contributed 4%.  I've been contributing 15% of my pay for quite a few years but I really increased the value of this account this year.  I got the first installment on my inheritance in June, so I had about that much money withheld from my pay and put into my 401k, in essence living off that tax-free money and shielding my paycheck from income taxes by investing it for retirment.  The 401k is with Hartford Retirement and the funds I own are Delaware US Growth A (DUGAX), Franklin Total Return A (FKBAX), Janus Triton A (JGMAX), MFS Aggressive Growth Allocation A (MAAGX), and MFS Growth A (MFEGX), I put about one-third of the money in Franklin Total Return (basically a bond fund), and split the rest among the stock funds.  Between dividends and increased value, I earned over 6% last year.

My husband's 401k:

This is a relatively small account.  He has been at his job for about ten years but has only participated in the program for about five.  The fees are high and the investment choices are low.  I finally talked him into switching from investing in a money market fund to investing in a stock fund and of course the market then went down.  Still I think the long-term potential is better with stock and the whole point of a tax sheltered account is to grow it.

Our Roth IRAs.:  

We've had these account for several years and while we haven't often maxed them out, they are no longer a small part of our holdings.  They are invested in Vanguard 500 Index Admiral Share (VFIAX) which went up over 15% last year.  

Our Regular IRAs and other Mutual Fund Holdings:

Our IRAs were started years ago when neither of us could contribute to a plan at work.  They were invested in the hottest funds of the early 1990's and had not been substantially changed since that time.  Life and children got in the way of keeping up with the funds, and in general, they went higher every year, so things must have been ok, right?  Upon doings some research, I realized that there were better options out there.  We also made the decision to hire a financial adviser.  He/his company put us into a portfolio of twenty-three different mutual funds.  Looking at what they did, I can see where each fund plays a different role in the portfolio but I'm not going to list them all simply because typing all that would drive me up the wall.  We bought into that portfolio in August and the share prices fell shortly thereafter.  While dividends meant we earned a little money on this large portfolio, the share prices are not back to where they were when we bought.  That, coupled with the fees we pay, makes me question the wisdom of using this adviser.  We'll give it another year or two but if I don't see better results, we will go back to doing it ourselves.

Peer-to-Peer Lending:

My investment in Lending Club started out as a toy. I read about it online somewhere, thought the idea sounded good, and made a small investment.  I tried some different strategies and read a lot and became more convinced this was a good idea.  Before the end of the year I had also opened an account at Prosper.  Between July and December, I earned $124 from money that had been sitting in a savings account earning almost nothing.  

Savings Account:

We have a savings account at our bank, which, like most bank accounts, isn't paying much of anything.  At the end of the year we had about two months living expenses in that account, which is about where we want it right now.