Changes from Last Week
Happy Good Friday. Short week for traders, bankers, etc. This week I decided to change my investment strategies in two ways: diversify and implement dollar-cost-averaging. Additionally, I wanted to clean up my portfolio have dividing it into three main slices, which are pies of their own: Stocks, Bonds, and REITs.
Unfortunately my original portfolio was just a mess. If I had a holding in the top level, I couldn’t just transfer it to a sub-slice (think of moving a file into a folder) to organize my portfolio. I consider this a con for M1. So I set up another portfolio to clean this up. But then M1 doesn’t let you move funds between portfolios. Lame, another con. I decided to liquidate my original portfolio to my bank and just start over.
I know this looks like a classic novice move from the surface (over-activity), but I did this because it would just really bother me to look at a mess. And honestly, I’m still a novice, but at least I recognize the classic mistakes that beginners make.
New Holdings to Diversify
With this diversification I decided to separate my portfolio into three different main slices: REITs and other dividend yielding funds(25), Bonds(12), and Stocks(26) for a total of 63 holdings. How many apps let you have 63 holdings for $128? Not many. If you are interested in what I picked, you can see the tickers below.
Using a squared A5 size Moleskine if you’re curious and you can check one out here.
Dollar Cost Averaging
I’m going to invest $10 a day every business day to ensure I don’t pick up shares at the highest price. Theoretically, if you could divide time up to a limit (infinity) and invest in those intervals, you would get closer to the average price of a share. But we can’t do that (yet…) so $10/day is fine. Also be aware that M1 only invest from your brokerage if it is at least $10.
If you are asking why not just buy the shares when the market is at its lowest? Well, we can’t time the market. Even experts who have masters degrees in finance can and have been wrong.
Conclusion / Analysis
For the week and overall, I am up $1.06 (0.90%). Wish I could invested more to begin with to realize a larger gain. I am surprised that my REITs have overall had some decent appreciation, some as much as +4.5% (although it’s just one week). I was more interested in seeing the steady earnings from dividends. As far as losers, TSLA took the charge (by no surprise) after Moody’s downgraded its rating, the share went down by 9.17% since I purchased it. This means it is significantly cheaper though.
- REITs: +2.00%
- Bonds: +0.63%
- Stocks: -0.14%
If you want to give M1 Finance a shot, here is the signup link. Full disclosure, that is my personal referral link. If you’re going to try it out, why not get an extra $10 and then give me an extra $10.