Ryan's First Portfolio Update
Monthly report of Ryan Henderson's performance
*If pictures/tables aren’t showing up, try the web-based version
I figure I’ll be completely transparent with this thing. I’m a 20-year-old finance student, with $6,828.09 in a Schwab account and no outstanding debts. I don’t have any sort of steady income, so I’ve scraped together what I can. I started investing just over a year ago and as you will see, the learning curve has been quite steep.
I’ve read every boring statistic about the odds against beating the market. However, I’ve also read the Warren Buffett quote, “Diversification is protection against ignorance. It makes little sense if you know what you’re doing.” I’m not sure if I know what I’m doing, and for that reason, I’ve split my portfolio into two categories; Stocks and ETF’s. 57% of my portfolio is invested in various Schwab Exchange Traded Funds, and the other 43% is held in common stock.
My investing strategy is simple. Once a month I move over a small amount of cash from my bank account to my portfolio. If there aren’t any individual stocks that I want to buy at the time, I’ll add to the ETF portion of my portfolio. I tend to keep a very small amount of cash on hand, as I don’t see any real need to hold cash with more than a 50-year time horizon.
ETF’s:
As I just mentioned, ETF’s make up 57% of my whole portfolio. This percentage has decreased over time, as I’ve developed a better understanding of the types of individual companies I want to own. Of the ETF’s I own, the Schwab US Broad Market ETF makes up 63%. Any additions that I make to my ETF’s go directly to the US Broad Market ETF. The other various ETF’s are comprised of US Small-Cap, International Equity, and a US Real Estate Investment Trust. Over the roughly 1 year period and a series of inconsistent additions, the ETF’s portion of my portfolio has appreciated 9.08%. Here is their allocation in my entire portfolio.
Schwab US Broad Market ETF: 35.8%
Schwab US Small-Cap ETF: 11.8%
Schwab US REIT ETF: 5.1%
Schwab International Equity ETF: 4.5%
Stocks:
I have no formula or criteria for my stocks, but I understand what makes a strong company. I look for management that’s willing to sacrifice a few bad quarters in order to meet their long-term goals. I’m also looking for companies with signs of growth and optionality, and the resources required to garner that optionality.
Last month, the “Race to Zero” encouraged me to move all the funds from my Robinhood account to my Schwab, since there was no longer any need to stay with Robinhood for their free commissions. With the funds that I transferred, I had a chance to completely reconstruct my portfolio.
In my old account, I held Square, JD.com, StoneCo, PagSeguro, Yext, Spotify, and Bitauto. After selling each of those holdings, here is how I reallocated that capital as a part of my entire portfolio.
Square: 18.3%
Spotify: 8.6%
Yext: 8.4%
Alteryx: 7.3%
I’ve had these holdings for 2 weeks now, and together they are up 8.5% during that time. I’m confident in all 4 of these holdings and I don’t have any other stocks that I’m looking to buy right now.
All in all my portfolio layout is quite simple, it’s just ETFs and stocks. Ideally, I would like to see the stocks portion of my portfolio grow as my confidence grows and I find quality companies that I can hold over the long term.
We are in the middle of earnings season at the time of this writing, so next month my portfolio’s return may look quite different due to the high level of concentration.
Thanks for reading, check back in a month.