My Terrible 2013 Investment Returns

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Here is a breakdown of my investment returns for 2013. Although the stock market returned about 32% for the year I managed to do much worse. I don’t think I’ve ever given any advice here on investing in stocks and bonds, but if I did I hope you didn’t take it. I calculated the returns using the portfolio personal rate of return calculator at My Money Blog. The calculator doesn’t give your exact return, but it is close enough.

I have three different investment accounts. My Roth IRA which was invested in a bond fund. My Traditional IRA which is invested in index funds and my dividend stock account which consists of individual dividend stocks. I’ll share how each of them did and why I think they had sucky returns for the year.

I will start with the worst. My Roth IRA which was invested in a bond fund managed to lose 9.09%. This was quite a feat considering the bond fund I invested in lost 8.77% for the year. Somehow I managed to lose just a little more. It could have been even worse. I bailed out of the bond fund and into a money market fund about halfway through the year and it ended even lower than when I bailed out. I’m guessing my return was worse then the bond fund’s return because the additional investments I made early in the year were when the fund had appreciated a bit from the beginning of the year. I knew the bond fund would take a big hit when interest rates began to rise and I had been thinking of switching out of it, but I waited too long to do anything. I’m not sure what I’m going to do with this money now. The money market fund actually has a slight negative return after expenses so I don’t want to leave the money there. I’ll probably put the money back into a different, shorter-term, bond fund, but I am still a little wary of doing that. What would you recommend.

The second worst was my dividend stock portfolio. It managed to return 5.9% for the year. That is pretty bad when the overall market returned 32%. My worst mistake here was not being diversified enough. Part of the reason I wasn’t diversified enough was not having enough money. Since it costs $4.95 to buy a stock, I like to wait until I have a $1000 to invest before purchasing a stock. The most stocks I’ve had in the account was 10 which is still not diversified enough. I had to sell some of them in 2012 because I needed the money so for 2013 I only had seven stocks. A couple of the remaining stock positions were well under $1000 because I had sold part of them when I needed money. The two REITs I had in the portfolio were full positions and their value went down quite a bit due to the entire REIT sector going down over fears of higher mortgage rates. I stopped investing in that account last year and started buying stocks through LOYAL3 . This allowed me to diversify a little more since they don’t have any transaction fees and I can invest as little as $10 in a stock. When you have a small investment amount like I do not having to pay $4.95 to buy and sell the stock makes a difference. The big drawback to Loyal3 for me is that they do batch orders for buying and selling so you can’t be sure what price you will get. I’m holding off on buying any more individual stocks for now because I want to max out my IRA and build up my cash savings a bit.

My traditional IRA account was my best performing account for the year although it still lagged the overall stock market by quite a bit. This account returned 20.64%. The account was invested in a couple of domestic dividend stock index funds, a preferred shares fund, and an international dividend stock fund. The preferred shares fund and international fund both had small losses which dragged down the overall return. This year I’m not going to invest in the preferred shares fund. Also, the two domestic dividend stock funds have a lot of duplicate holdings so I’m just going to invest in the lower cost one from now on. Investing in both is an unnecessary extra cost.

My overall portfolio return for the year was measly 3.51%. I could make that much with a savings account. I’m hoping that with a change of strategy I’ll do better this year.

My Top 8 Movies of 2013

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movies This is a bit off topic, but it is something I wanted to write so I’m writing it. My picks for the top 8 movies are necessarily limited to movies that I’ve seen. Since I’ve only seen two out of the nine Academy Award Best Picture nominees my list will be quite a bit different from their list. I did see 48 movies in the theater last year. Adding 2013 movies I saw on DVD and Netflix I saw a total of about 60 movies during the year. These are the ones I liked best in order of when I saw them.

1. Identity Thief
2. The Heat
3. The Way Way Back
4. We’re the Millers
5. The Spectacular Now
6. Gravity
7. Bad Grandpa
8. This is the End

This is a top 8 list because that is how many movies I felt deserved to be on my top list. As you can see, I’m partial to raunchy comedies, but a couple of serious movies are among my picks. What do you think of these movies? What would be on your top movies of 2013 list?

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Possible Plans for 2014

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CAM00206 It has been a while since I’ve put up a post on this blog. I’ve decided to just post when I feel like writing a post and lately I haven’t felt like posting much. I even thought about quitting blogging completely, but I like having a record of my thoughts and finances. This blog has always been more of a journal than a magazine/advice type blog and now that will likely be even more so. I’m not setting any blogging goals for the year right now. I’m just going to blog when I want to blog.

I’m actually not making any yearly goals right now. I did fine on the two yearly goals I made last year, but this year I want to make some non-financial goals. I’m thinking those goals will be monthly goals so if I get off track one month I can get back on track the next month. The areas I need to make goals for are losing weight/getting in shape and (non-blog) writing. This month my goals are to take the steps at work and to spend less on fast food than I did in December. I’m doing fine on those goals so far this month and I’m thinking I probably made my goals too easy. I can set harder goals next month. Of course, I can also improve on my goals this month as well.

There are also a couple of things I would like to do this year that are not goals. They are just wishes at this point. I’d like to spend at least a month hiking. Based on my previous experiences, that isn’t likely to happen. At least not a month of consecutive days hiking. Nonetheless, I am going to try again. I plan to get in better shape before I start my hike so the hiking isn’t such a shock to my system. Also, I’ll be starting in April rather than July so the weather shouldn’t be nearly as hot.

The other thing I’d like to do is take a road trip across the United States. This is something I’ve wanted to do ever since I read “Blue Highways” when I was in high school. That was over 25 years ago and I never got around to doing it. Since I should finally have both the time and the money, this year seems like the time to do it. I’m not sure how long the trip or where all I’ll visit. I’d like to at least visit all of the lower 48 states that I haven’t yet visited. The states I haven’t visited are mainly the Northwest and Northeast states. I just haven’t had much inclination to visit those states since I’d rather go south where it is warm. The northern states should be warm enough in summer though and I might even make a short trip across the border into Canada as well. I’ve probably been to Mexico about 50 times so I should probably visit Canada at least once.

I will give more details when these events come closer to happening. I’ll also let you know about any new goals I set.

I Saved 47% of My Under 30k Income in 2013

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One of my goals for 2013 was to save 50% of my income.  I managed to save $14058.60 and earned $29711.86 for   a savings rate of 47.31%.  Although, I failed to meet my goal I’m happy with the savings rate and I’m not going to consider this goal a failure.  I was unemployed for most of 3 months during the year and only employed part-time for two more months of the year.  If I had obtained full-time employment for another month of the year I’m sure I would have met the 50% savings goal.  My income of just under $30k is also the best income year I’ve had.  I know it isn’t that great of an income for most people, but it seemed like a lot to me.  If I’d had this kind of income in earlier years I like to think I’d have saved more then as well.

I’ll be working two jobs to start this year so I have a chance to have an even better income this year.  Making more money is not a priority for me this year though.  I’m planning to take quite a bit of time off.  It is still possible that this will be an even better money making year since I might change my mind depending on what opportunities are available.  I won’t be setting a savings goal this year, but I do plan to save a large percentage of my income.

My other financial goal for 2013 was to keep my monthly expenses under $1274 a month.  I met that goal by ending up with an average monthly expense of $1164.81.  That goal may have been a little too easy.  I did also have a stretch goal of keeping my expenses under $1000 a month which I obviously didn’t make.   My goal for 2014 will be to keep my monthly expense average under $1000.   I am going to need some dental work this year which might make this goal unrealistic.  If that ends up being the case I’ll set a new monthly expense goal.

If you are curious as to how my expenses broke down I’ll share a few more numbers with you.  My largest expense was rent which added up to $4390 for the year.  There isn’t much I can currently do to reduce that expense.  My next largest expense was transportation.  I spent $1590.53 on gas and $1805 on car maintenance, auto insurance, and other car expenses.  I spent way too much on gas in 2013.  I plan to reduce that this year.  I currently have a longish commute which means I’ll be off to a bad start on gas spending though.  Once the commute job is over I’ll have to cut back on other driving.  I spent $1373.42 on health insurance and fitness center dues.  My health insurance is slightly cheaper this year and I no longer have the fitness center membership so this category should come down quite a bit this year.

I spent $457.96 on groceries and $985.32 on dining out last year.  That total will probably remain about the same this year, but I’d like to switch groceries to being the main expense rather than dining out.  I spent $674.22 on movies, $797.45 on travel, and $674.22 on other entertainment.  I didn’t always break out travel so there is a little bit of travel expense included in the other entertainment category.  I saved quite a bit of money on travel by using my Barclay Arrival rewards card.  I just signed up for the Capital One Venture card for a $500 bonus towards travel this year.  I’ll probably cut back some on the movie expense this year.  After going to the movies almost every week last year, my girlfriend and I are starting to get a little burned out on watching movies.

I spent $321.72 on my phone for the year.  I spent $137.82 for seven months of electricity.  I spent $112 for five months of internet, including an installation fee.  I spent $348.94 on miscellaneous and $65.91 on gifts.  I’m thinking some gifts were probably included in the miscellaneous category.  I also spent $74.48 on medical costs other than health insurance.  That is how I spent most of my money.  Other than the transportation category, I think I did pretty well.  I’ll try to do even better in 2014.

December Income – $2476.19

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Here is a breakdown of my income for December.

Online Income

 $537.15
Interest

$3.51

Dividends

$45.84

Cash Back

$44.64

Mystery Shop

 $146.50

Job

 $1698.55

Total

$2476.19

December was a pretty good month for income since I was working a full-time document review job.  I probably could have made about $1000 more, but I missed a lot of time due to being sick and the holidays.   The online income received a little bit of a year end boost.  This income is nice since I do very little to earn it.

I’ve decided to no longer count cash back from my credit cards as income.  I’ll only count cash back earned by referrals from sites like  Mr. Rebates.

January should be an even better month for income.   I’ll be starting my seasonal tax job and it looks like my document review job will overlap the tax job by a week or so.   I’ll be really busy if that happens, but the income will be nice.  I can handle both for a short period of time.   It will be a nice start for my income for the year.