June 2019 Financial Update

Now that we are home from our summer road trip I was able to take some time and put together our long past due financial update for June 2019.

You have to love watching the stock market. In my May update, you can it read here, I discussed the old adage of “sell in May and go away” which appeared to have been holding true and even compounded by all of the uncertainty regarding trade wars and tariffs in addition to historical trends. If there is one thing the market hates is uncertainty and it can lead to strong down moves very quickly.

During the month, there were reports about on again off again discussions to resolve the ongoing trade issues with China. This caused the dreaded whipsaw reaction in the markets on several occasions which is always an interesting ride if you like watching your portfolio closely as I do. Ultimately the U.S. and China decided on a truce of sorts and the market headed higher on that news.

One of the things I always watch for in the markets is when good news becomes bad news and vice versa. This can be maddening because you get a piece of news and the market takes it the complete opposite direction. As the focus on trade has been put to the side for now, the market decided to focus its attention on the fed and interest rates. This lead to a couple of odd trading days over the last month. When the June jobs report was worse than expected, the market went up. Then in early July, another jobs report was released and the numbers were good, but the market went down. Why is this happening? Because the market clearly wants to see a fed rate cut and any bad news means that is more likely to happen. So good news is bad and bad news is good? Yup!! This is because the market doesn’t live in the now. The markets live in the future and only care about where we are going and not where we are. Oddly enough this can also become a self-fulfilling prophecy.

So where do we go from here? The fed left rates unchanged in June but has already signaled that there will be a rate cut coming soon. The markets are once again moving up on this news. While I love watching the markets move up and my portfolio increase, I tend to think we will reach the point rather quickly where the rate cut is baked into the market and attention will turn somewhere else.

Perhaps the focus will turn back to trade and tariffs once discussions continue. Or as we head closer to an election year, more focus will be on the candidates. Normally I would say if the economy continues to do well heading into an election year than re-election is all but guaranteed. However, this is not going to be a regular election year and people are energized and polarized on both sides so nothing is certain. But a strong economy is something an incumbent President can usually ride to victory.

As is usual for us long term focused investors, we just stick to the plan and don’t concern ourselves with these factors. We can’t control them or the knee jerk reactions that come with them. What we can do is be observant and opportunistic so we can take advantage of any drastic blood in the street type scenarios as they arise. At this time I don’t see anything like that on the horizon so I will be keeping a close eye on how the markets react to news for the time being.

Here is where we finished the month of June:

Portfolio- $960,351 (Cash and Investments)

Portfolio Goal – $1,500,000

Amount needed to reach goal – $539,649

Our portfolio increased by $36,771 or 3.98% from the end of May.

Year-to-date we are up 15.05%.

Net Worth – $1,153,678

This is an increase of 3.27% from the end of May.

Year-to-date we are up 13.87%

It was a nice recovery from the lows in May and July is off to a strong start as well. We are inching ever so close to having a seven figure portfolio which would be a major milestone for us. I would like to increase our savings rate to help push us over the top, but we have a large amount of expenses to deal with. Our savings rate will be tempered for the next couple of months as we clear out these costs.

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