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Flexo’s Investment Portfolio, 1Q 2010

This article was written by in Monthly Update. 53 comments.

When I reported my net worth earlier this week, RetirementInvestingToday, a Consumerism Commentary reader, mentioned I should be reporting my investment performance as well, as raw changes in balances don’t tell the full story. An investment’s performance can’t be measured just by looking at a starting and ending balance if during that time I make deposits or withdrawals.

Thankfully, Quicken handles a better calculation of investment performance so I don’t have to try to plug all of my cash flows into Excel. I do, however, enter the results into a spreadsheet so I can upload the report for publishing on consumerism Commentary. What RetirementInvestingToday might not have known is that I’ve been reporting my investment performance for a while.

During the first three months of 2010, my best performing investment has been by far my company’s stock. The stock tanked along with others in the industry when the broader market recession began, and at one point was down 80%. That was a good opportunity to pick up discounted stock, with an additional 15% discount given to employees as a benefit. It has recovered significantly since then.

I’d like to start unloading the stock I purchased over two years ago through this employee stock purchase plan, but I’m considering waiting until I can sell at a profit.

In addition to the investments you’ll see in the report, as you might have seen on my balance sheet, I have about as much in cash as I have in retirement. That’s unbalanced, but as I’ve mentioned before, I want to have cash available for some day in a future when I feel the time is right to “settle down.” Buying a house is not currently on my agenda.

Here are my investment account balances and performance numbers as of the end of March 2010. If you have any questions or suggestions, feel free to leave them in the comments.

Investment Portfolio, March 2010

Published or updated April 9, 2010.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 6 comments… read them below or add one }

avatar 1 Anonymous

Just curious about your company’s 401k funds. Who are the funds managed by and how are the expenses? I see no tickers so I assume they are not publicly traded funds (ack! that spells trouble).

Based upon this do you max out your 401k and then Roth IRA? Or do you just go up to your company’s matching and then max your Roth IRA?

I assume since you now have a SEP IRA you’ll be placing less in your Roth IRA and funneling any money you make directly into the SEP instead?

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avatar 2 Luke Landes

Good questions. The company I work for offers a wide variety of financial services, and that includes group retirement plans. So my company or its affiliates manages the mutual funds available in the 401(k). Some of the funds have discounted management fees, but there’s no option as nice as VTSMX. Most have tickers, but I didn’t include them because I am trying not to disclose the company I work for.

I’m maxing out the 401(k) and the Roth IRA. In a perfect world, I’d be maxing out the SEP IRA as well, but I cut back on that for 2009. I added $5,000 to the SEP IRA for 2009, keeping more cash available for non-retirement endeavors.

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avatar 3 Anonymous

Ah I understand about the 401k investing and disclosure then. In my case I once worked for a company that had only actively managed, non publicly traded investment options. Returns and expenses were a mess. Got out as soon as I left.

Regarding Roth IRA to the SEP. Shouldn’t you stop putting $5k in your Roth IRA and do the SEP instead since it’s 100% pre-tax? That to me would be a no brainier in our future tax hike environment we are going to see. The Roth IRA would be the last option in filing up.

In my case I don’t have a SEP but I am wanting to invest me money taxable accounts. Though I suspect I’ll be creating a SEP also.

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avatar 4 Luke Landes

I’m trying to remain diversified with my tax situation… part of my 401(k) is characterized as Roth. I don’t know what tax rates will be like 30 years from now. Probably higher, so paying tax now doesn’t hurt. But perhaps the rules will change and we’ll have to pay tax on Roth withdrawals in the future.

Maybe this is the wrong approach and I’m interested in hearing thoughts and opinions.

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avatar 5 Anonymous

It’s pretty safe to say taxes will be higher at least in the next 5-15 years. After this who knows. Who knows if the country will even exist in it’s current form? At least for me I’m not ruling anything out.

The government risk of changing Roth withdrawals is a very real risk. I don’t believe it will be direct tax though. VAT tax is one indirect way. Same could even apply to 401(k) in what can be invested (The idea of your 401(k) must have US bonds has been tossed around in Congress)

What stinks at one point with retirement investing we only had to worry about inflation, return risk and default risk. Questioning the government (tax and rule changes) was really never part of the equation. Now government risk is becoming a larger risk to consider and addition to already complex and messy risk assessment :-( UGH!

If you were really diversified you would have things like commodities and real estate (at least primary residence). Of course primary RE depends upon other personal factors.

avatar 6 Anonymous

Having half of your non-retirement portfolio in your company’s stock seems like a little much, but if you look at your whole portfolio it isn’t that big of a percentage. I’m curious whether you feel comfortable with having that much invested in your employer’s stock and depending on them for a paycheck as well.

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