Portfolio Update 10/6/17

It’s been a year since my last portfolio update. I took a break because I was working for a RIA and didn’t want to do anything FINRA would frown upon. I’ll get back in the habit now that I have resigned. I’ve had a great year in the markets, after returning 12.5% in 2016, I’m up 21.8% so far in 2017. A lot has changed in my personal strategy. Instead of carrying 40+ positions I have concentrated on my eight best ideas and given more attention to my asset allocation and global diversification. This is what my allocation looks like now:

22% Cash/Short Term Bonds

19% Bonds

43% US Stocks

16% Foreign Stocks

This is a great time to take gains at home and find opportunites abroad. Most foreign markets are cheaper and have better growth prospects. The US Cyclically Adjusted Price/Earnings (CAPE) Ratio is the third highest in the world, behind Denmark and Ireland. I’ll continue to rotate out of US into foreign stocks. Here is the allocation I’m working towards:

30% Bonds

32% US Stocks

38% Foreign Stocks

For bond exposure I’m only using the Vanguard Total Bond Market ETF (BND) and the Vanguard Total International Bond ETF (BNDX). I just want a small return on my cash I keep in case of a correction. For foreign stocks I’m only using the Vanguard World ex US ETF. For US stocks, I select my eight best ideas based on my personal research. These are my eight best ideas as a percentage of my portfolio at the moment:

7.76% TSLA Tesla
7.17% AMZN Amazon
7.17% UA Under Armour
5.48% GE General Electric
4.50% AAPL Apple
4.25% SMG Scotts Miracle-Gro
3.62% TAP Molson Coors
3.51% JPM JPMorgan Chase

Return since beginning of 2015: 38%

Performance vs. dividend adjusted Vanguard S&P 500 ETF: +8.9%

 

 

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