------------------------------------------------------------------------------------------------------------------------
Welcome to My Personal Finance Journey! If you are new here, please read the "About" or "First-Time Visitor" pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
------------------------------------------------------------------------------------------------------------------------
Click here to enter my free giveaway for 2 copies of H&R Block At Home Premium Edition
Overall, the 1st half of 2011 went very well.
I was able (surprisingly) to successfully complete the required classes in my chemical engineering PhD program, and this summer, I have been getting a nice start to my research in preventing the protein aggregation that is believed to be a cause of Alzheimer's disease.
As far as the stock market goes, this was a nice upwards trend during the first 5 months of the year, and investors were enjoying ~6% gains in their portfolios. However, recently, the market has dropped off, and we are back to only about a 2% overall gain in 2011. Not bad, but still, not the best returns in the world. Let's hope that things improve as we get in to the Fall.
With all of the up and down that has occurred, let's take a look and see how it affected my net worth progress...shall we?
Net Worth Growth (not including condo)
From 29-April-2011 (when the last portfolio update was published - see link below for more information) to 18-June-2011, the S&P 500 index went down 6.54%. Yikes! Pretty nasty little run for a month and a half, eh?! Let's hope it doesn't stay this way!
My Personal Finance Journey - April, 2011 Portfolio and Net Worth
During that time period, my net worth (excluding condo ownership) decreased by 0.60%.
The main reason that my net worth was shielded from the blunt of the market decrease was that I was paid my salary for the entire summer at the end of May. However, overall, I am pretty satisfied with this result.
Condo Equity Growth
Currently, I have 11.4% home ownership in my condo (up from 9% at the end of December, 2010), with this accounting for 27% of my real net worth (so net worth subtracting the condo loan - this is different from the net worth above).
Condo Equity Growth
Currently, I have 11.4% home ownership in my condo (up from 9% at the end of December, 2010), with this accounting for 27% of my real net worth (so net worth subtracting the condo loan - this is different from the net worth above).
Update on Financial Goals for 2011
I have now achieved the following financial goals in 2011. I have done quite well I think - thanks to everyone's help for keeping me motivated and accountable!
I have now achieved the following financial goals in 2011. I have done quite well I think - thanks to everyone's help for keeping me motivated and accountable!
- Have contributed the maximum allowed by law for 2011 to my Vanguard Roth IRA ($5000). I am very proud to have achieved this!
- Am maintaining slightly over my target of 6-9 months of expenses in a cash reserve fund in my Dollar Savings Direct high yield online savings account. This is due to being paid my entire summer salary (through August) at the end of May. However, this should correct itself as we get towards the end of the summer.
- Have rebalanced my mutual fund portfolio to meet my asset allocation target %'s (75% equity, 25% fixed income overall)
- Have donated $1,300 to Multiple Sclerosis Foundation in 2011 (5% of income) and passed my target fundraising amount of $5000 for my MS 150 ride that took place June 11-12, 2011. I will most likely be shooting for raising $7500 for 2012. Rock n' Roll!
For a detailed list of my short term, mid term, and long term financial goals, click on the link below:
My Personal Finance Journey - Financial Goals
Review of Current Asset Allocation (excludes condo)
- Overall Fixed Income / Equity Allocation
- Currently, 29% of my net worth is invested in fixed income instruments (cash or bond funds), and 71% is invested in equity.
- This is 4% off from my targets for these categories of 25% (fixed income) and 75% (equity), but still within my +/- 5% allowable band limits.
- Equity Allocation
- In the equity portion of my portfolio, 73% is invested in US Domestic Equities with the remaining 27% being held in international equities.
- This is almost perfectly aligned with my equity breakdown targets of 71% and 29%, respectively, for US Domestic and international holdings.
While the overall percentages for these categories looks fairly good, a detailed look (table below) at the allocation breakdown reveals the real story and provides for better analysis of the current state.
Remember: a red flag goes off if your current % allocation in a category is greater than +/- 5% off of the target allocation. This is my trigger that I need to rebalance that aspect of my portfolio.
% Cash (money market target 5%) 10%
% non-inflat Bond Funds (target 15%) 15%
% TIPS Bonds (target 5%) 3%
% International Equity (Target 11%) 10%
% International Emerging Markets (Target 11%) 10%
% Domestic Large Cap (Target 8%) 7%
% Domestic Small Cap (Target 8%) 9%
% Domestic Small Cap Value (Target 14%) 14%
% Domestic Large Cap Value (Target 13%) 13%
% REIT (target 10%) 9%
Analyzing my current asset allocation percentages, it appears that my current asset allocation is aligned with my target levels with the exception of the cash portion of my portfolio. This is once again due to the fact that I have more cash than normal on hand in my money market portfolio from being paid in advance for the entire summer period at the end of May.
Because of this, no action needs to be taken at this time, as this will correct itself as we move forward in the summer and I naturally spend more money.
My next moves for the June-July, 2011 time frame will be to do the following:
- Now that I have fully funded my Roth IRA, any extra money I have will most likely go towards paying off my condo loan and obtaining even more equity in that investment. The only other option I would have is to invest in my individual mutual fund (taxable) account. But, I feel that it would be a more efficient use of my time to build up more equity in my condo. What do you all think?
- Continue investing $41.67 each month in microloans to help the working poor in Peru and/or Nicaragua This is part of my 2011 goal of having $500 in microloans. I am currently more than half way there!
- Save 30% of any income from blogging for 2011 tax payments next year at tax time.
Wish List
- At some point, purchase the Vanguard Total Stock Mkt Idx (MUTF:VTSMX) to replace S&P 500 index fund. This gives better, broader diversification to the US stock market.
- Install a stacked washer/dryer combination unit in to my condominium. This one will be a long shot, but it just may be possible! More than likely, this will be something that I will do in 2012-2013.
How about you all? How did you progress with your net worth in May-June 2011? What are your thoughts about the strength of the market right now? Do you think it will rebound?
Share your experiences by commenting below!
