Month in Review – December 2018

This update is super late because Mrs. Wizard and I were on vacation in Mexico, so I didn’t get around to it. Sorry.

Did 2018 officially mark the end of this historic bull market? Is volatility back to stay?

Hard to say.

It’s been a pretty weird year, so let’s get this over with.

Portfolio Summary

Metric

End of December 2018

End of November 2018

Total Invested

$507,991.43

$490,580.61

Market Value of Total Invested

$505,484.34

$517,150.10

Allocation % – Equity

54.02%

56.47%

Allocation % – Bonds

17.98%

17.39%

Allocation % – “Other”

2.97%

3.04%

Allocation % – Cash

24.92%

23.13%

Income Assets – Invested

$275,343.19

$271,565.01

Income Assets – Market Value

$263,658.36

$276,188.83

Projected Annual Income

$24,979.19

$24,045.00

Invested Yield

9.07%

8.85%

Market Yield

9.47%

8.71%

Stock Purchases

I didn’t make any stock purchases in the month of December. Yes. You heard that correctly. With all that carnage I was too chickenshit to buy a single god damn stock.

I think this rally is going to fizzle, and there will be even better opportunities later on in 2019.

They say you’re supposed to be greedy when others are fearful. Am I being too greedy?

Pay Days

Dividend Income Tracker is published here at the mothership and has been updated.

Total investment income of $4,505.13 with a taxable total of $-172.24. We’ll call it 16 “pay days” with 49 individual payments received.

Options premiums represent $1,215.47 of that total.

Capital gains made up $2,684.84.

Which leaves $777.07 of actual bona fide dividends (plus $23.12 of P2P interest, $-219.01 of sports betting losses, and $23.65 of treasury interest).

Lending Club

Lending club income is aggregated into a single income record for simplicity’s sake. It actually arrives as a lot of small payments over the course of the month.

One loan got charged off this month. Boo!

The overall situation did not improve month over month, nor did it get particularly worse. We now have five very late loans, and one in the “Grace Period” category. That’s a bummer, but at least two of last month’s troublemakers appear to have gotten straightened out, so that’s nice.

The number of bad (charged off) loans we’ve invested in so far comes to 23 out of 270 or 8.52%.

I’ve given up reinvesting principal as it gets paid back to me. The number of quality loans that meet my selection criteria has plummeted recently, which means I can’t keep up with the amount of principal that’s accumulating.

I’ll continue to track the existing loans’ performance to their maturity.

Month

In Grace Period

Late (16 -30 days)

Late (31 – 120 days)

Charged Off (aggregate)

End of 2017

0

0

6

8

January 2018

1

0

4

9

February 2018

0

4

1

13

March 2018

0

2

3

13

April 2018

0

1

4

14

May 2018

2

1

6

14

June 2018

1

0

5

16

July 2018

0

0

5

18

August 2018

3

2

3

18

September 2018

1

1

2

21

October 2018

2

0

1

22

November 2018

3

2

2

22

December 2018

1

0

5

23

Lending club’s algorithm is suggesting I should write down $74.96 worth of principal for the  loans that are late, but as the eternal optimist, I’m going to continue to wait until the loans are actually charged off before I recognize the loss.

That is up significantly from what it suggested last month ($66.55), which makes sense since most of the late loans are now severely late compared to before.

Comparisons

Month over month, investment income was up 20.9% compared to $3,726.31 in November.

Month over month comparisons are stupid given the way that I count “income”. Options activity and capital gains are pretty erratic. But that’s how I count it, so it is what it is.

I now have 5 years (!) of data on my income tracking sheet.

So I’ve been including this table in this segment to look at longer term trends:

DECEMBER – INVESTMENT INCOME HISTORY

Year

Dividends

Options

Capital Gains

P2P (Gambling)

Treasuries

Total

2014

$57.16

$0.00

$0.00

$0.00 ($0.00)

$0.00

$57.16

2015

$413.27

$0.00

$0.00

$0.00 ($0.00)

$0.00

$413.27

2016

$445.29

$205.08

$1,317.45

$3.07 ($0.00)

$0.00

$1,970.89

2017

$625.23

$464.73

$48.35

$32.07

$0.00

$1,170.39

2018

$777.07

$1,215.47

$2,684.84

$23.12 ($-219.01)

$23.65

$4,505.13

Pretty cool huh?

As I outlined in a post in October, I’ve started using treasury ladders to boost the yield earned on idle cash. I’ve added a column for the treasury interest as I’d like to start tracking that going forward.

Raises

None of the dividend distributions represented a raise this month. What a bummer.

So that was what happened in December. I guess this is where I should put some kind of “year in review” summary.

In 2018 we made a total of $21,289.79 in “investment income” which I basically define as realized capital gains – dividends, options income, etc. That’s quite a bit!

I started tracking this sort of stuff five years ago. Here’s a neat table:

Total Recorded Investment Income by Year

2014

2015

2016

2017

2018

$94.99

$4,051.64

$16,202.01

$17,402.16

$21,289.79

The goal of course is to have a consistent income stream that would support Mrs. Wizard and I to live comfortably without any wages. We have a long way to go, but we’re certainly going in the right direction.

What do you think? How was your December? 2018?

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