$55,805.24 | The Index is Unforgiving

Hey guys!

It’s been a while since I posted an update to my Roth IRA portfolio – so I want to make sure I’m showing you progress as we wind down the year.

The last month has been the worst month relative to the S&P 500 since I started tracking my portfolio. I went from just about tracking the index during the last update to falling significantly behind. There are a few main reasons why this is the case, but first I want to share the highlights. Here’s my portfolio balance this month, and my tracker vs. the market.

  • S&P 500 from January 4th – December 12th: +27.67% ((432.85-339.03) / 339.03) x 100
  • My portfolio from January 4th – December 12th: +22.59% (((55,805.24 – 6,000 – 1,210.31) – 39,641.18) / 39,641.18) x 100

Ouch. What happened?

Over the last few weeks, growth stocks – specifically growth stocks whose profits are expected to be many years in the future took a huge hit. While my portfolio isn’t fully encompassed by stocks like this, my entire “Moonshot Growth” slice of my portfolio is made up of companies like this. Take a look at the relative performance of each of my portfolio slices in the last month.

Look at the difference between the “Moonshot Growth” slice over the last month and the “Growth 1st, Dividend 2nd” slice. There’s a 15% variation in return. The “Growth 1st, Dividend 2nd” slice of my Roth IRA is the most similar to the S&P 500 with the biggest positions in companies like Apple, Microsoft, etc.

Speaking of Apple stock, let’s take a peek to see how it’s done in the last month:

As you can see above, Apple stock has risen over 20% in the last month. Since Apple is the largest weight in the S&P 500 index at over 6% of the index, Apple has been driving the market up over the last month. Apple is only about 1% of my entire portfolio, so I’m lagging way behind.

Never doubt a wonderful company like Apple – underweighting it a bit has set me behind. It’s not the only factor that’s set me behind, but it’s definitely a big one. I doubt I’ll end up ahead of the index now by the end of the year. I’ll gain some overall return when I calculate total return including dividends, but I’ll have to gain about 3% against the market in three weeks – not likely.

Regardless, I knew this was a possibility and I don’t regret constructing my own annual portfolio. I’ve learned a few things that I want to apply to next year’s iteration. I’m working on a 2021 Roth IRA Investing year in review to highlight my portfolio’s complete performance and I’ll speak in more detail about opportunities to update my strategy there.

How are you guys doing? Did you overweight Apple in your portfolio recently, I hope so! Happy money and happy investing!


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