Portfolio Update September 2022

It has been a confusing ride in the markets across all asset classes. We are now going to 1) go through the portfolios and recommend some sales 2) invest for our 2022 incremental funding and match. We also need to move one of the UTMA accounts from the trustee to the beneficiary because they turned 21.

We began the first portfolio right after 9/11/01, when the markets were at a nadir. There have been other difficult periods, especially the 2007-8 period and the long era of basically static markets.

These portfolios are for the medium to long term, and offer the beneficiaries an opportunity to understand markets, the importance of a long-term outlook, and the need to take control of their own finances.

A Look At the Market – July 2022

This post looks at the state of the market in July, 2022. There have been a lot of significant changes in the last 12 or so months:

  • Rising interest rates – after the largest bull market in history in bonds (when interest rates fell to negative territory, an unheard of historical level), we now have rising interest rates. These rising rates are meant to quell inflation, but they have many other impacts, including a huge impact to the housing market (30 year loans cost much more) and stocks that are selling on future profits (such as SAAS stocks currently losing money but promising to make it in the future)
  • Strong US dollar – a stronger US dollar makes foreign stocks worth less, all else equal, because their value is translated into US dollars for us. The US dollar is now at parity with the Euro, something that hasn’t happened in decades
  • China damages its own market, Russia zeroes out its market – China has taken many steps to reign in their tech stocks and bow them down to the state, which has taken hundreds of billions of value from their markets. Russia effectively ceased to exist as a market; companies that used to be worth billions are now worth almost nothing
  • Fossil fuels and oil / natural gas stage a huge rebound – until recently fossil fuels and oil / natural gas were seen as relics of the past and a focus of dis-investment. With the war in Ukraine, oil prices have skyrocketed and this is having a huge impact on European and US economies. Since the US is a major producer of oil and gas, we have some offsetting gains, but in Europe it is mainly a significant burden
  • SPAC’s fall significantly and the IPO market freezes – SPAC’s offer a less regulated approach to the public markets; almost all the SPAC stocks are trading for less than their issuance prices, often far less. The IPO market is effectively frozen, which generally occurs when markets fall

Let’s look at how this has impacted the S&P 500 first. Using this chart (note – I am reviewing this as of 7/24/22 – if you look at it on other dates, you will see different results since it is updated with the market daily). Note that this doesn’t include the impact of dividends, which is significant on longer multi year time frames.

Top 100 stocks – only the top 100 stocks (out of 500) have gains for the YTD as of late July. Big winners are the oil companies such as Exxon Mobil (XOM) up 42% YTD, and some companies catering to low income consumer staples like Dollar Tree (DLTR) up 22% YTD or Kraft Heinz (KHC) up 7%. Activision Blizzard (ATVI) is up 19%, since it is being purchased by Microsoft (MSFT). Utilities and cigarettes also fall into the small positive percentage category

Stocks 101 – 200 – these stocks are all down YTD, between zero and -10%. You see a lot of less risky stocks here, like Allstate (ALL) – 1% YTD and Berkshire Hathaway (BRK.B) – 4% YTD, and Walmart (WMT) – 9% YTD. One surprise is Twitter (TWTR) down only 8%, due to Elon Musk’s bid which moved the stock up significantly.

Stocks 201 – 300 – these stocks are all down between -10% to -20% YTD. Here you see CME Group (CME) down 10%, Medtronic (MDT) down -12%, Apple (AAPL) down 13%, many of the banks like Goldman Sachs (GS) and Northern Trust (NTRS) and others. This is where the best performing tech stocks ended up (like Apple) and most of the financials.

Stocks 301 – 400 – these stocks are all down 20% – 28%. This is where the “better” performing tech stocks ended up, like Amazon (AMZN) down -27%, Alphabet (GOOG) down 25%, some of the worst performing banks like Bank of America (BAC) down 25%, TESLA (TSLA) down 22%, and a lot of the health care like Baxter (BAX) down 23%.

Stocks 401 – 500 – these stocks are down 27% to 63%. They include some former high flyers like Netflix (NTFX) down 63%, Paypal (PYPL) down 57%, Facebook (META) down 50%, Nvidia (NVDA) down 41%, Moderna (MRNA) down 35%, Nike (down 35%), ServiceNow (NOW) down 31%, Accenture (ACN) down 30%, Dominos (DPZ) down 29%, and some of the worst performing banks like JP Morgan (JPM) down 27%.

Top Foreign Stocks – let’s look at some of the widely held foreign stocks for YTD 2022 performance as of late July. Note that not only are these stocks driven down by many of the same factors (above) that impacted US stocks, they are further impacted by the rising dollar which also makes their value lower when translated back into US dollars (for our purposes). Broadly speaking, the non-US stocks traded similar to US stocks, with the better performing tech stocks down 33% for instance for TSM and SAP, 5o% for Alibaba (BABA) and 75% for Shopify (SHOP). Their oil companies held up well and industrials generally down but not as badly impacted.

  • Taiwan Semiconductor Manufacturing (TSM) down 33%
  • Shell (RYDAF) up 10%
  • Astra Zeneca (AZN) up 17%
  • Toyota Motor (TM) down 14%
  • Novartis (NVS) down 6%
  • Alibaba (BABA) down 50%
  • L’Oreal (LRLCY) down 22%
  • BHP Billiton (BHP) down 27%
  • Royal Bank of Canada (RY) down 5%
  • Shopify (SHOP) down 75%
  • HSBC Holdings (HSBC) up 10%
  • Unilever (UL) down 14%
  • LVMH (LVMUY) down 22%
  • SAP (SAP) down 33%
  • Allianz (ALIZY) down 26%
  • Siemens (SIEGY) down 39%
  • JD.com (JD) down 10%
  • Canadian National Railway (CNI) down 6%
  • Airbus (EADSF) down 19%
  • UBS Group (UBS) down 11%
  • Vodaphone (VOD) flat

Portfolio Performance May 2022

Markets have fallen aggressively during 2022. Our total investment is back to where it was in 2020, after adjusting for contributions.

The stocks that have done well so far in 2022 are energy (oil, gas) and utilities have done OK. Unfortunately, we have few of these stocks in our portfolio (unless you have an index like the S&P 500) because they are viewed as bad for the climate and on ESG measures. Technology stocks have been hit very hard, and a lot of the other stocks that did well earlier in the market like consumer stocks have also fallen quite a bit.

In addition, over the last year the dollar has risen 12% compared to a basket of world wide currencies. This makes our investment in overseas stocks (Europe, Japan, China) worth less as a result (even if their investment performance was flat, they’d be down an average of 12% in our US dollars). This also hurts a lot of multi-national companies who have significant overseas sales, because those revenues are “less” when converted back into US dollars.

As a result, we are at a point where we need to re-look at the construction of our portfolio and decide which stocks we want to continue to hold onto and what to sell. And of what we sell, where do we re-invest that cash, or do we hold it in our portfolio to reduce risk?

Portfolio Performance as of March 2022

Portfolio As of March 2022

Our portfolios have gone down with the market since the highs in November 2021.  We had an aggregate decline of 16% and the market has gone down about 8-10% during that time, depending on which benchmarks you use (US / Europe).  We had some stocks that were hit particularly hard, so let’s go through them.

The Chinese stock market has been hit hard.  We have two stocks in the portfolio, Alibaba (BABA) and Pinduoduo (PDD).  China has cracked down on big tech and foreign listings in particular, although recently these stocks have done better since the government has now reversed and promised to support these companies (likely because they started laying off thousands of workers in China).  Rather than trying to understand the Chinese market, it is time to sell unless you are in it for the long haul (Alibaba in particular is a large and successful company).

There were a number of technology companies whose prices went down a lot.  These include Meta (FB), Snap (SNAP), Cloudflare (NET), and Okta (OKTA).  Meta and Snap were tied to a broader issue on social networking and the fact that Apple changing its tracking made ads less accurate.  Cloudflare is trading for a very high multiple of revenue (not profits) so any bumps along the way in forecasted growth can cause a significant drop in the stock price.  Okta was also hit and tied to an acquisition but the core numbers remain strong.  The story behind these stocks generally remains strong but they will likely continue to face a lot of turbulence.

PayPal (PYPL) was maddening.  This is a well run company whose price went down an unprecedented amount without a significant challenge to their business model (unlike SNAP and FB who were impacted by the Apple tracking change).  They did announce reduced future guidance but I was surprised by the fall. 

We have other stocks that have gone down for various reasons, including Appian (APPN), Rocket Mortgage (RKT), Block (SQ).  Block seems like a long term holding but APPN and RKT may be for those willing to ride out volatility.

We use the Vanguard Total Bond Index ETF (BND) rather than the money market fund which essentially returns almost zero.  But with interest rates rising, we actually lost money on BND – about 3% (after netting out the interest we received) – so perhaps it is better to go back to the money market (VMMXX) instead and get maybe a .5% – 1% return with no risk of loss.

 It wasn’t all bad news.  Many of the portfolio stocks did well, especially the non technology stocks such as manufacturing and commodities.  We had a buyout offer for Activision (ATVI) from Microsoft, so we might as well sell at that price.

Many of the core stocks bounced around and were down but not as significantly, including Mastercard (MA), Nvidia (NVDA), Tesla (TSLA), and Taiwan Semiconductor Manufacturing (TSM).  We likely got in too early for Intel (INTC) but that seems to be a solid long term play at this price.

We are going to update the individual portfolios and as we do we will consider which stocks (if any) to sell per the above logic.

Portfolio Updates for 2021

During 2021 the markets had a lot of ups and downs, but overall it was a great year for stocks.


Our portfolios in aggregate returned about 18% (adjusted for contributions in the fall of 2021 and amounts that were essentially un-invested in cash) during 2021. This compares roughly equivalent to the US markets that returned about 25% in aggregate and foreign markets that returned about 8% (by comparing against Vanguards VEU ETF which is large-cap stocks not including the USA), since our portfolios are a mix of them.

These portfolios are tracked in Google Sheets in two ways:

  1. a single consolidated portfolio tracker in google sheets, which has the shares by stock for each portfolio and the cash associated with each portfolio, to get the total value. I take “snapshots” of value at different types of the year, as you can see in the graph above. This google sheets doc is pretty easy to keep up to date and lets me see the markets at a glance; I notice when it seems odd and often it is a stock split which needs to be reflected in the underlying data. Buys and sells only take a few minutes for me to update in the sheet. I then reconcile the portfolios against the records online from our financial records
  2. 8 unique google sheets documents, one for each portfolio. These sheets have all the details for each portfolio, including the price of each stock purchase and the sale price for those that have been sold, as well as matching dividends to each stock over time (to get total return). I also have the cash flows over the years to calculate total return (gains / losses) as well as an annual return adjusted for the timing of cash flows

I typically update the individual google sheet documents periodically when we do buys and sells, usually around the fall of each year when we have contributions, but we often sell individual stocks due to unique circumstances throughout the year. All 8 of the google sheets are aligned to the consolidated sheet and the brokerage records as of now.

Portfolio Four Updated November 2021

Portfolio four is 12 years old.  The beneficiary contributed $6500 and the trustee $13,000 for a total of $19,500.  The current value is $51,656 for a gain of $32,156 or 165%, which is 13.2% / year adjusted for the timing of cash flows.  Check the values here or at the link on the right.

The portfolio is doing well overall in this bull market.  The biggest winners are Tesla, NVIDIA and recently purchased Cloudflare (NET).  The other stocks are doing well.

Portfolio Two Updated October 2021

Portfolio Two is seventeen years old.  The beneficiary contributed $27,000 and the trustee $18,200 for a total of $45,200.  The current value is $79,546 for a gain of $34,346 or 76%, which is 7.6% / year adjusted for the timing of cash flows.  For details go here or to the link on the right.

The portfolio is generally doing well.  There is a core of ETF’s and some individual stocks.  Cloudflare (NET) has been doing well and the others mostly purchased recently.  Alibaba (BABA) is up from recent very low prices caused by Chinese politics and a deferral of the Ant IPO, but we are holding on for now.

This portfolio has over $20,000 in cash and the total bond fund (BND) ETF which reduces risk but also reduces total return opportunities.  1/4 of the fund is invested in cash or low risk equivalents rather than equities. 

Portfolio One Updated October 2021

Portfolio One is our longest lived portfolio.  It is 20 years old.  The trustee contributed $20,000 and the beneficiary $10,000 for a total of $30,000.  The current value is $98,262 for a gain of $68,262 which is 227% or 9.7% / year when adjusted for the timing of cash flows.  Go here for a summary or to the link on the right.

There was a stock split since the last update – Nvidia (NVDA) split 4/1. When that occurs you need to adjust the purchase price accordingly. We purchased 5 new stocks for the account so it is almost entirely invested (less than 2% is in cash). The portfolio is generally doing well, with large positions in Taiwan Semiconductor (TSM) and Paypal (PYPL) along with 23 other stocks. There are a couple stocks on watch, notably Alibaba (BABA) tied to the Chinese crackdown and Rocket Mortgage (RKT) which was briefly part of the Meme stock frenzy.

While many recent stock purchases don’t pay much in the way of dividends, over the 20 years of this portfolio, almost $10,000 of the total return is in dividends. This is a big reason why I create these offline tracking sheets, so that you can see the impact of dividends on the portfolio.

Stock Performance September 2021

Stock Performance September 2021
Stock Performance September 2021

Over about the last 6 months, net of $30,000 in contributions from the trustee and the beneficiaries (some beneficiaries are making additional contributions beyond the normal $1500 / year), the funds in total have gone up by approximately 5% annualized. Net of cash and cash-like instruments (which reduce money in equities), we have returned about 6-7% annualized.

The indexes in the US on the other hand have gone up by between 10-15% annualized, depending on what you are looking at (S&P, NASDAQ, MGK performance, etc…). One of the reasons for our different performance is that we have a decent basket of foreign stocks, including some Chinese stocks which have gone down about 40% during the last 6 months (some of which have already been sold).

Since we are looking at the long term, we’ve historically selected a mix of US and foreign stocks. Foreign economies make up a majority of the worlds’ GDP, but US stocks have turned out to be the best bet recently for a variety of reasons. Chinese stocks, for instance, were hit by changes in government policies. We will continue to monitor the mix and the options for investments.

Portfolio Six Updated July 2021

Portfolio six is almost 9 years old.  The beneficiary contributed $4500 and the trustee $9000 for a total of $13,500.  The current value is $24,154 for a gain of $10,654 or 78%, which is 11.5% / year adjusted for the timing of cash flows.  Go here for details or to the link on the right.

The stocks are generally doing well and no action is needed at this time.

Portfolio Four Updated July 2021

Portfolio four is almost 12 years old.  The beneficiary contributed $6000 and the trustee $12,000 for a total of $18,000.  The current value is $38,597 for a gain of $20,597 or 114%, which is 11.3% / year adjusted for the timing of cash flows.  Go here for the details or to the link on the right.

Like the other portfolios that moved to the agency model recently, the brokerage switched to paying dividends in fractional shares which caused a book keeping headache and I’ve switched back (it doesn’t impact value).  The portfolio has done well and currently doesn’t have much cash on hand.

Portfolio One Updated July 2021

Portfolio One is our longest lived portfolio, at almost 20 years.  We started this portfolio the day after 9/11/01 (a significant day in hindsight).

The value is $91,424 and the beneficiary invested $5000 and the trustee $19,000 for a total of $24,000.  Gains are $67,424 or 280%, which averages out to 10.4% / year adjusted for the timing of cash flows.  Go here for a summary or to the link on the right.

In March we sold half our position in Rocket Mortgage (RKT) when it was part of the “meme” stock frenzy.  The stock has returned to what we paid for it originally plus paid a dividend.  We also had a reverse split for IAU gold shares (rare, it actually makes the price higher) and received a small amount of cash for our fractional half share (not a dividend, a return of capital, but very small).

The stocks in the portfolio are generally doing well, along with the market overall.

June Performance Summary


Our portfolios continue to perform well, like the overall market.  We are up about 30% over the last year, net of contributions.   US markets are up around 40% during that period, but our portfolios are about 20% cash / gold along with non-US stocks so it is roughly equivalent.

There are a few stocks that haven’t performed as well as the market as of late; Alibaba (BABA) the Chinese internet giant, SUMO Logic (SUMO) the cloud analytics company, and Baozun (BZUN) the Chinese e-commerce fulfillment company.  However, the performance wasn’t terrible for these 3 companies, just not nearly as good as the overall market.

We are looking at companies to consider buying for the summer investment round.  I am performing research now on candidates.

This year we moved three of the accounts over to “limited agency” status from trust funds; this has become necessary as the beneficiaries get older.  This is a one-time effort that took some time given that the steps are not simple nor clearly laid out.  Even today I noted that many of the individual stocks were set to reinvest dividends, which I turned off because it causes challenges in tracking and is minor in the grand scheme if you reinvest cash regularly (as we do with new investments).

April Performance Review


Since our last updated in mid-February (approximately the market “top”), the value of our positions has declined by about 5% overall, with some portfolios hardly moving and others declining over 10%. The differences were driven by:

  • What percent of the portfolio is in cash or bonds – 25+% portfolio two, 30+% portfolio three, 20%+ portfolio four, with the heavier the cash and bond weighting the lower the decline
  • Amount of high growth stocks in portfolio – certain stocks that have been great performers that are considered “growth” and generally trade as a multiple of sales (say 20-30x sales) such as Tesla (TSLA) and Cloudflare (NET) and Sumo (SUMO) fell as the market moved from growth to value in the first quarter

Given that these portfolios represent a log-term investment for each of the participants and would be a portion of their total net worth (i.e. they often hold other cash in savings or other accounts), we try to be reasonably heavily invested in the market, but each participant has their own risk tolerance.

During this rotation into value stocks, some sectors which had been battered such as energy (Exxon-Mobil and Chevron) and Financials and some general retail have come back strong. There are many of these stocks in the portfolios (such as Coca-Cola, Procter and Gamble, and many others) but they generally represent a lower portion of the total “value” because the tech stocks have risen so much that their position size is much bigger.

We also see variances by region, with Chinese stocks rising and US stocks generally rising (at least in some sectors) but European stocks stagnant. Since these portfolios seek to choose both US and overseas stocks, we also will see changes in value based on changes in currencies and country-specific dynamics. We do not intend to “predict” which ones will rise and fall, but we encourage a balanced mix of stocks by sector and region / currency where possible.

Some specific stocks have fallen and are “on watch”, including:

  • Alibaba (BABA) – a well run Chinese company with huge cloud presence (like AWS) and a giant financial arm (called ANT), this group has run afoul of regulators and Chinese politics.  It is down about 25% from its high
  • Cloudflare (NET) – Cloudflare runs an advanced online system and trades for more than 30x revenues… making it susceptible to falling when it doesn’t perform exceedingly well in revenue growth or when interest rates increase.  It is down about 20% off its high
  • Tesla (TSLA) – the grand-daddy of all stock high flyers is down about 20% from recent peaks
  • Sumo Logic (SUMO) – SUMO has lost about half its value from peak recently.  While SUMO is still growing quickly, it recently acquired a company and is not exceeding expectations
  • Baozun (BZUN) – Baozun, the Chinese e-commerce support company, is down about 30% off recent highs.  The company was part of a short squeeze and impacted by US / China relations overall, but core operations are solid
  • Gilead (GILD) – this large pharma stock has lost about 20% of its value, despite having high earnings and dividends.  It does not play significantly in the covid space and is a bet for focus on other drugs and treatments in the post-covid era.

By portfolio:

  • Portfolio one -BABA, NET
  • Portfolio two – BABA, NET
  • Portfolio four – TSLA, NET
  • Portfolio five – SUMO, NET, BABA, BZUN
  • Portfolio six – BZUN, GILD, SUMO
  • Portfolio seven – BABA, BZUN, SUMO
  • Portfolio eight – BZUN, SUMO