2016 Fourth Quarter Update

Keeping track of your investments is always a good idea.  I used to monitor our portfolio every month but found that to be a bit too frequent.  I’ve now settled into the routine of going over our finances every quarter, specifically when it comes to our retirement savings.  This also gives Random Gal and I a chance to look things over and make sure that we are on the same page.  Given that I already track this information, I figured that I would share it with you guys.  I’m hoping this will be a regular feature on this blog.  I’ll also review how our investments did overall in 2016.


Our Holdings – A Brief Summary

We invest primarily in index funds and ETFs.  We also try to minimize fees and expenses as much as possible.  Currently, our overall asset allocation is 75% equities and 25% bonds which is what our target allocation is.  For our equities, we have a mix of domestic stocks, international stocks, and REITs.  We also have a slight tilt to small cap value stocks within our domestic equities.  Our bonds are all index funds and ETFs that are available in our retirement accounts.  I don’t include LRG’s 529 plan in our quarterly checks and updates as I consider that money his and not ours.


2016 Fourth Quarter Review and Annual Review

Our investment portfolio grew by about 10% during the quarter from 10/1 through 12/30.  This growth includes both capital contributions and investment gains.  During this time period, our investment return was 1.45%.  Looking at a graph of our holdings for the quarter, we were pretty much in the red until the first week of December.

2016 Q4 Performance


For the year, our portfolio saw a return of about 9.1% compared with an 11.96% total return of the S&P 500.  Overall, I’m pretty happy with the performance of our portfolio.  Sure, I could chase higher returns by taking on more risk, but Random Gal and I are comfortable with our current asset allocation and how it fits with our overall risk tolerance and financial plan.

2016 Performance


Upcoming Changes for 2017

This report doesn’t include our Schwab brokerage account with all of the expensive mutual funds.  Our plan for this account will be to consolidate all of the funds into one total stock market index fund.  We decided to just bite the bullet and pay any capital gains taxes up front.  This will likely happen within the next few weeks.  Doing this will alter our asset allocation towards equities, so I’ll either adjust our bond holdings in our retirement accounts or purchase municipal bonds in our Vanguard taxable account to bring us back to our target asset allocation.


Thanks for reading.  I’m excited for this coming year, and it will be interesting to see how our portfolio does in the first quarter of 2017.

14 thoughts on “2016 Fourth Quarter Update

  • January 8, 2017 at 10:14 am

    Great job on those returns! And kudos for moving over to a self-hosted site! It looks awesome. 🙂

    • January 8, 2017 at 10:21 am

      Thanks for stopping by and checking out the new site! It’s still a bit of work in progress, but I’m excited about the change nonetheless.

  • January 8, 2017 at 5:01 pm

    First off great job on the portfolio returns. Second off sounds like you have a great plan to consolidate the Schwab account. Moving towards a total market index fund makes a ton of sense. Lastly the new site looks great. I’m sure it was a ton of work but it’s looking phenomenal.

    • January 8, 2017 at 7:28 pm

      Thanks for stopping by and checking out the new site, MSM. Yeah I’m looking forward to getting rid of those expensive mutual funds and simplifying into one index fund. I’m sure we’ll end up saving a lot of money on fees. Thanks for the comment!!

  • January 9, 2017 at 4:53 am

    Congrats on the new website! Looks great! I’ve made it a point to get out of expensive mutual funds that underperform. I made some changes at the end of last month that I chronicled on my blog, and have further changes that I want to make this month. My company’s 401k only offers expensive mutual funds to invest in. My return wasn’t bad in 2016 coming in at about 9%, but those fees are costing me for worse performance! I’ll be moving out of these in 2017 into some lower cost, better performing options.

    Thanks for the update. Keep up the good work!

    • January 9, 2017 at 12:25 pm

      Thanks for stopping by! Yeah it can be tricky if your employer 401k options are limited and/or expensive. Sometimes it’s not worth it, especially if there is no company match offered on your contributions.

  • January 9, 2017 at 6:48 am

    Nice performance! Hopefully the market repeats in 2017 :)…although I won’t hold my breath if it doesn’t. I’m a big fan of total market return funds as well. That way you get decent exposure to all sectors of the market.

    Love the new site design. It’s very sleek!

    • January 9, 2017 at 12:52 pm

      Thanks! Yeah I tend to keep things simple with our holdings, although I do have a few specialty funds like small caps and REITs. Sometimes I’m tempted to add something else, but I always get lazy and just stick with what we got. Thanks for checking out the new site. It’s still a bit of a work in process but I think it looks a bit better than my other site.

  • January 9, 2017 at 8:12 am

    Digging the new website! It looks very professional. Congrats on your performance SRGO, you are on the right track! Paying CG taxes now to move the funds into your index funds is a great choice for the long-term.

    • January 9, 2017 at 12:59 pm

      Thanks for stopping by and checking out the new site!! Yeah we went back and forth on what to do with those expensive funds. In the end we figured that consolidating into a low cost index fund would be worth the up-front taxes if it means we could save on fees and expenses over the long-term. Thanks for the comment!!

  • January 9, 2017 at 8:49 am

    The new site looks great! I’m in the procsss of reallocating my 401k to lower fee funds as well. I found out I can also move up to 80% of this money over to a self directed account which lets me choose exactly which stocks and indexes to invest my money in. since most of the mutual fund options in my 401k have high fees I’m considering this

    • January 9, 2017 at 2:23 pm

      Thanks for stopping by and checking out the new site!! That’s awesome that you have the option of a self-directed account with your 401k. Those can really give you access to a ton of other investment options. My 401k has something similar called a PCRA. It does carry an annual fee, although it’s at a flat rate rather than an AUM percentage. Thanks for the comment!

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  • February 2, 2017 at 5:35 pm

    That is an amazing net worth jump for 2016. Congratulations on that awesome financial win! I look forward to cheering you on in 2017!

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