2023 First Half Update

2023 Second Quarter Update:

The first quarter was full of re-evaluations of financial goals and strategies and was full of fear over impending disaster in my family. Back then, we had to make difficult decisions and have difficult conversations.

The second quarter of 2023 was much milder.

New All-Time High

After a year and a half of being in a net worth drawdown, we emerged at the end of June at a new all-time high. We're just shy of $150,000 at $149,097/€136,162. That's a quarter-over-quarter rise of 10.05%/9.05%.

The 2022 bear market, although not extreme by historical standards, was the worst extended drawdown we've had to live with during our married lives. Despite some losses, there were no disasters in our portfolios, and the stress lead to some necessary reappraisals of how best to allocate savings. I'm grateful for the lesson and happy to allocate most money to an ETF/mutual fund asset mix. While my stock picking has done well this year, I feel safer knowing that all of our eggs aren't in that basket.

The drawdown was exasperated by the drawdown of our incomes. My wife has a lull in her business as she changed strategies, and my extra income opportunities at work dried up. As the market corrected, we were unable to add money in any kind of aggressive way. However, both of those states have started to change: I've found new sources for additional work, and my wife's new business strategy is starting to pay off. It's exciting.

Family Disaster Averted

After much Sturm und Drang back in January and February, it appears that PoorParent will stay put. Staying put means staying in an uncomfortable but stable situation with a family member who has health problems.

It's clear that PoorParent isn't thrilled with this, but they also don't appear to be angry at me and Sib.

Honestly, Sib did most of the heavy lifting. I helped Sib define their own boundaries and see how they weren't respecting their own limits and desires. This lack of self-respect led to Sib not respecting my limits. But once Sib understood this, they had the uncomfortable conversation with PoorParent. Thus far, admittedly, I haven't spoken to PoorParent about my worries. They haven't brought it up, and I won't either.

Portfolio Performance

My individual stock portfolio returned 19.91% in the first half. This was mostly led by Greenbrick Partners and Apple Inc. Greenbrick is now a 1 bagger. It's had astounding performance. But so has Apple! Frankly, if there's any greatest mistake I've made while investing, it's selling even one share of Apple, and unfortunately, I've sold many more than one.

The laggard was Abbvie, which is facing increasing competition from Humira biosimilars. I may add more to the position if its price nears my purchase price.

The Wiseguy Portfolio as I've implemented it is hard to measure. Because it's across three different accounts and uses Vanguard "Admiral" funds in addition to ETFs, it means that getting close to the target weights is currently very tricky. Additionally, the iteration of the portfolio I call Wiseguy 2.0, which includes REITs, didn't take place until a few months ago.

An idealized version of the portfolio returned 12.07% in the first half of 2023. That underperformed the S&P 500, which returned 16.81%.

Second Half Financial Goals

As of yesterday, I have maxed out our 2023 IRA contributions. I put the final $2,000 into the US REITs portion because I refuse to hold a REITs ETF in my taxable accounts. Currently, I'm overweight REITs and US large-cap growth and through the rest of the year, I'll be adding to gold and the small cap value buckets in my taxable account.

We're also rebuilding our emergency fund. If we aim for 6 months of spending, then we need around €16,000, which we're not close to. I'm not planning on pulling a Ramsey and devoting every euro to that goal, however, and I will simply be adding monthly sums to it in addition to other saving. That kind of single-minded focus doesn't make sense when I have plenty of assets, and the risk to my livelihood is so low in comparison to the American "at will" employment reality.

That said, having extra cash would be reassuring.

We've also begun a small down payment fund. We're not devoting large sums to it yet, but it's frustrating not having anything saved for a better living situation.

My wife suggested a dog fund. We both want a dog someday, but we're concerned about the cost, so we've begun saving for it.

Wrap Up

I don't see any disasters on the horizon. The stock markets could always take a dive, which would be both a bummer and an opportunity. No matter what, we'll keep saving as best we can without running afoul of our dual tax situation. Until next time, stay healthy and keep saving. It adds up over time!