My Investment Portfolio Update (April 2012)

As I mentioned earlier this week, I started investing in individual stocks about three years ago. While I consider myself a passive investor, I’ve come to believe that smart passive investing can include individual stocks and industry-specific ETFs.

Of course, it’s one thing to invest in individual stocks and another thing to actually make money investing in individual stocks. So today I’m publishing my first investment portfolio update. In this update, I’ll show you exactly how my investments have performed, both good and bad. I’m not including my mutual funds, which are still the bulk of our portfolio. The idea here is to see how I’ve done picking individual stocks.

My hope is that these updates will accomplish several things. First, they add a level of transparency. It’s one thing to write about personal finance and investing everyday. It’s another thing to show the world exactly how you’ve done. Second, it helps me stay accountable. It may seem odd, but blogging about personal finance keeps me so busy that sometimes I ignore my own finances! That’s not smart, and these updates will force me to stay on top of my investments.

Finally, I’ll share what I’ve learned since the last update. Investing always involves learning. You not only learn each day about the mechanics of investing, but you also learn a lot about yourself. Will you panic in a down market or get manic in an up market? It’s hard to know until you’ve experienced it. But the lesson can be invaluable.

So with that, let’s get started.

SEP IRA

Three years ago I opened an SEP IRA at Scottrade. I picked Scottrade because its costs are low and they have an office near where I work. I don’t go to their office often, but it’s nice to know that I can when the need arises. I’ve been happy with the account, although the user interface could use some work.

Over the past three years I’ve purchases 4 securities: Apple, Cisco, Citi and ITB (a housing sector ETF). I add to my investments every April when I make my SEP IRA contribution for the previous year. So this past month saw a sizeable increase, which I used to buy more Citi and ITB.

Here, are the details of my investments in my SEP IRA:

StockWhat I PaidGain/LossCurrent Value
Apple (AAPL)$10,556.50$7,533.50$18,090.00
Citi (C)$31,305.20($987.70)$30,317.50
Cisco (CSCO)$9,971.50$1,816.69$11,788,20
ITB$28,403.93$4,550.42$32,954.35
TOTAL$83,239.33$12,912.91$93,150.05

Two of these investments, Apple and Cisco, I purchased one year ago in April 2011. I couldn’t be happier with their performance. In one year Apple is up more than 70% and Cisco is up more than 18%. Of course, that’s just one year. They could both be down next year. And as I’ve written before, the higher prices are a real drag when you reinvest dividends.

ITB, which I purchased in both April 2011 and 2012, is up about 16%. I purchased ITB because sooner or later the housing market will rebound. From an investment perspective, I really don’t care when. With Citi, I made a bet that the bank would recover and do well over the long run. It’s down about 3% for me on purchases made over the past three years. I continue to believe it will do well over the coming years. Perhaps not as well as some of its peers (e.g., Wells Fargo), but we’ll see.

Vanguard Taxable Account

I started investing in dividend paying stocks in my Vanguard account in 2011. I got fed up with the lousy yields on “high yield” savings accounts and government bond funds. While I still invest in bonds, of course, I decided to move some of our portfolio to well respected dividend paying stocks (with the exception of Berkshire, which doesn’t pay dividends). Here is the status of these investments:

StockWhat I PaidGain/LossCurrent Value
Verizon (VZ)$25,271.60$3,646.31$28,918.21
Pepsi (PEP)$25,159.64$952.70$26,112.34
Berkshire Hathaway (BRKB)$25,016.71$601.37$25,618.08
TOTAL$75,447.95$5,200.38$80,648.63

I plan to add to this account in 2012. I want another dividend paying stock in an industry not covered by my other stock holdings. I’m still working on what to buy. If you have any suggestions, leave a comment below!

Betterment

Betterment is a company that makes investing really easy. You simply pick how much of your money you want invested in stocks and how much in bonds, and Betterment does the rest. The money you have with Betterment gets allocated to a number of low cost ETFs. Betterment is a great way to get started because you can begin investing without a lot of money.

As more of an experiment, I opened an account several months ago with $250. Betterment added $25 to my account as a bonus . At the time, I was not happy with the fees Betterment was charging, so I didn’t add to my account.

Recently, however, Betterment significantly lowered its fees, added an IRA option, and provided more features (you can read about the changes here). So I began an automatic investment of $100 a month. It’s not a lot of money, but one thing I hope to show those just starting out is how even a little money, invested each month, can really add up over time.

For my Betterment investment, I’ve allocated 100% to stocks. The following image is a screenshot from my account showing my exact asset allocation:

Betterment All Stocks Allocation

So how have my Betterment investments performed? Frankly, not so great. I’m up just 0.3%. But with truly passive investing, this is to be expected from time to time. Furthermore, this issue isn’t Betterment. That’s just the performance of the underlying ETFs Betterment uses. Still, I’ll be keeping an eye on the performance over the coming months. Here’s a screenshot form my account showing my exact performance (as of April 29, 2012):

Betterment Returns as of 5--1--2012

You can check out Betterement for yourself here.

LendingClub

Investing in LendingClub notes has been a bit of a hobby for me. I’ve enjoyed trying to figure out how to make above average returns. And frankly, it’s a good feeling to invest in the lives of people building businesses, consolidating debt, or just trying to improve their lives.

If you’re new to LendingClub, check out my article on how to boost your LendingClub returns. I wrote that article when my returns were languishing around 7.5%. After implementing the strategies I describe in that article, my returns jumped to 9.07% in just six weeks, as I described in this update article.

So the question today is how have my LendingClub notes performed since my last update. The short answer is that they’ve done really well. They’ve gone from 9.07% in my last update to 11.52%. Here’s a screenshot from my account:

LendingClub Performance 5--1--2012

As you can see from the screenshot above, I have almost $1,000 in cash in my LendingClub account. I’ll be looking for notes on the secondary market to invest in over the next month. For more information on investing or borrowing, check out LendingClub’s website.

So that’s it for this update. In future updates, I’ll look more closely at how I pick stocks and how these investments fit into our overall portfolio.

Published or Updated: April 3, 2014
About Rob Berger

Rob founded the Dough Roller in 2007. A litigation attorney in the securities industry, he lives in Northern Virginia with his wife, their two teenagers, and the family mascot, a shih tzu named Sophie.

Comments

  1. Hi dough!

    I’m an avid reader of your blog and i am truly enjoying it :)!!
    I started subscribing to the newsletter so that i can have my mindset change little by little with the influence and great amount of info that your
    site provides.
    Having gotten a peek into your portfolio really was a huge insight for me!
    Currently I was only subscribed to betterment, but I am seeing how the pros think and do it themselves.

    Great stuff, keep up the great work!

    • Rob Berger says:

      Adan, thanks for the comment! I’m glad you found the update helpful.

  2. DR

    Good to see you’re doing so well with your investments. Take a look at HDY if you want some crazy action on a speculative Oil stock. As you know, I’m quite the gambler … ;)

    • Rob Berger says:

      Mr. Pruser, “crazy action on a speculative Oil stock.” Yep, that’s exactly what I’m looking for! Do you still own Netflix and BofA?

  3. R C says:

    Hi Dough,

    I am following your each article and learning a lot. By sharing your own portfolio to stranger like me, you have set much higher standard for so called financial advisor community. I was paying hefty annual fee to my advisor and never receive any such transparency. As a new investor anxiety, I wanted some assurance and all the time answer was “well… everyone has a different goals for their life”. I agree with that excuse but majority of us has same goals – house, education for kids and reasonable retirement life. Isn’t it??

    I truly appreciate you sharing your knowledge.

    Regards

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