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Showing posts from January, 2018

Index Investing First Year Results

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It has been a little over a year since I decided to take control of my investments through passive investing.  As mentioned in my first post, I got serious about my financial future after I realized how much the target date fund in my 401k had underperformed the S&P 500 since I started at my company back in 2013.  It was a bit trial and error at the beginning figuring out which index funds to invest in but eventually I landed on a mix of large, mid, and small cap stocks along with REITs and bonds that I was happy with.  Also, I finally consolidated all of my old 401k’s into IRAs at my brokerage.  And the results are in…
Jan 1, 2017 Balance: $158,659.48Dec 31, 2017 Balance: $234,975.18Total 2017 Contributions (including employer): $36,027.77Allocation: 8-10% bonds depending on the month, delta stocks-I don’t hold much cash2017 Total Return: 20.69%Old Target Date Fund Return including fees: 22.21%
Okay-ugh…I missed out on 1.52% return had I just invested in my old target date fund. …

Should I buy my company’s stock?

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My company allows me to purchase stock at its price on the first or last trading day of the year-which ever is lower and at an additional 15% discount.  I buy the stock through monthly payroll deductions and receive my shares the first few days of the following year.  This is a great deal, especially in years when my company’s share price appreciates-my company’s stock was up over 20% in 2017!  This meant after my 15% discount and taxes I realized a 30% return.  Happy New Year to me!
Discounted company share purchase plans can be great investments but only under certain conditions: You don’t have alternative investment options that would give you a higher rate of return than the discount (minus taxes)You don’t have debt at a higher interest rate than the discount your company is offeringYour company will immediately allow you to liquidate your purchased shares
Obviously, if there is a higher return vehicle you could be investing in or your company is offering a 10% discount but you ha…