May 2024 was a continuation of the bull trend that started in November 2023. While we got a slight dip in April 2024, it was very short lived and those that bought the dip saw the markets go back to all time highs. I thought May might bring in more opportunities to buy but that really never materialized. Inflation trended down slightly giving the markets the confidence they needed to rally again. Nasdaq, which has led the entire market for the past few years, rallied to new all time highs thanks to Nvidia owning everybody. Nvidia will be the largest company soon enough as it is only $0.5bn away from Microsoft.
If you haven’t already read my posts before, I achieved Financial independence back in late 2020 early 2021 with a portfolio of roughly $1.3m invested in mainly ETFs. This ballooned to $1.7m during the peak of the markets in early 2022 before coming back down to Earth later in 2022.
This post will be part of a monthly series of portfolio updates that summarizes how my portfolio performed, what trades I executed, what my monthly expenses were, and my general outlook on the economy/markets. This is by no means financial advice so do not look look at me for sage advice. I make stupid trades and make even worse losses quite frequently.
This is simply the performance of my portfolio and how it has performed on a month to month basis.
Monthly Highlights – May 2024
Net worth is near $1.86m as of May 2024 Month end+$90k for the monthTraveled all throughout Indonesia including another visit to one of my favorite islands in Lombok, diving with whale sharks in Sumbawa, and finally a short stint back diving in Komodo because that’s just the best place!
Market Moves
What is in my portfolio?
My portfolio is quite simple and straight forward. I have my holdings primarily spread out between a few ETFs, fixed income, and various single name stocks.
Fixed Income
Due to rising rates, I’ve also allocated a small part of my portfolio (<5%) to fixed income products. I’ve been purchasing 5.5% yielding treasury bills with a 3-6 month expiry. I currently have about ~$60k invested in a 3-mo T-Bill that will expire in June 2024.
I will probably roll this contract and buy another 3mo t-bill when it expires in June 2024 as the 5.5% yield is hard to pass up.
This is guaranteed money with zero risk which I decided to take advantage of while waiting for better entry points. However, it seems like this money probably would have been better used just buying the market but this is opportunity cost I’m willing to sacrifice.
I also purchased I-Bonds in 2022 at the height of inflation peak when I-Bonds were paying 9.5%. The rates have come down significantly since then as inflation itself has come down. The optimal time for me to sell these bonds were on Dec 1, 2023 as that would have been the last month I was eligible for the higher rate of 6.4% (still higher than what treasuries paid). As you must forfeit three months of interest upon withdrawal before 5 years, in total my blended rate of return was around 8% for 15 months which is definitely something I can live with.
ETFs
Again, my primary holdings are in a few ETFs. My primary holdings are in VTI, VGT, and VCR. I’ve always been a big proponent of big tech and have been heavily invested in the Nasdaq for over a decade. This has paid off very well for me given the massive bull market of the 2010s and is essentially what allowed me to FIRE so quickly.
I used to hold more dividend generating stocks as I was really into this type of investing at a period of time. I currently do not have many dividend specific ETFs as I prefer growth more than income. This kind of goes against the ethos of financial independence but I have enough money coming in from other sources that I don’t need to focus so much on income.
I added to my ETF positions in May 2024 when the Nasdaq dipped in early May. I like to add positions on dips and the pullback was enough of one for me to start adding to my position.
Single name stocks
Some of the single name stocks I own are the following
TSLABRK.BNFLXRITMASMLANETARES
These single name stocks make up less than 10% of my total portfolio. I tend to not buy much single name stocks anymore as there’s no point to take on unnecessary risks when I’m already so diversified with my ETFs.
Real Estate
I currently own no real estate. I used to own property in the US but have sold it in 2022 before rates started rising. I am not a big fan of real estate. While it definitely can be a good investment, I don’t think it beats investing in the markets. In addition, real estate is highly illiquid with high transaction costs that few people consider.
Finally, as someone that travels around the world and does not like to be tied down to one location, real estate doesn’t make sense as managing it from afar creates a bunch of headaches. I much prefer to have my money liquid and in the stock market.
May 2024 saw a resumption of the bull market that’s been the tell of the tale for a half year now. April saw the only dip in this bull market but it was promptly bought back up as inflation numbers came in on the softer side. Markets rallied to new all time highs during the month before selling off slightly into the month end.
As you can see from the below screenshot which I always monitor using the CME Fed Fund Futures website, the expected rate in Dec 2024 is at 5.25% (just 0.25% below where we are today) which means just one rate cut. I could see this changing to no rate cuts very soon if inflation still remains sticky. This did not change much throughout the month as the numbers from April month end were roughly the same.
In May, markets rallied 6-7% on the Nasdaq and about 4% on the S&P 500. Earnings have largely been strong even and May saw NVDA absolutely crush earnings which allowed markets to rally even more. NVDA will soon become the biggest company in the world as it is only about $0.5T away from Microsoft. Crazy to think that this company used to less than $1T just a year ago.
Market Value of Portfolio
Here is a history of my portfolio value. As you can see, it’s moved in line with the markets as should be the case since most of my holdings are in ETFs that track the S&P 500 and the Nasdaq.
In total, my portfolio is sitting somewhere around $1.86m which also includes cash and fixed income positions. This probably be over $1.9m if it weren’t for my covered call MTM losses.
Trades executed for the month of May 2024
May was a quiet month for my trading regime. I bought more VGT on the back of dips but there really weren’t that meaningful of tips to be had. I also bought in to ARES which is a private equity company that has been very consistent over many years.
Summary of stock and ETF purchases
Portfolio withdrawals and expenses
Withdrawals from my portfolio is an important part of the financial independence ethos. The 4% withdrawal rate rule is one of the main concepts of the FIRE movement which I try to adhere to. Generally, I prefer to sell from my portfolio when markets are near or at all time highs to capture, and only when I actually need the cash.
For the month of May 2024, I traveled to Seoul, Korea which marked country #94 for me. I also spent some time in Japan which was amazing given how much the Yen has depreciated. It really felt cheap especially compared to my last visit back in 2015 when the USDJPY was around 110.
I made no withdrawals from the portfolio as I had enough cash coming in from my blog as well as leftover cash from other sources. My blog generates money every month to the tune of $3-4k and I cover exactly how I earn money from blogging in other posts.
Dividend Income
For May, I collected a total of $250 in dividends. I typically reinvest my dividends which has served me well during the market downturn of the last year or two. I think I will probably stop reinvesting dividends in the near term as I like to keep a cash pile while stocks are at all time highs to reinvest when markets eventually dip.
