This past week, July 17-21, the U.S. stock market reached record highs on Friday, July 21, 2017. The week actually started off with loses, but still managed to finish at record highs. The top performing index was U.S. large-cap stocks.
Last Week’s Stock and Bond Index Performance (July 17-21, 2017)
- NASDAQ 1.2% (YTD 18.7%)
- Dow Jones Industrial Average -0.3% (YTD 9.2%)
- S&P 500 Index 0.5% (YTD 10.4%)
- U.S. Aggregate Bond Index 0.5% (YTD 3.0%)
Last Week’s Retirement Portfolio Performance Report (July 17-21, 2017)?
Below is a snapshot of my three biggest retirement portfolio mutual fund movers in terms of percentage gained (or lost!) 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 Index Fund (VGSLX) 0.7%
- Vanguard International Growth Fund (VWILX) 0.7%
- Vanguard Total Stock Market ETF (VTI) 0.6%
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. In addition to the S&P 500, I like to measure my portfolio performance against Target Date Retirement Funds. I specifically like to use the Vanguard Target Retirement 2040 Fund (VFORX) because that is what I used to invest in before I went to all index funds. But if I can’t beat the Vanguard 2040 fund, then why not simply invest in it (one fund) versus the 10+ mutual funds I am in now? Well in 2016 the Vanguard 2040 fund was up only 8.73%. So it under performed the market (S&P 500) by nearly 1%, and I personally beat it by nearly 5%. So that tells me I am on the right track with my well diversified portfolio.
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 204 days, my retirement portfolio is up 9.18% versus 10.44% from the S&P 500 and 10.00% from the Vanguard 2040 Target Date Fund. So while I beat the market in 2016, I am now lagging it in 2017. But I am investing for the long term so this doesn’t concern me at all. I use a free account with Personal Capital to track my investments like this.
I am a Millennial, a liberal arts major, and I am my own financial advisor. I am strongly considering using the services of robo-advisor Betterment, however. The more I read and research Betterment, the more I like their product, services, and overall costs. But at this point, I am managing my own portfolio.
Millennial Personal Finance Blog
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 financial 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.
Follow my blog as I highlight relevant personal finance and retirement topics pertaining to us Millennial’s. You can also join my journey as I track the true cost to raise a child these days. Most of my research shows that on average it costs $14,000 per year to raise a child, which equates to roughly $250,000 to raise a child from birth through high school (the cost of college is not included in this $250,000). I am trying to defy that price tag and show that a Millennial family can raise a child on well less than $250,000…or I will come to the sad realization that this number is dead on. Time will tell.