Like Watching Paint Dry
Mother's Little Helper portfolio was DOWN today -$563.00 (+0.48%).
Overall GAIN YTD: +144.11 (+0.12%).
Our benchmark index, the S&P 500 is DOWN Year-To-Date -0.96%
"Investing should be more like watching paint dry or watching grass grow.
If you want excitement, take $800 and go to Las Vegas."
- Paul Samuelson
I made my buys for the year on December 28, 2017, see the new portfolio here (Click Here).
The Boring Truth
I lost 1/3 of my readers shortly after I announced this years portfolio of index funds. After a 45+% year gain in 2017, a switch to an all index fund portfolio has been met with more disdain than glee. Either my previous posts weren't educational enough or there was a perception that my future posts wouldn't be interesting enough. Whatever the cause and effect it is my own nature to look for correlations and try to figure out what the data is telling me.
On this single point the data tells me I'm doing the right thing.
Like Watching Paint Dry
I can't argue with anyone who tells me this portfolio is boring. With the portfolio still beating the Year-to-date performance of the S&P 500 I'll stick with the hand we have. But the simple fact is that it should be boring. You should sleep well at night knowing that your investments are not shooting up and collapsing down in a matter of hours or days. You shouldn't wake up in the morning and instantly check the stock market to see if you have a future; that's my job. As I stated at the launch, this portfolio is intended to be a foundation for future investing. This portfolio provides global diversity and exposure to all sectors and all markets. After we see some success with our foundation we can begin to add on companies that will provide growth and dividends, followed by companies that can provide even greater growth in lieu of dividends. In the coming year I hope to be able to roll profits into dividend paying stocks to generate income throughout 2019. I will also make an assumption that we'll add a modest amount of cash to the account.
"When investing in stocks, being early is the same as being wrong.
You can buy too early, sell too early or stop researching too early.
Rarely does an investor buy a good company too late."
- Clay Baker
Changes I Will and Won't Make
I've made a couple of small changes already this year, the most notable being the addition of the XOP, XLE and DBC funds in order to get greater exposure to commodities. I believe that over the next decade investors will make enormous profits in commodities. The XOP and DBC provided our biggest gains today, albeit small gains, I am encouraged that these investments are not early and should provide an excellent hedge against a down turn in stocks and exposure to increasing commodities prices. Unlike the stoic buy-and-hold strategies of the previous two years, I may make some modest changes along the way this year, or I may leave it alone. Right now I'm happy with this portfolio and see no reason to make any changes for the remainder of the year provided that I haven't made a buffoon blunder; this is always possible.
One of the changes I will NOT make is to tailor the portfolio or my opinions to those readers I've lost. Chasing the latest momentum, high flying stock is a guaranteed method for losing money and I have no interest in participating in that market.
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 but may be mentioned or related to this article. It is not my intention to advise or encourage the purchase or sale of any security. 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: DBC, 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.