Archive for the tag 'Investing'

Honestly, as I said previously, it could have been lots worse–like tons worse. Consider the price of oil, at least partially due to the crisis in Libya, and the disaster in Japan, and that adds up to a possible stock market collapse.

That did not happen.

The Vanguard Total Stock Market Index Fund (VTSMX) was up in March, a full 2.22%. This was in addition to the annual 1.59% yield it pays. The Vanguard Total International Stock Index Fund (VGTSX), the fund I believed most vulnerable, was also up for the month, a very small 0.43%, while paying 1.53% yield annually.

In the fixed income part of the portfolio, the Vanguard GNMA Fund (VFIIX), lost a cent on the month to be down .09% while paying its 3.28% yield, and the Vanguard Total Bond Fund (VBMFX) was down four cents for the month, finishing lower by 0.38% while paying 3.34% yield.

Despite the disasters, the market was fine–if mediocre. Let’s hope that things go even better in the months to come!

While February ended in a rather dismal way, for most of the month the stock market performed quite nicely, thank you.

Starting backwards this month in our fixed income area: the Vanguard Total Bond Market Fund (VBMFX) was up, a minuscule .19% while paying a 3.34% yield; its accompanying Vanguard GNMA Fund (VFIIX) was up an almost identically meager (”almost” but seems identical due to rounding) .19% while paying a 3.28% yield.

In the stock portion of our portfolio, the Vanguard Total Stock Market Index Fund (VTSMX) was up 1.86% for the month while paying a 1.59% yield, and the Vanguard Total International Stock Index Fund (VGTSX) was also up, a meager 0.56%, while paying a 1.53% dividend.

So despite the downturn at the end of the month, February was yet another positive month for our model portfolio. While March looks more difficult so far, let’s see how things go!

I assisted one of my friends in setting up her 401(k) this past week. Although I wish she would put away more (but I almost always wish people would put away more), the thing that struck me most about her plan is that there were so many fund choices–possibly as many as fifty.

While I realize that I use only four funds (and could really get by with just three and be fine and dandy) in my model portfolio, isn’t more choice a positive thing?

After being overwhelmed by my friend’s plan, I’m less sure.

Remember how in March of 2009 those of us who were invested in the stock market were getting our heads handed to us on platters?

Here we are less than two years later and the market has basically doubled.

So once again, it shows: don’t panic. Stay in the market. Sooner or later–in this case sooner–it came back and more.

One of my colleagues at work was talking about how the stock market had done so well and how it would be wise to get back into the market after having sold in March of 2009. Please, don’t get into these situations! Just stay in.

January was a positive month for the stock market–just as 2010 was a positive year. How well did our portfolio do to start off 2011? Let’s take a look.

The Vanguard Total Stock Market Index Fund (VTSMX) was up 0.971% for the month (keep in mind this fund also yields 1.80%). The Vanguard Total International Index Fund (VGTSX) was up, just a hair, at .06% and paying a 2.33% yield.

In the fixed income side of our portfolio, the Vanguard GNMA Fund (VFIIX) was stable, finishing the month unchanged (but still yielding 3.13%). The Vanguard Total Bond Market Index Fund (VBMFX) was also unchanged for the month, paying a 3.39% yield.

It wasn’t a huge month, but it was quite decent, and hopefully this steady pace will continue for quite some time.

Ryan

Coinstar: What Happened?

One of the stocks I have a holding in, Coinstar (CSTR), tanked recently, losing about 1/4 its value in a single day.

Why?

Apparently, overly high expectations on the company’s performance is what brought them tumbling down, and hard.

Let’s be clear: these were expectations, not actual results. The company was profitable–announcing an earnings estimate of between 65 and 69 cents per share–but announced that it would be earning less than the 79 to 85 cents per share that many forecasted.

Does that make things substantially worse at Coinstar? Not really. Perhaps the stock just got ahead of itself. I do plan to hold onto my shares, and I’ll continue buying in as well. But if one looks for reasons for the dramatic share price collapse, it’s right there.

Ryan

Is Apple All About Steve?

Apple, Inc. not only announced breathtaking, record breaking results this week–they also announced that co-founder and CEO Steve Jobs would be taking his third medical leave from the company since 2004.

Just how ill Jobs is is unknown, although he has not relinquished the title of CEO.

In the meantime, the stock slipped a bit–all of 2.25%–and then rebounded a bit–1.25%–before Wednesday morning.

While the health of Steve Jobs concerns me as both a stockholder and a fan of the company, I think the company’s recent track record when Jobs was out of action previously shows that Apple is not just about Steve.

Now that it’s 2011, what am I buying into?

Really, more of the same.

The vast majority of my money will channel into the same four funds we’ve discussed over and over in my model portfolio–mentioned so many times I won’t even link to them here: the Vanguard Total Stock Market Index Fund, the Vanguard Total International Stock Index Fund, the Vanguard GNMA Fund, and the Vanguard Total Bond Market Fund.

I’ll spend some time over the next few weeks picking a few stocks I’ll sell and a few I’ll buy for the year. I’ll regularly invest into I series savings bonds and Google (GOOG), Coinstar (CSTR), and maybe another stock or two.

It seems in 2011, my investing plan is more of the same.

Typically I spend some time rebalancing my portfolio at the end of the year, although last year it took me until February to get that done. In 2009 I decided on a 70% stock/30% bond mix with 47.5% of my total portfolio in domestic stocks, 22.5% in international stocks, and 30% in high quality bonds.

I decided in 2011 to keep that 70/30 mix. When I surveyed my end of year portfolio, the proportions were 53.42% domestic stock, 16.5% international stocks, and 30.05% high quality bonds, meaning that my stock/bond ratio was 69.92/30.05 (with a few missing hundreds of a percent).

That’s close enough for me; I’m not rebalancing. The effort isn’t worth it when things are that close.

Initial numbers and my gut tell me that 2010 was a fine year for investing; let’s really run the numbers extensively to see how 2010 really went.

Our largest fund holding, the Vanguard Total Stock Market Index Fund (VTSMX) was up, 13.08% for the year while paying a yield of 1.92%. The Vanguard Total International Stock Index Fund (VGTSX) was also up, 6.63% for the year, while yielding 2.33%.

In the fixed income part of our portfolio, the Vanguard GNMA Fund (VFIIX) was up 0.85% for the year; along the way it yielded a 3.41% dividend. The Vanguard Total Bond Fund (VBMFX) was also up, 2.31% for the year, while yielding 3.13%.

All in all, it was a great year for the portfolio. Every fund was up, including the steady bond funds. If anything didn’t do as well as I would have liked, it was the international stock fund. Compared to the S&P 500 for 2010, the VTSMX fund did incredibly well, beating the benchmark in growth 13.08% to 12.64% and in yield 2.33% to 1.86%.

I’m totally thrilled by how things went in 2010.

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