This past week, May 15-19, U.S. stocks were only slightly lower to end the week when compared to last week. U.S. large-cap stocks fell by nearly 2%, posting their largest declines since September 2016. The U.S. market declined on Wednesday as investors became progressively more concerned that turnover and turmoil within the Trump administration will prevent implementation of some (or all) of its pro-growth policies. However, stocks stabilized on Thursday and rallied on Friday.
Vanguard recently posted they are anticipating significant changes to fiscal and monetary policy in the U.S that could begin later this year. After two recent interest rate hikes, Joe Davis, Vanguard’s chief global economist, says the Federal Reserve will likely announce plans for normalizing the balance sheet and any additional hikes later this summer. These changes have the potential to shape the U.S. economic and financial market environment for years to come.
Last Week’s Stock and Bond Index Performance (May 15-19, 2017)
- NASDAQ -0.6% (YTD 13.0%)
- Dow Jones Industrial Average -0.4% (YTD 5.3%)
- S&P 500 Index -0.4% (YTD 6.4%)
- U.S. Aggregate Bond Index 0.6% (YTD 2.2%)
How did my retirement portfolio perform last week (May 15-19, 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 REIT (Real Estate Invest Trust) Index Fund (VGSLX) 1.2%
- Vanguard International Growth Index Fund (VWILX) 0.9%
- Vanguard Total International Stock Index Fund (VTIAX) 0.8%
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 140 days, my retirement portfolio is up 5.31% versus 6.38% 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%).
I am a Millennial, a liberal arts major, and I am my own financial advisor. My goal with this Millennial personal finance blog is to show all Millennial’s that you have the power to take control of your personal finances through self-education and self-development on money and finances, and by striving to become financially literate. That is what I have been doing for years now, focusing on becoming an expert in financially literacy, 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. We Millennial’s have the greatest resource on our side to become financially independent and build wealth…time! Save, invest, and let compound interest do the rest.
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