Portfolio bumps: $’s vs %’s

As our portfolio grows, which we are incredibly thankful for, I am getting a little more anxiety. With the ups and downs of the market, 1-2% fluctuations that were once just a couple hundred dollars, are now often over five hundred dollars. This makes me a little nervous, having more means having more to lose. How can I stay the course and stay calm?

One thing I do when looking at my portfolio when noticing a loss, I switch my format from $ to %, for me when I see the percentage is small, it makes the loss easier to accept. I realize that this is normal, some days are up, some are down, as long as we’re ahead for the long haul, that is all that matters.

With a larger portfolio, I am constantly aware of the need for research and cautious strategies. We’re saving for early retirement, and not just trying to make a quick few bucks. Plus I have become more aware of tax ramifications of investing. Our goal is to keep stocks longer than a year, so we can benefit from the current 15% capital gains tax as opposed to the normal higher income rate.  I am a little concerned about how the election might change the tax on capital gains. Time will tell. Either way, we will stay the course, but if we see a nice big bump in our stocks (like over 30%) we might SELL! I’m closely watching AT&T (T) and Abbott Labs (ABT). I might sell these two stocks before the end of the year to lock in the gains, then invest somewhere else more attractive.

I am so happy that I sold MCD in February when it was $99.75 I had bought it at $70.00, only 30 shares, but I held it over a year (that was just a fluke, I wasn’t concerned about tax consequences at the time, just wanted to lock in profits). I wish I had held onto TJMaxx (TJX) I sold it at $34.55 (after a 2/1 split) I had originally purchased at $44.99, so I had a nice gain on that stock too, but now I believe it is at up about 10pts from where I sold it. Oh well, hindsight!

Still kicking myself for not purchasing Walgreens (WAG) around $30.00/share, but maybe it will go down after quarterly earnings report, then we can jump into a few hundred shares?

We are currently sitting on about 10K cash, and I’m just not sure where we should put it. We also may add 5K before the end of the year, as our Emergency Fund is getting fat.  I really hate our money sitting idle in the bank earning money for them and nothing for us!

Our goals for the next 8 years are to add 40K/year to our pre-retirement  (non-401k) portfolio each year. I think this is completely reachable because B and I earn nice salaries and although we like to travel we don’t get caught up in lifestyle inflation. We are in the same house I’ve had for 14 years and it’s mortgage free. I realize we are in a unique situation, and we are thankful for our blessings every single day.  Have a great weekend!

2 responses to “Portfolio bumps: $’s vs %’s

  1. It can be a little taxing emotionally when you’re seeing your wealth change by hundreds or thousands of dollars in just a day.

    That would be great if you can grow your pre-retirement fund by $40k per year. I was just reading an article on the state of 401(k) balances and how anemic they are (under $35k at retirement?!), so growing your non 401(k) balance by that much per year is definitely a blessing! Keep it up.

    Best wishes!

    • DM- Thanks for the comment. I’ve read articles like that too, and I’ve seen the truth of it. Some of my friends parents have no plans to retire simply because they can’t afford it. Some of those same friends think I’m kidding when I say that B and I will have the option to retire in our mid 40s. Everyone has different goals and circumstances. Best wishes to you too!

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