This past week, May 1-5, U.S. stocks were up slightly on the week, but daily moves over the last eight trading days have been muted as the S&P 500 has not moved by more than 0.4% any day over that span. The big movers, as you’ll see in my retirement portfolio below, were international funds. But the big news of the week was on Thursday, May 4th when the U.S. House of Representatives narrowly passed a new health care bill that seeks to replace the Affordable Care Act (ACA), or Obamacare. Certain features of the bill include repealing the individual mandate requiring health insurance and replacing subsidies with tax credits.
- The economy added 211,000 jobs in April, higher than the expected 190,000, according to Bloomberg.
- The unemployment rate decreased to 4.4% from 4.5% and sits at its lowest level since May 2007.
- Average hourly earnings grew 2.5% over the past year, a sign that the economy can continue to grow as consumers’ financial situations improve.
- Despite soggy first-quarter growth, the economy appears to be accelerating modestly, based on solid job growth, rising wages and improving optimism.
- While the Fed is expected to raise rates at least one more time in 2017, the path will be dependent on incoming economic data.
Last Week’s Stock and Bond Index Performance (May 1-5, 2017)
- NASDAQ 0.9% (YTD 13.3%)
- Dow Jones Industrial Average 0.3% (YTD 6.3%)
- S&P 500 Index 0.6% (YTD 7.2%)
- U.S. Aggregate Bond Index -0.3% (YTD 1.4%)
How did my retirement portfolio perform last week (May 1-5, 2017)?
Below is a snapshot of my three biggest retirement portfolio mutual fund movers in terms of percentage gained last week.
The below mutual funds are held within my work 401(k) plan as well as two separate Roth IRA plans. I currently invest 15% of my income into my company Roth 401(k), and that doesn’t include the company match I get. All accounts are held with Vanguard (so as you can see I primarily invest in Vanguard funds because of this).
- Vanguard International Growth Index Fund (VWILX) 2.4%
- Vanguard Total International Stock Index Fund (VTIAX) 1.7%
- Vanguard Windsor Fund (VWNAX) 0.7%
Can I Beat the Stock Market?
I am actually not trying to “beat the market” with my retirement portfolio…I am trying to match it. I do have alternative indexes in my retirement portfolio to help possibly beat the market, e.g. Small Cap Value, REITs, International, and Emerging Markets. Through lots of reading and research on my part, I’ve found that a number of these assets classes “zig” when the market “zags”. I am purposely over-weighted in Small Cap Value, which at times helped me beat the market and at the same time lag the market.
With that said, if I can beat the market I will absolutely take it (obviously)! Last year in 2016 my retirement portfolio returned 13.01% versus 9.54% from the S&P 500. The primary reason I was able to beat the market last year was due to the strong performance of my Small Cap Value holdings, which I am weighted heavily in.
Thus far in 2017, which is 127 days, my retirement portfolio is up 5.9% versus 7.2% from the S&P 500. So while I beat the market in 2016, I am now lagging it (early on) in 2017. But I am investing for the long term so this doesn’t concern me, as long as I am within reason of the market (roughly 1%). And actually, within the last 30 days I am beating the market. My portfolio is up 2.03% in the last 30 days versus the S&P 500 being up only 1.86%. The 30 day and the first part of 2017 views are quite short sighted in terms of long term investing, but I like to monitor this as a baseline for my retirement performance and how I compare to the market.
I am a liberal arts major and I am my own financial advisor. My goal with this personal finance blog is to show all Millennial’s that you have the power to take control of your personal finances through self-education on money and finance, and by striving to become financially literate. That is what I have been doing for years now, focusing on becoming very financially literate, so I can one day become financially independent. I’m trying to prove to Millennial’s that we can all do this and thrive with money. Follow my blog as I highlight relevant personal finance topics pertaining to us Millennial’s.