My $77,000 experiment portfolio -- Oct 2020 update

At the beginning of 2020, I started a new M1Finance portfolio where I picked several dividend stocks to invest in. The goal is to achieve similar returns to the SP 500 index but beat it in terms of dividends. As of the writing of this article, I’ve contributed $66,000 of my own money into this portfolio. By the end of this year, I will have contributed $77,000 ($25,000 initially and $1k contribution per week). In this article, I’ll share my M1Finance portfolio, how I’m doing against the market, my thoughts on the current stock market, and how I am doing against my FIRE schedule.

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FIRE update

As of 10/25/2020, I am +$599,040.57 ahead of schedule! That means if all of my other assumptions (i.e. pay stays the same, 8% annual return in the stock market) hold true for the next 2.25 years, I’ll have $599,040.57 more than the expected $4MM.

M1Finance Performance Summary

  • My portfolio is up +20.49% YTD and I have unrealized gains of +$8,575.89. I’ve earned $895.86 in dividends. And when compared to VTI (total stock market, +18.13%), my portfolio is outperforming it by +2.36%. Definitely not too shabby for a bunch of companies that many would consider boring, right?!

Transactions

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Thoughts on the stock market

  • I still think we are far from being out of the woods. This market is top heavy and a huge population of individuals and small businesses are struggling. At what point will that get reflected in the stock market, if at all? 

  • The stock market seems to be waiting for a decision on another stimulus bill. It is moving 2% up or down depending if there are favorable or unfavorable signs coming from Washington DC. Despite all of that, this market is on a rocket ship, fueled by tech. My guess is that the market is expecting a stimulus package, it’s just a matter of time...it is election year after all. 

  • As I’ve been following the Dallas real estate market over the last 9 months, I’ve noticed that residential real estate prices have reversed course. In April-May, home prices were down as much as 10-15% from their highs. I am now seeing alerts for home price increases in the Dallas-metro region. Perhaps the COVID19 scare is over and the real estate market is back to normal in that part of the country.