Portfolio Updates

I somehow lost my original update that covered the period from August 2018 to August 2019 so I have decided to update all the way until June 2020. A lot has happened over this period so let’s get started!

Coronavirus Global Pandemic

This period included the global sell off in equity markets and the lows reached late March. This was a great time for stocks to be ‘on sale’ and I encouraged my children to invest whenever they could. I even took some of their account (up to half!) off the table in early March and bought back in at the lows. M1Finance makes this very simple to do with a couple of clicks and I will show you how!

The Numbers!

Well let’s get to it then.

DateTotal Portfolio Value% Gain / (Loss) From Start
August 2018$712.94
August 2019$1,317.0384.7%
June 2020$1,850.22160%
Total Account Balance is 160% greater than it was in August 2018! As you will see below some of this is contributions and represents a total return of 44.5% equity gains and dividends!

As a reminder, our child’s M1Finance portfolio is made up of several nested or embedded pies. The outermost pie is made up of two slices, one for each child. This allows us to have their own stock selections held appropriately and makes it easy when we make contributions for both we can split it up according to how much each of them have deposited.

You could create separate accounts for each child, but because there is a minimum contribution of $10 dollars per account, this helps them ‘pool’ their funds to contribute more frequently as in some cases they would not have enough to contribute alone.

August 2019

Outermost portfolio contains a custom pie for each child at 50% each.
Child 1 Pie – Contains mostly a custom pie that we have selected to represent broad diversified holdings. They have their picks at roughly 30% and then S&P ETF for 5%
Child 2 Pie – Same as above.

June 2020

Below images as of June 2020.

$353.36 in Market Gains and $53.35 in Dividends so far. Compounding interest at its finest! Hard to believe they have contributed $1,496.86 so far!!
Child #1 Pie
Child #2 Pie
This dot represents roughly where we were with the August 2019 update until now.
At this point we were roughly half in cash which represents the lowest point in the portfolio for the last year. This chart only represents invested $$ not total account value. In other words it doesn’t count cash in your account as part of this $$. Sold up to half over the period of a few weeks in early March due to market volatility related to the pandemic in order to have additional cash to re-invest.
At this point we are back fully invested in the market!!
This chart outlines the incredible gains (20%) in just the last month!

How to “Raise Cash” in M1Finance

The term ‘raising cash’ is simply a way to indicate that you have sold some stocks or equities and have increased the size of your cash position. Having cash on hand is a great thing when markets sell off and allow you to have fire power to buy stocks on the pull back when they’re on sale! If you have no cash on hand when stocks sell off, you basically will only wait to get back to ‘even’ again.

Here is an example, if your total portfolio balance is $1,000 and stocks sell off 20% then your balance will be $800. If you have no cash to deploy and just leave everything invested, when the market recovers you will only be back to $1,000 again and really have ‘gained’ nothing new. Instead, if you were able to deploy additional funds when the market was down then when the market gets back to where it was before the sell off you will have more than $1,000. Make sense?

In M1Finance, this is really easy to sell equities and ‘raise cash’ whenever you want. Just pull up from the bottom of the main portfolio screen and check your ‘auto-invest’ settings. The reason you want to check this first is because if you just choose to sell a certain dollar value from a pie it will just reinvest it/rebalance it if Auto-Invest is on. Click on ‘Auto-invest’ to change the settings.

After clicking on ‘Auto-invest’ then you have two options. You can either turn off auto-invest entirely so that no investments will be made to any cash that is deposited or is ‘raised’ by selling your existing positions OR you can leave it on but set a ‘minimum’ amount of cash to have on hand before Auto invest will take place.

Turning off Auto-invest is simple, you just flip the toggle next to ‘Auto-invest.’

If you want to leave it on but set a minimum threshold, just enter a value in the ‘auto-invest minimum.’

Now you can go to any position or pie and click on it place an order to sell a certain dollar amount from that pie. Because you first have turned off auto-invest or entered a certain minimum threshold, the funds from selling that position will remain in cash.

The great thing is that once you have a certain amount in cash, you can average into purchases by just changing the minimum threshold each day. So what I did in late March was just lower the minimum threshold every day by a certain amount to invest back at a lower price and ‘average in.’

All of these trades did not cost me as there are no commissions or fees. If you are interested in learning more about M1Finance check our full review!

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