Portfolio Updates for 2021

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

Portfolios_1-4-22

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

Stock_Performance_July_2021

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

Performance_April_2021

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

Portfolio Eight Updated March, 2021

Portfolio eight is 5 1/2 years old. The beneficiary contributed $3000 and the trustee $6000 for a total of $9000. The current value is $16,423 for a gain of $7,423 or 83%, which is 17.5% / year adjusted for the timing of cash flows. Go here for details or to the link on the right.

During 2020 there was $97 in dividends and a long-term loss of $510 tied to the sale of GM. The portfolio is doing well overall.

Portfolio Seven Updated March, 2021

Portfolio 7 is 5 1/2 years old. The beneficiary contributed $3000 and the trustee $6000 for a total of $9000. The current value is $16,157 for a gain of $7,157 or 80%, which is 17% / year adjusted for the timing of cash flows. See the details here or at the link on the right.

The portfolio is doing well. During 2020 we had a long term loss of $558 for taxes (sell GM) and $121 in dividends.

Portfolio Six Updated March 2021

Portfolio six is 8 1/2 years old. The beneficiary contributed $4500 and the trustee $9000 for a total of $13,500. The current value is $22,835 for a gain of $9,335 or 69%, which is 10.4% / year when adjusted for the timing of cash flows. You can see the details here or at the link on the right.

The portfolio overall is doing well. The drug maker Gilead (GILD) has a good dividend but has had a stagnant price since we bought it many years ago and is on watch.

During 2020 for taxes there was $206 in dividends and a long term capital loss of $841 tied to sales of Shell (RDS.B) and Exxon Mobil (XOM).

Portfolio Three Updated Feb 2021

Portfolio Three is 13 1/2 years old. The trustee contributed $14,200 and the beneficiary $7000 for a total of $21,200. The current value is $32,436 for a gain of $11,236 or 53%, which is 5.5% / year adjusted for the timing of cash flows. Go here for a summary or to the link on the right.

There were no sales in 2020, and only some slight capital gains from the BND ETF. There was $348 in dividends. The portfolio is doing well, it has a heavier component of cash / bonds / gold as a percentage than the other portfolios (almost 50%) so it has gone up less than the other portfolios but would decline less in a downturn, as well.