Portfolio Three is 10 years old. The beneficiary contributed $5000 and the trustee $10,000 for a total of $15,000. Current value is $19,143 for a gain of $4143 or 27%, which is 4% / year across the life of the fund. See the details here or in the links on the right.
We have added some new, central analytics to this portfolio. There are 3 stocks that we are looking at right now for being 80% – 89% of their 52 week high…
- ConocoPhilips (COP) – COP is an oil and gas company with a strong dividend. It is at risk due to continuing low oil and gas prices. We will consider selling it now
- Siemens (SIEGY) – Siemens is a successful European conglomerate with a strong dividend. The stock is not far off 5 year highs, but down about 10-15% off recent peaks. We will likely hold onto this stock
- Exxon (XOM) – Exxon is a lightning-rod political stock. They are a well run company near their 5 year lows, hit by low prices for oil and gas. We will consider selling it, but less likely than COP (above)
Portfolio Two is our second longest lived portfolio. This portfolio has been converted to ETF’s and a CD. Beneficiary investment is $6500, trustee investment is $13,000 for a total of $19,500. Current value is $34,290 for a gain of $14,790 or 76%, which is 7.8% over the life of the fund annualized. Go here or to the link on the right for the portfolio detail.
This portfolio is different from the others in that there is a 1.55% CD for $10,000 and the rest are ETF’s. The largest ETF is VTI (US total index) with VEU (all world ex US) and HEFA (non US, hedged). We also have a small position in IBB for biotech. All seem to be doing well.
It is a symptom of ZIRP that our CD returns less than the US or European stock funds, which are around 2.5% / year.
Portfolio One was re-updated as of August 2017 to reflect three sales. You can see the details here or click on the link on the right.
The portfolio recently sold three stocks (BOX, TTM and KO) and has $6349 in cash. There is another analytics worksheet which is also linked to the underlying central spreadsheet (calculated).
Many elements of our stock system are completely antiquated when compared with other facets of our modern society. One of the most “old-school” elements is the T+3 rule for being able to withdraw cash from your account after you sell stocks.
The “T” is the transaction date. You can withdraw cash from your account THREE BUSINESS DAYS after the date of the transaction. That’s a long time… the type of process that made sense when these sorts of events were settled manually and / or with confirmations sent by the US mail.
Here is the definition per Investopedia:
The Securities and Exchange Commission (SEC) sets securities’ settlement periods. For example, with the three-day settlement period, a stock trade occurring on Friday is settled on Wednesday, as long as no holidays occur during that time. Otherwise it takes an additional day, due to the markets being closed on weekends and holidays. The three-day settlement period for stocks was established when cash, checks and physical stock certificates were exchanged through the postal system. Adequate time was needed for traders to efficiently buy or sell the stocks and send money to their accounts or stock certificates to the purchasers.
Although money is now instantly transferred electronically, the settlement period remains in place as a convenience for traders and brokers. However, most online brokers require traders to have enough funds in their accounts before buying stock. Also, most physical stock certificates no longer exist; securities are typically traded electronically and are backed up by account statements.
The broker we use allows you to buy other stocks after the sale… you can immediately re-invest the funds while they wait for the T+3 days until the stocks “officially” clear. But if you want to actually withdraw the cash, you need to wait all 3 business days.
This practice makes no sense for many reasons, but it is is for the benefit of the industry so I don’t see it changing anytime soon.
Portfolio One is our longest lived Portfolio. We opened it right after 9/11… meaning that it is almost 16 years old. This portfolio has moved from the trustee to the beneficiary’s account, but we also still set it up so that the trustee has agency (can see the portfolio, buy and sell).
The beneficiary contributed $7500 and the trustee $15,500 for a total of $23,000. The current value of the portfolio is $44,883 for a gain of $21,883 or 95%, or 7% / year adjusted for the timing of cash flows. Go here or to the link on the right for details.
The portfolio is doing well. We added some criteria and filtering for stocks “at risk” (BOX, Budweiser Inbev and Exxon) or “on watch” (Tata Motors / TTM). BOX has doubled recently and is down a bit; BUD just finished a major merger but Exxon is near 5 year lows and a bit controversial due to politics. Tata (TTM) is one we will look at closely.
I have been using Google Sheets to update these portfolios and it has been an excellent experience. I can share the spreadsheets with the beneficiaries and they can see a real-time view of their portfolios on any device (phone, PC, tablet) through Google Sheets. The only minor updating item is the cash in the money market account which is a product of recent dividends.
It used to take me a long time to update each spreadsheet. I had to do the following items:
- look at the performance of stocks that were sold. Now I use the “Google Finance” formula to get the current price of stocks that have been sold and I have it in a text statement embedded with the purchase and sales price for that stock
- I don’t update the current prices for any stocks; that happens automatically
I try to centralize functions. One item you can’t find via Google Finance is “dividend yield”. I have a central sheet where I update yields once and then can copy that throughout all of the cells. I need to copy a block of text into the spreadsheet so that a VLookup can be applied against the data, with the ticker being the primary key. This also works for the current description of the stock’s status (commentary).
Portfolio Five is almost 5 years old. The beneficiary contributed $4000 and the trustee $8000, for a total of $12,000. The current value is $14,522, for a gain of $2522 or 21%, which is about 4.3% / year when adjusted for the timing of cash flows. Go here for details or see the link on the right of the page.
We are looking at several stocks. ConocoPhillips (COP) has been hit hard by the decline in oil prices, but has kept a modest dividend. Spirit Airlines (SAVE) has been a great stock but has come down recently. Tata Motors (TTM) provides some diversity in terms of currency and emerging markets but is down about 20% from highs. Juniper Networks (JNPR) has been doing well but long term they face risks from Amazon (AMZN) and the cloud.