2017 Stock Market Performance

Looking Back At The 2017 Stock Market

The stock market had one of its best years in recent memory, as noted below is all of our numbers and indices. The thriving stock market is the result of increasing economic growth and enormous corporate profits. The biggest catalyst was likely the sweeping tax cuts President Donald Trump just signed into law, which over time will save corporate America billions on what they owe Uncle Sam. This sweeping tax cut was the topic of discussion all year, but didn’t get signed into action until December of 2017. Investor.com put together a great chart of all events throughout 2017.
2017: A Remarkable Year For Stocks

Noteworthy stock market news from 2017

  • At nearly nine years old, the bull market is now the second-oldest and second-strongest in history.
  • The Dow raced 25% higher in 2017, getting even closer to 25,000 and making this year its best since 2013.
  • It had taken the Dow 14 years to climb from 10,000 to 15,000, but just three and a half years to reach 20,000 in 2017.
  • The broader S&P 500 zoomed 19%. And the Nasdaq jumped an impressive 28%.
  • Indexes made superb gains in a year of unusually low volatility.
  • The Nasdaq’s worst drop was only 4.4%.
  • Just 18.7% of taxpayers own stocks directly. Roughly half of Americans participate in the market through an employee-sponsored retirement plan, according to a Pew analysis of Census Bureau data. That gap has contributed to record-high wealth inequality in America.

2017 Year-End Stock and Bond Index Performance

  • NASDAQ 28.2%
  • Dow Jones Industrial Average 25.1%
  • S&P 500 Index 19.4%
  • Foreign Stocks 27.4%
  • U.S. Bond Index 3.55%

How Did My 401k Do in 2017?

Last year in 2017 my retirement accounts (one 401k and two Roth IRA’s) were collectively up 17.5%. I am not thrilled about under-performing the major market indices, considering the S&P 500 was up 19.4% and foreign stocks were up over 27%. However, I am very pleased with my performance.

The Vanguard Target Retirement 2040 Fund (VFORX) was up 20.7% in 2017. This is my personal benchmark because I could invest all my retirement portfolio into one account or choose a number of index funds to diversify. I am doing the latter and in 2017 I lost to the 2040 Target Date Fund by 3.2%.

However, over the last 10 years, which is essentially my working career, my personal retirement performance return is 11.1%. I am thrilled with that return. If I can keep that double digit return up until retirement I will be extremely wealthy. But I have worked during the best bull market in history (2007 to 2017) so to keep those returns is unrealistic. But again, I am very happy with my 10-year return of 11.1%. As stated earlier my personal benchmark that I compare my retirement portfolio to is the Vanguard Target Retirement 2040 Fund (VFORX), which is only up 6.44% in the last 10 years.




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.




Best Smart Beta ETFs for 2018

What are Smart Beta ETFs?

For those who are new to Smart Beta ETFs, essentially Smart Beta ETFs are really anything that isn’t solely market-cap weighted. Instead, Smart Beta EFTs are weighted by Value, Growth, Dividend, Volatility, Size, etc. Smart Beta ETFs are also another way to package active management by putting it into a rules-based engine, while striping out the capital gains and high fees.

Best Smart Beta ETFs for 2018

We are in a historically low period for volatility, which hurts active management and Smart Beta. I think 2018 is the year for Smart Beta EFTs to come into their own and make a bigger splash. Below is my list of the 10 best Smart Beta ETFs for 2018. All of these ETFs have an expense ration under 0.50%.

  1. Vanguard Small-Cap Value ETF (VBR)
  2. BlackRock iShares Edge MSCI Min Vol USA ETF (USMV)
  3. BlackRock iShares Russell 2000 Value ETF (IWN)
  4. Vanguard High Dividend Yield ETF (VYM)
  5. Guggenheim S&P SmallCap 600 Pure Growth ETF (RZG)
  6. SPDR Portfolio S&P 500 Growth ETF (SPYG)
  7. Schwab Fundamental Emerging Markets Large Co. Index ETF (FNDE)
  8. SPDR NYSE Technology ETF (XNTK)
  9. BlackRock iShares S&P Small-Cap 600 Value ETF (IJS)
  10. SPDR S&P Emerging Markets Dividend ETF (EDIV)




Last Week Stock Market Recap (October 16-20, 2017)

Last week, October 16-20, 2017, all U.S. stock indices were up due to rising company earnings and easing political uncertainty as the Senate passed a 2018 budget resolution. Rising expectations of lower corporate taxes have helped stocks rise to record highs recently. Case and point, the Dow also hit 23K for the first time ever this week. This is definitely a huge milestone for this U.S. stock index. President Trump is really patting himself on the back for this achievement too. That, obviously, irritates a number of people on both Wall Street and in Washington. The business community of America is a huge reason for the growth and President Trump has helped with the idea of a corporate tax cut.

Black Monday: October 19, 1987

Exactly 30 years ago this week (Monday, October 19, 1987) the Dow fell exactly 508 points to 1,738.74 (22.61%). This is known as “Black Monday” in the financial world. The Black Monday decline was, and currently remains, the largest one-day percentage decline in the Dow Jones Industrial Average (DJIA).

Noteworthy market news from week of October 16-20, 2017

  • 52% of American’s say they’re less likely to shop on Black Friday this year.
  • Netflix added 5.3 million subscribers last quarter (July, August, September 2017).
  • Existing home sales were up 0.7% in September 2017.
  • But… U.S. home construction fell 4.7% in September 2017.
  • 30-year fixed-rate mortgage dips slightly to 3.88% this week (down from 3.91% last week).
  • But… 30-year fixed-rate mortgages were only 3.52% one year ago (all-time low was 3.31% back in November 2012).

Last Week’s Stock and Bond Index Performance (October 16-20, 2017)

  • NASDAQ 0.4% (YTD 23.1%)
  • Dow Jones Industrial Average 2.0% (YTD 18.0%)
  • S&P 500 Index 0.9% (YTD 15.0%)
  • U.S. Aggregate Bond Index -0.5% (YTD 3.1%)

How Did My 401k Do Last Week?

Last week my retirement accounts were up only 0.18%, whereas the S&P 500 was up 0.86% and the Dow was up 2.0%. So last week (October 16-20, 2017) I obviously lagged the two biggest U.S. stock market indices. And, overall this year, which is 294-days into 2017, my retirement portfolio is up 14.85%.

The Vanguard Target Retirement 2040 Fund (VFORX) is up 14.96% so far in 2017. This is my personal benchmark because I could invest all my retirement portfolio into one account or choose a number of index funds to diversify. I am doing the latter and this year I am losing to the 2040 Target Date Fund. Again, slightly. But, more on why I am not using the 2040 retirement fund later.

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”.

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.




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.




Last Week Stock Market Recap (October 9-13, 2017)

Last week, October 9-13, 2017, all U.S. stock indices reached new all-time highs. The NASDAQ is leading the charge in 2017, with a year-to-date return of nearly 23%. Interesting note; the NASDAQ has logged its 57th all-time high.

Stocks have been setting new highs and interest rates remain low, pushing investment returns well-above their long-term averages. Over the past five years, U.S. stocks returned almost 15% per year, which is roughly twice as much as projected long-term returns most financial experts are predicting (approximately 7% annually).

Last Week’s Stock and Bond Index Performance (October 9-13, 2017)

  • NASDAQ 0.2% (YTD 22.7%)
  • Dow Jones Industrial Average 0.4% (YTD 15.7%)
  • S&P 500 Index 0.2% (YTD 14.0%)
  • U.S. Aggregate Bond Index 0.5% (YTD 3.6%)

Last Week’s Retirement Portfolio Performance Report
(October 9-13, 2017)?

Below is a snapshot of my three biggest retirement portfolio mutual fund movers in terms of percentage gained (or lost!) last week.

How Did My 401k Do Last Week?

Last week my retirement accounts were up 0.52%, whereas the S&P 500 was only up 0.20%. Overall this year, which is 288-days into 2017, my retirement portfolio is up 14.6%. So I am actually slightly beating the market. Slightly.

The Vanguard Target Retirement 2040 Fund (VFORX) is up 14.9% so far in 2017. This is my personal benchmark because I could invest all my retirement portfolio into one account or choose a number of index funds to diversify. I am doing the latter and this year I am losing to the 2040 Target Date Fund. Again, slightly. But, more on why I am not using the 2040 retirement fund later.

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”.

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.




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.




Last Week Stock Market Recap (September 11-15, 2017)

Last week, September 11-15, U.S. stocks reached new highs. The S&P 500 was up 1.6% and reached 2,500, which puts the S&P 500’s year-to-date earnings at 11.7%.

Last Week’s Stock and Bond Index Performance (September 11-15, 2017)

  • NASDAQ 1.4% (YTD 19.8%)
  • Dow Jones Industrial Average 2.2% (YTD 12.7%)
  • S&P 500 Index 1.6% (YTD 11.7%)
  • U.S. Aggregate Bond Index -0.5% (YTD 3.4%)

Last Week’s Retirement Portfolio Performance Report
(September 11-15, 2017)?

Below is a snapshot of my three biggest retirement portfolio mutual fund movers in terms of percentage gained (or lost!) last week.

How Did My 401k Do Last Week?

Last week my retirement accounts matched the S&P 500 performance exactly; up 1.6% on the week ending Friday, September 15, 2017. This year, which is 260 days into 2017, my retirement portfolio is up 9.07%. So I am under-performing the “market”, e.g. the S&P 500 greatly (nearly 3%) as the S&P 500 is up 11.7% so far. On top of that, the Vanguard Target Retirement 2040 Fund is up 12.9% so far in 2017. This is my personal benchmark because I could invest all my retirement portfolio into one account or choose a number of index funds to diversify. I am doing the latter and this year I am losing to the 2040 Target Date Fund.

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”.

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.




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.




Stock Market Recap (August 28-September 1, 2017)

Stocks finished higher for the second week in a row. Aiding the 2-week rise is a rejuvenated focus on possible tax reform and better-than-expected manufacturing data, and the fact the U.S. economy added 156K jobs in the month of August, while the U.S. economy grew by 3.0%. Oddly enough, the devastation brought from Hurricane Harvey in the Houston, Texas area, and continued geopolitical tensions with North Korea and the hydrogen bomb they set-off, did not disrupt the stock market much.

Last Week’s Stock and Bond Index Performance (August 28-September 1, 2017)

  • NASDAQ 2.7% (YTD 19.5%)
  • Dow Jones Industrial Average 0.8% (YTD 11.3%)
  • S&P 500 Index 1.4% (YTD 10.6%)
  • U.S. Aggregate Bond Index 0.1% (YTD 3.5%)

Last Week’s Retirement Portfolio Performance Report
(August 28-September 1, 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).

  1. Vanguard Extended Market Index Fund (VEXAX) 2.3%
  2. DFA U.S. Small Cap Value Portfolio (DFSVX) 2.1%
  3. Vanguard Small Cap Value Index Fund (VSIAX) 1.9%

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”.

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.




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.




Stock Market Recap (August 21-25, 2017)

Last Week’s Stock and Bond Index Performance (August 21-25, 2017)

  • NASDAQ 0.8% (YTD 16.4%)
  • Dow Jones Industrial Average 0.6% (YTD 10.4%)
  • S&P 500 Index 0.7% (YTD 9.1%)
  • U.S. Aggregate Bond Index 0.2% (YTD 3.4%)

Last Week’s Retirement Portfolio Performance Report
(August 21-25, 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).

  1. Vanguard FTSE Emerging Markets ETF (VWO) 2.7%
  2. Vanguard REIT Index Fund (VGSLX) 1.9%
  3. DFA U.S. Small Cap Value Portfolio (DFSVX) 1.7%

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”.

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.




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.




What is Intrinsic Value?

I am currently reading a fascinating book on investing and the markets called A Random Walk Down Wall Street, written by Burton Malkiel. Malkiel is a famous economist who graduated from Harvard and is one of the original and early proponents of index-fund investing. Throughout Malkiel’s book he discusses “intrinsic value”, so I wanted to take this time to help define that term for my readers.

What Does Intrinsic Value Mean?

For starters, if you breakdown the term in its simplest terms, intrinsic value essentially means basic worth. This would be more of its perceived value, which is different from market value.

Example of Intrinsic Value

I am going to use a hypothetical example from a company every single Millennial knows, and probably loves; Apple. Let’s rewind the clock 10+ years and go back in time to when Apple first introduced the iPhone and help apply the meaning of intrinsic value.

Let’s assume Apple stock was selling for $100 per share in June of 2007. Then Apple introduces the first iPhone on June 29, 2007 to thoroughly shakeup the mobile phone space. Everyone loved their iPod, so why not morph it into a phone? Although these changes do not directly appear on Apple’s financial statements, they may improve Apple’s competitive advantage in the market. For these reasons, investors may calculate the intrinsic value of the stock at $130 per share, or $30 more than what it is currently selling for (its market value).

Hopefully that example and definition help you understand the meaning of intrinsic value.