Pay Attention...Passively
Mother's Little Helper portfolio was DOWN today -$942.54 (0.89%).
Overall GAIN YTD: +$6,303.69 (+6.30%).
Our benchmark index, the S&P 500 is UP +6.73%
"By periodically investing in an index fund, for example, the know-nothing investor can actually outperform most investment professionals. Paradoxically, when 'dumb' money acknowledges its limitations, it ceases to be dumb."
- Warren Buffett (1993)
I made my buys for the year on December 28, 2018, see the new portfolio here (Click Here).
Passive Investing Requires You To Pay Attention
In case you haven't noticed it's been quite a while since I last posted. I took some time off and went to the Mecum motorcycle auction in Las Vegas and spent some quality time with my friends and fellow motorcycle collectors/restorers. I can't emphasize enough how important it is to not follow your stocks too closely, but to still stay informed about what's going on.
I experimented with following just enough news to stay involved and wrote nothing about the markets. It's nice to have a portfolio that doesn't require me to follow the goings-on of 20-50 companies every day. When your portfolio has you obsessed with checking every analysts opinion, religiously scoping out the pre-market index futures, and deciphering news and opinions on 20 or more companies, it may in fact be time for a professional to help you out. You'll have to decide what type of professional that is.
While we are just shy of the S&P 500 year-to-date, we are tracking it well. If the Euro and Europe continue to do well the overall portfolio should outperform the S&P 500 by the end of the year. In just the first month, our passively invested portfolio has gained over $6,300. While there is a lot of red in the portfolio today, I do want to point out that our TBT fund which is a 2X Ultra Short on long term US Treasuries is up over 1% today as a result of a pop in interest rates. Treasuries were mostly lower, as the yield on the 2-year note was flat at 2.12%, while the yields on the 10-year note and the 30-year bond rose 3 basis points (bps) to 2.69% and 2.95%, respectively.
Recall that I added the TBT to protect the portfolio from rising interest rates and falling bond prices. As bond prices come down and long term rates go up the value of the TBT goes up. Falling bond prices can also lead to falling stock prices; we're not there yet, but it's good to be prepared. My hope is that the TBT and our GLD fund will more than compensate for any decline in the S&P 500 index fund.
Overall I feel like the portfolio is well positioned for the rest of the year. Please feel free to send me any questions, comments or ideas.
As Always
Stay Invested
Clay Baker
Disclosure: I am personally invested long in some or all of these funds that appear in the Mother's Little Helper portfolio or manage these investments for my Mother's portfolio and may purchase or sell shares within the next 72 hours. I am also invested in other stocks and funds that do not appear in the MLH portfolio. Since I may on occasion discuss Bitcoin and other cryto currencies I disclose here that I personally own investments in the cryto-currencies listed here: VTI, VWO, VEA, VIG, XLE, MUB, TBT, GLD, Bitcoin, LiteCoin
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. This article is not intended to offer investing advice, guarantee 100% accurate predictions, or to be interpreted as providing a personal recommendation.
