ETF Monkey Personal Portfolio Update - Q3 2021
Reporting on a truly unique quarter
This past July, I offered readers a peek into my personal portfolio for the first time in almost 2 years. As the tagline above teases, I am now back to report on a truly unique quarter for me.
The Bottom Line
Through Q3, the Dow is up by 15.13%, the S&P 500 by 15.92% and the Nasdaq 12.66%. Over that same period, my portfolio is up by 5.52%. While, at first glance, that may not seem like stellar performance, I might note that during the month of September, my portfolio experienced a decline of only 2.06% compared to 4.54% for the Dow, 4.65% for the S&P 500, and 5.27% for the Nasdaq.
At the same time, in addition to declines in my stock holdings, increasing interest rates took a minor toll on my bond and gold allocations as well.
Selling My Home
Shortly after that Q2 update, I revealed that I was in the midst of selling my home, first in an article on TheStreet.com and then a follow-up discussing idiosyncratic risk on my personal website.
Well, after a roughly 2-1/2 month journey, I was able to close the sale of my home on August 25. I was a very happy man that day, first visiting the title company to pick up a check for the proceeds, and then heading across the street to Fidelity Investments to deposit said check.
Photo by Carlos Muza on Unsplash
That, however, led to an interesting dilemma. My wife and I plan to buy a smaller home as a replacement at some point. However, at this point, we are not quite sure when, and even where, we will purchase that home. In the meanwhile, I need to invest the money in a manner that reflects a balance of conservatism and caution, yet with some level of aggressiveness to deal with the risk of inflation.
I won’t spend too much time talking about the matter in this particular article, as it will likely form the basis for future articles that I hope to put together, including my investment outlook for 2022. However, you will see immediate reflections of this in some weighting shifts in my personal portfolio for the time being.
I will continue my tradition of first sharing the big picture, followed by the details.
The Big Picture
As I have featured previously, I first summarize the detail into 8 asset classes, and then at an even higher level into 4 asset classes. This helps me see the big picture, as well as the really big picture. As an example, I can see my weightings of domestic stocks, foreign stocks, and REITS, and how they line up against my target weights. But then I can also see the weighting for stocks as a whole. In the screen shot below, then, you will see that I am a hair over my domestic and foreign targets, but below on REITS. At the same time, in the really big picture, stocks as a whole are almost dead-on my target weight.
This quarter, I decided to add a little something new to the graphic. On the far right, I included my weighting as of the last quarter (6/30 in this case) and then a computed column to display the difference. I then color-coded in green and red to visually feature what went up and what went down.
As it happens, the net proceeds from my home sale roughly doubled the amount of funds in my investment account.
As alluded to in the previous section, it is easy to see that I invested these particular funds in quite a conservative manner to start. As compared to 6/30, my weighting in bonds jumped from 37.72% to 55.29%, while my weighting in stocks decreased from 52.83% to 40.05%. While I added to the holdings in my 3 gold-backed ETFs, I did not bump it up enough to keep my allocation at 5%. I am in the middle of rethinking my desired weighting in gold at the present time. I will feature any conclusions I come to in a future article.
The Details
Here are my detailed holdings as of 9/30/21. Have a look and then I will offer just a few comments.
First of all, a couple of simplifications, resulting in the sale of the 3 holdings displayed at the bottom of the list. As explained in this article, I made an interesting discovery which led to me eliminating my dedicated position in VPU, as well as the whole question of tracking Utilities as a separate asset class in my summary.
Shortly thereafter, I made a similar decision with respect to IEFA and VWO. Again, with an eye to simplification, I simply incorporated the amounts in these 2 ETFs into my existing holdings in IXUS and VEU.
IEFA and VWO are useful tools if you want to more directly control your respective weighting in developed and emerging markets. However, in the final analysis, I found my discreet allocations in IEFA and VWO, when combined, were not much different than those found in IXUS and VEU. So, again, I simply consolidated my holdings in those two ETFs.
Finally, I added one new ETF to my stable this quarter. This was Hoya Capital High Dividend Yield ETF (RIET). I recently had the opportunity to review this brand-new ETF, and subsequently made the decision to “dip my toe in the water” and include a small allocation in my personal portfolio. I will be watching to see how it performs, and if I like what I see may well add more.
Well, that’s all for now. Feel free to leave any comments, or ask any questions you wish, in the comments section below.
I feel honored that you have allowed me to write for you. Thank you for reading, and I look forward to having more conversations in the near future.