Readers were pretty negative when the year 2019 began – with good reason. The financial markets had sunk severely at the end of last year, the government went into a budget shutdown, and many so-called experts were saying that the next recession had already begun. If you like stability, there was very little to feel optimistic about on New Year’s Day when I published this ARTICLE on market forecasts for the year.
What a difference a half-year makes. While Goldman Sachs was calling for just 5% growth (after -6% in 2018), the S&P500 has blazed forward with 19% already. It’s the half-year the market has seen in more than two decades. It’s made a big impact on our FIRE nest egg. These are the four key measures I generally watch:
- US Stock Index / S&P 500 +19.3%
- EFEA International Index +12.5%
- VBMFX Bond Index +4.5%
- MegaCorp stock +39.1%
What a year! I can only remember a few times when our portfolio has hit on all cylinders like this. Since MegaCorp is a ‘defensive consumer stock’, it has often has run counter to the general market returns. Both 2017 and 2018 were miserable. This year, our remaining MegaCorp stock options are gaining back much of the value they had lost.
Of course, historical performance is no guarantee of future results. Only heaven knows what the second-half of 2019 will bring for market performance. The New York Federal Reserve is still saying there is about a 25% chance of recession in the next 12-18 months. That said, it’s nice to be playing with such a strong lead and I’m feeling good on the bet I made on New Year’s Day that the market would be back in the black in 2019.
How is your portfolio looking?
Image Credit: Pixabay
MrFireStation 
Never better, Chief! However, red-hot equities will cool down. Staying well-diversified across all categories and geographies of investments is the way to stay the course over the long run. I try not to thrill over gains, so I won’t despair over losses. As long as my conservative approach earns modest gains in the long run, I remain Semper FI.
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I definitely pay less attention to the markets than I did when I was working, but the MegaCorp stock crash from $72 to $36 over 18 months was like watching a plane crash in slow motion. Stock options meant the decline had 3x the impact to our portfolio. I can only look away now that MegaCorp stock options have gotten reduced to a single-digit share of our portfolio. Thankfully my average sale price is still above what I planned FIRE on.
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I don’t really watch the market that closely anymore, but I do a once per quarter update to my historical logbook. So I just took a peak at my EOM June results and they looked great. It’s been a strong year on all fronts from my perspective. I’m a simple index kind-a-guy, and they are obviously doing great on all fronts. My market portfolio is up about 14.2% overall YTD. My Real Estate portfolio is also running on all cylinders after a February hot water tank disaster, that impacted three downstairs units in one of my buildings. All are now renovated and renting at even higher prices than before, since they are now practically brand new. My vacancies are down this year, but expenses are up slightly over 2018. I am tracking toward a 12-13% ROI on my RE portfolio in 2019.
It is looking (at mid-year) like a solid year #2 in retirement!
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Getting a good financial start on early retirement is such a nice feeling! (One of my early retirement projects is to drain/check out our hot water heater. Three years in … still haven’t done it!)
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Lol! I have a few of those “honey-do” items that I’m still working on getting to one day, as well! Luckily, there’s always a “free” day next week…right?! (Good thing we didn’t treat our careers or FIRE plans that way!) 😉
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