[This is the first part of My 2015 Financial Year in Review. You can read more of my financial picture at that link as I publish more articles.]
My year of investing is best summed up by a line in this article:
“Twitter looks a lot like oil.”
If you’ve followed Twitter or oil prices you’d know that investing in them has made a dumpster fire look good.
Twitter – In May 2014 I bought Twitter stock. I sold some at a profit, but held onto some shares expecting Twitter to become a $50 billion company. It proceeded to drop and throughout the year I have dollar cost averaged, most recently in late December buying at around $22 a share. If it can turn it around just a bit, as it has in the past, I should make a nice little profit. In the meantime – dumpster fire.
Oil – In December of 2014, I ask whether it was Time to Start Buying Oil? I used awesome logic for ticker USO, like, “You have the opportunity to buy a stock for $21 that was $39 back in June.” Well as I write this in late December, USO is having a 50% off sale and you can buy it for less than $11. Yes, I’ve dollar cost averaged on this as well. I’d love to test, “Buy low and sell high”, but I’ll need a high cycle at some point.
Those are two very small examples that highlight my ability to catch fallen knives by the blade. I’m not worried though. I don’t see Twitter or oil going out business any time soon.
Those two stakes really are a very, very small minority of my investing overall. I have the vast majority of my money in diversified ETFs from Vanguard such as their Total Market Index (VTI). Most people will look at the S&P 500 and conclude that the stock market was fairly neutral for most people. VTI did just a tiny bit worst than the S&P… that was good.
I’m a big fan of diversifying my holdings. It’s one of the reasons why I was buying oil on the cheap. I really believe in diversifying by buying holding foreign indexes. My reasoning is that if the United States becomes a dumpster fire, my income is going to suffer, at least my investments abroad may lift me up.
I think it’s a great theory. In practice, the rest of the world was a dumpster fire. I’ve divided my foreign holdings into three areas: Vanguard ex-US ETF (VEU), Vanguard Emerging Markets (VWO), and iShares MSCI Frontier 100 ETF (FM). I put about 45% in VEU, 45% in VWO, and 10% into FM. The idea is hope to capitalize on some of the emerging market growth. The frontier market is mostly for a little fun, it’s probably 1% of my total portfolio. As it turned out, VEU was down 9%, with the emerging markets and frontier markets each down 18%.
Add it all up and that foreign part of my portfolio is down around 14% for the year.
That sounds like a lot of doom and gloom, but I at least had Google, Facebook, and Microsoft stock picks balancing it out a bit. That’s not nearly enough lipstick for me to make this pig look good.
What helps make the pig look good is realizing that I hold relative bargains that have the potential for upside in the future. I’m not quite 40, so I’ve got a lot of years to hold on. Please excuse my mixed metaphor, but maybe a prince will come kiss this pig into a princess.
P.S. I realized that I labeled this stock investing and then proceeded to write about oil, a commodity. Since my oil investment is in a stock ETF, it seemed like the best term to coverage what’s in my brokerage fund. I don’t have significant bonds at this stage as I’m aiming for more aggressive growth in these retirement accounts.