It is time, yet again, for the monthly airing of my private financial laundry. My hope is that maintaining a journal of my savings will help provide additional motivation to save and allow me to spot trends. It will also serve as a record, so that I can look back and analyze.
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, my portfolio took a dip, due to my ten year anniversary and the sell off in foreign stocks. As I have mentioned before, I am a buyer of 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.
Investments
I have about 50% of my liquid assets allocated to foreign stocks. This month that proved to be a tailwind as the the EAFE index (foreign developed ex-Canada) was up about 2.5% last month. U.S. markets did even better.
As far as investment moves, I sold my GPT shares at $25.42 as I didn’t think the remaining spread to $27.50 was sufficient return to wait until the middle of October for closing. See Merger Monday Comes to my Portfolio. As Munger said, “Opportunity cost, is the name of the game around here.”
I haven’t done anything with ConAgra Brands (“CAG”) yet. As you may know, CAG announced an agreement to acquire Pinnacle Foods. While analysts and the press (and Jim Cramer) seem enthusiastic about the deal, CAG is diluting my shareholdings and new came out this week that KHC passed on the deal over price. I am planning to write a post about CAG and what, if anything, to do with my position. I think I will use KHC as the hurdle/opportunity cost for the analysis.
When I decide what to do with my GPT proceeds, I will post about it. Some potential options could be: 1) Berkshire Hathaway [See, Is Berkshire too Big to Succeed?, Bet with the GOAT or the goats on AAPL?]; 2) General Growth Properties [Retail REITs: Brookfield’s Acquisition of General Growth Properties]; or 3) maybe some asset managers as they were SMOKED this week by what I perceived as a “meh” announcement from Fidelity that is was going to a Zero expense ratio on two stock index mutual funds. See, WETF Update: Winter (Vanguard) is Coming!
July 2018
All that being said, let’s get down to the personal finance diary:
In our last episode (end of June) I fell back to about $174,000. As a reminder, I only include liquid investments in these monthly figures, as I don’t think it is very helpful to start marking my real estate and other illiquid assets monthly.
As of the end of July, I am back in the saddle! I was able to get back up to a little over $183,000 in investments.
Spending was pretty normal, although I had some unexpected automobile related expenses, which knocked maybe another $1K off my savings total. I don’t really budget, but I track spending via mint.
I also use a segregated account with automatic monthly deposits for most of the recurring type household expenditures. I set that up to run at about $40K per year. If I have to add more funds to that account, I know something out of the ordinary happened and I should take a closer look.
I also mainly automate contributions to investment/retirement accounts and then just deal with the consequences. Basically, a few years ago, I dialed up the contributions until it hurt and then pulled back a little. Thereafter, I try to contribute 100% of any raises.
Onward
To sum up, I nearly fully rebounded from the drawdown and anniversary gift last month! This comeback was due to contributions of about $5,000 to my investment accounts in July. I got three paychecks (with attendant 401(k) and HSA contributions) last month, so that helped quite a bit. My investments earned the remaining ~$4,000.
So with the power of savings and compounding, we are (almost) back on the move pretty quickly after a sort of large expenditure. Hopefully, I can cross $200,000 by the end of the year.
Thanks for reading!