The year 2020 is over, and will no doubt go down as one of the craziest we’ve had. Looking back, I’m still trying to process the timeline and events of everything that happened. Hopefully we can get back to some sort of normal in the new year.
Let’s take a look at this month’s special edition year end report as the journey to financial freedom continues 💎💎💎
Surprisingly the major US indexes all posted positive (but very different) results on the year. With the Dow Jones ending up 7%, S&P 500 gaining 16%, and for the Nasdaq an impressive 44% increase. I can’t remember this much of a difference between these, and this trend is definitely something to take note of.
The final calculation of the brokerage portfolio growth (factoring out contributions) came out to approximately 10.5% on the year. Underperforming the S&P by a decent margin. With the brokerage portfolio being built much more on the defensive side, it is somewhat expected. I guess this is the price to pay for peace of mind…
This made the Feb-Mar crash slightly more bearable, as the value held up well. However, the tech rally since then has just been too much for this account to catch up for the year.
Retirement account – 401k
The 401k percent increase was strong for the year. With growth (factoring out contributions) of approximately 21.4%. This return was due to lucky timing of a bond to stock transfer in mid-Mar. But due to the quickness of the recovery, I only transferred a third of the total bonds planned. Current asset allocation is 70% US index, 15% International index, 15% bond index.
This employer account does not recognize dividends (from vigorous research apparently they get added to the total NAV or something), so they are not included in these normal reports.
Retirement account – IRA
The IRA results had some more luck with transferring part of some money market funds to an index in mid-Mar with a total account gain (factoring out contributions) of approximately 27.2%. A much smaller account value though consisting of a few individual stocks, VTI, and about 15% cash.
Those early months had a sort of fog of war aspect with all that was going on. But looking back, more cash should have been put to work in the accounts when the markets were down like 35%. However, that kind of record recovery was very surprising, and as they say, hindsight is 2020. Here is a screenshot taken during some of the madness earlier this year:
😱 It’s still hard to believe we got back to record highs so fast after the financial markets were falling apart…
Below is the dividend income received during December: (Values are in USD)
ADM – 23.40
ALE – 24.70
AVGO – 25.20
AWK – 28.60
AWR – 18.43
CHD – 24.00
CVX – 25.80
D – 13.86
DFS – 18.04
DPZ – 1.56
EMR – 20.00
ESGV – 4.78
FDS – 1.54
GILD – 10.20
IBM – 39.12
ICE – 2.10
JNJ – 50.50
JKHY – 2.15
KHC – 20.00
MCD – 27.09
MMM – 36.75
NEE – 4.20
O – 10.53
PLOW – 12.88
RDSB* – 9.52
SJM – 20.70
SJW – 9.60
SO – 41.60
TGT – 44.20
UNP – 19.40
VTI* – 13.40
WM – 27.80
WTRG – 14.79
XOM – 22.62
YUM – 7.99
ZTS – 1.20
December Dividend Totals: $678.45
Total Payouts: 36 (positions marked “*” are held in an IRA)
Month Increase YoY: 14.0%
Below each purchase is a max view chart taken on the last day of the month. The screenshots are from Google Finance and include some extra metrics on the buys.
9 shares – TMO @ $457.11 (new position)
19 shares – MSFT @ $212.99 (new position)
With forward price earnings of 22.78 and 33.00 respectively, these two purchases were not cheap, but they added some much needed quality, dividend growth, and diversification to the portfolio. Those parabolic to-the-moon charts do draw some concern, but hopefully this is a buy high sell higher type scenario. A timeframe of 10+ years for each purchase makes it a little easier.
Excited but cautious for whatever 2021 brings, and ready for another year of investing to become one step closer to reaching financial independence.
Thank you for reading and have a great month. 🐯
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