Peek Into My Portfolio

Updated: Apr 25

A peek into my portfolio is a summary of my financial situation for the 2021 Q1. I recount lessons learned & setbacks had, but most importantly discuss how I plan to persist. If there is something you want to know feel free to ask.

The first quarter of 2021 is already over. I've learned some things along the way, new & old. With the change of the quarter, I thought it would be insightful to document the highlights of this financial experiment I call my life. Car Expenses: Gas, upkeep, registration, note, and insurance. The car is a huge expense in my budget, gas and insurance in particular fills me up with rage. $109.10 in January. $153.43 in February. Only upside is my budget for gas is $200 a month. My first car I bought cash, so I only had to worry about upkeep, when my car broke down I either fixed it or got on public transportation. I had my car sitting a whole year and I wasn't pressed because there was no note to pay every month. I couldn't imagine letting my current car sit idol now, paying close to $500 monthly. So I'll keep my eyes & ears open for tips & hacks to pay off the car faster.

I calculated my debt-to-income ratio in January and it was around 29%. According to Investopedia, Lenders prefer to see a debt-to-income ratio less than 36%, with no more than 28% of that servicing a mortgage. No mortgage yet, so I'm good there. I refocused, and revised my debt payoff strategy. The debt is smaller this year (sitting around $10,130), and I’m more focused and more determined now that I’m closer to my deadline. Right now debt isn’t the real problem, the actual problem is it reporting to lenders negatively. So the plan is simple, structured payment to best receive high scores from the rating agencies.

I've experimented a lot with my credit in the last 2-3 years, mainly being balance transfers, and a few things are coming due this year. The debt that I'm focusing on is credit card debt (which is about equal to my car loan). The objective is to pay the least in interest, so far the options are payoff quickly or refinance with balance transfer deals. I plan to be direct and intentional with dismantling this debt. To be honest, I'll probably do a combination of payoffs and transfer, if the banks and credit unions let me. Until recently, I have been denied every attempt to add any more credit lines. Reasons being debt to income ratio, which doesn’t make much sense to me. I have been able to already structure a payoff to increase my overall score, but I'd prefer to just pay less and if I'm able to open accounts with promotions I can further structure my overall debt payoff with freedom from interest and add to my credit profile. So when the opportunity for me to open a new card with a 0% APR promotion, I’m hopping on it.

I'm in the 22% tax bracket. That doesn't really mean anything except the more money I make the more they take. Doesn't matter that it doesn't go far in California. 15% capital gains tax. Capital gains tax is a tax on the growth in value of investments incurred when individuals and corporations sell those investments. Right now President Biden is planning to mess with it, so I'll wait for that before I start to think about it. Not too long ago (meaning 2018) I was making $12/$13 an hour, still struggling. Change companies, making more money ($19), got benefits, and raised my taxes. California's minimum wage is currently supposed to be $13/$14 depending on 26 employees, we're already moving towards $15 by 2023. I'm interested to see, if I'm still working an hourly wage, what the wage would be. I gave myself 3 years at my current job to restructure my debt so I can focus on other things. After the 3 years, maybe taking a lower position or moving to part time, but I'll admit I didn't seize the opportunity like I planned. Somewhat due to COVID, some due to personal choices. The years fly by, and yet I can barely keep to my 3 year plan, here in year 2 and I already want to step down.

Banking & Credit

New Banking Limitations. Since COVID, banking has been getting more sus. In my area, I saw an increase in money trucks before the coin storage was declared. Since then digital currencies have been embraced by large companies and governments. Doing regular business at my local banks and credit unions has also gotten more inconvenient, to say the least. 2 forms of ID when withdrawing $3000+ from teller. Access to only $200 of cashed checks. Max Money transfer ($6000) within a 30-day month for one of my accounts. Plus everything takes so long to clear. In all, I have 4 banks/ credit unions and have 10 credit cards from various institutions. I’ll make a separate post about that. According to the Federal Reserves, cash is a physical form of money. It is widely available to the general public for a variety of uses, and it can be transferred from person to person anonymously. In addition, cash has built-in security features to make physical money easy to authenticate but difficult to counterfeit. For these reasons, cash, as we use it today, is analogous to the historical notion of a monetary token.

Portfolio/ Investments

Q3 2020 I told myself to remove these stocks from my portfolio by 12/15/20: (Tickers:) AAL, EADSY, GM, MJ, ARR, USB, & CHL. I wanted to restructure my portfolio and cut some losses. What I ended up doing was reevaluating that list. On this day, AAL, ARR, USB, EADSY, & GM are still in. I sold my positions in MJ and CHL. For the remaining, all show potential for upside and gain. I really like USB. I mention that to say, nothing is in stone when it comes to investing, the game can change. Common advice is don't fall in love with a stock, and that's something I'm struggling with because I'm trying to invest more in what I believe in, as well as potential for growth, and hopefully pays a dividend; and if it checks all the boxes it's hard not to fall in love... and stay in love until it doesn't. Which brings me to Stop Orders. I've mentioned them before and I've only grown to love and appreciate them more as time goes on. A stop order is an order that becomes executable once a set price has been reached and is then filled at the current market price. For Robinhood, I set the fixed stop price and if the stock falls to that price a sale is triggered. It's how I learn to set expectations, boundaries, and limits to my investing.

Top 10 holding/ reasons & predictions

Tickers: MRK, AXP, DIS, USB, SBUX, SPGM, AGM, XLU, CMF, AFL, totaling $4,658.54.

Merck is my big pharma play, it was also headed by a Black man, Kenneth Carleton Frazier. Although it failed at creating a Covid-19 vaccine (later to produce J&J’s dose) their real specialty is cancer and HIV drugs. American Express & US Bank are my finance play. American Express has a “high class” stereotype associated with it, which is a plus now that it is opening it’s network and adding a broader customer base. US Bank as mentioned before, has great growth potential, I actually took profit from JPM and bought a couple shares in USB. Disney and Starbucks are my consumer play. To be honest, I was determined not to get into Starbucks, but then I saw the company on a movie promotion poster in the credits. Starbuck is so much more than an overpriced milk shop; it’s also a fintech genius, storing customer data and money in their app network. SPGM, XLU, AGM, & CME are my fund & institutional plays. Fund & institution plays are good for dividends and market monitoring. Aflac ends the list, being my insurance play. Not very deep, I think Aflac is a safe dividend paying company.

Top performing

Tickers: DIS, AXP, AMAT

Disney raised me and is a media juggernaut, Marvel and Star Wars are cash cows and the content available to the company is massive and provides limitless potential for additional revenue. American Express is my favorite financial company at the moment (reasons previously explained). In addition, the company has increased marketing and expanded access for vendors to use the network.

Worst performing

Tickers: AAL, ARR, OGE KBWB, T

At the moment I have no desire to sell these positions for a loss, I will consider selling for break-even or slight profit. Airlines will rebound, and AT&T is basically a utility and dividend aristocrat. The others will be used for their dividend until I can sell.

Market indicators/ Markers

AGM I use for US farms and agriculture. XLU is a utility ETF. CMF, if you follow me on IG, you would know I watch Cali Muni Bond Fund to keep an eye on my home state. VIX is for volatility, I used to use TIX but that's no longer available. Lastly, SPGM indexes the global market, I thought it would be a great thing to add, especially, to watch the effects the Covid Pandemic had on the economy and signs of recovery.

Opinion on the market. I'm consolidating and trimming my portfolio. I feel the market is too volatile and expensive for some of the things I want. So I'm going to prioritize paying down debt, and fulfilling buy orders I placed last year & early this year. So the market may have slightly corrected, but not all the buy orders I wanted were filled, but a few sell orders were filled and profit was taken. For current market conditions, I think it'll pay off more to focus on a specific investment strategy and portfolio mix.

My best investment this quarter has been in myself. I've gotten specific and more concrete with my goals and timelines. I have a project I'm cultivating now, born from me wanting to tackle this quickly and most effectively, so I'm excited to see what comes of it. I feel like the time and opportunities to relearn myself the better I'll be in the long run. I need to invest more in my mental health. I wonder if fighting the residuals left by the depression is the same as still fighting the depression? Everyday I try to think of new ways to trick or force myself into doing different things to tackle the same issues. My default tells me to strip down and get back to simple. Life is an interesting thing, each phase requires a new you to be born, then you gotta learn how to nurture that you, properly and fully.

In conclusion, everything I've learned in Q1 of 2021 will be added to the foundation of my investment perspective and overall journey for independence while navigating this world. I'll make another post going more in-depth with my credit cards and revolving debt and how that story begun and progressed over the previous years. Plans for Q2 include increasing shares to my top holdings and aggressively dismantling the debt I currently have, or restructuring it using balance transfers and new credit lines. Dallas Federal Reserve President Robert Kaplan told CNBC he likely will favor an interest rate increase before the end of 2022. However, just three other officials on the 18-member FOMC agreed with Kaplan’s position, and the plot overall still indicated no hikes through at least 2023. Meaning, I have around 2 years to setup my finances to be benefit from the rate increase or at the very least be indifferent towards it. One of a more practical goals is to strengthen my emergency fund, I want to establish a safety net so I can comfortably step down from my position and take a lower level job to focus on self, family, and passions.

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