July 15th, 2024 paycheck

Created:

Don’t let the short-term assets being at 5 percent fool you.

  1. The American Stock Market has been on a tear for the last few weeks, especially on the 16th.
  2. As of right now, all the funds I’m invested in are down less than 2 percent from their 52-week highs.
  3. An interesting part is that the S&P 500, extended market, and total market are all up more than 26 percent from their 52-week lows.
  4. The small-cap, small-cap value, and multi-factor funds are all up roughly 24 percent from their 52-week lows.

I stopped contributing to the extended market fund in 2022 because I wanted to move out of that position. However, I didn’t want to do it when it had a capital loss. Because I have the holding in multiple accounts, each purchased at different times, each individual holding has a different percentage gain (or loss).

A few days ago, I was looking at my Traditional Individual Retirement Arrangement (because that’s what the IRS calls it). It was showing a gain of 8,000 USD. That’s because this holding was purchased when I rolled over my employer-sponsored retirement account in 2022 and again in 2023.

I’m still working through rebalancing behavior, and I’m also taking this opportunity to try to build out a selling strategy.

So far, it seems like it will work out, at least until I feel confident to pick a withdrawal rate and do something on a regular cadence like Frank Vasquez.

The short version, detailed in the next section, is I placed 3 limit orders for the extended market fund. I set them to stick around for 60 days; when buying, I do daily. That means if the per share price reaches what I set it to within the next 60 days, the sale executes. On the first day, the first limit order sold. A few days later the other two did as well.

Funny enough, the total unrealized gains for the extended market fund are still just over 8,000 USD. So, I put in 3 more limit orders using the closing price for July 17th.

And, I’ve been using the buying strategy to buy into the small-cap value fund. Strictly speaking, this isn’t rebalancing, but it’s similar in that I’m trying to achieve the target asset allocation. Only instead of doing it in all at once regardless of market price, I’m doing it through contributions (buying) and withdrawals. I’m also doing most of it through limit orders, not current market price; therefore, I don’t fall victim to wild fluctuations unless I opted into them and I don’t get stung by a gap in the bid-ask spread.

How I buy and sell

Section titled How I buy and sell

I’ve been experiencing a lot of different scenarios recently, which has me modifying how I buy and sell things.

How I buy things is outlined pretty well in the spending from savings protocol described in my Personal Budget to purchase things in my taxable brokerage account as well as the purchasing protocol outlined in my Investment Policy statement.

Recent events has me considering modifications to the investment policy:

  1. If my income streams result in a positive cash flow, I’ll automatically dollar-cost average into tax-advantaged accounts as much as possible (up to the maximum). Further, excess cash after paying bills will be used to purchase more investments in a taxable brokerage account.
  2. If my income streams result in a negative cash flow, I won’t contribute to tax-advantaged accounts. Further, I’ll avoid selling investments as much as possible and reasonable. Finally, I’ll avoid purchasing investments in my taxable brokerage account.

The buying strategy mainly looks at short-term assets in the portfolio, and whether a given vehicle was up or down the previous day.

The selling strategy hasn’t been captured. It hasn’t been captured because I haven’t been in a scenario to think about and experiment with it much.

At its core, the selling strategy is working like this:

  1. Decide a dollar amount to sell from a given vehicle.
  2. Place 3 limit orders based on the closing price from the previous day:
    • closing price plus 1 percent,
    • plus 2.5 percent, and
    • plus 5 percent.

The duration for buy orders is one trading day. I’m experimenting with using 60 days when selling.

The first 3 sell orders proved fruitful in this regard.

The first sell order executed on the first day. The second order executed the next day. The third order executed a couple days later as the stock market rallied a bit.

Because there is still 8,000 USD in unrealized gains for the extended market fund, I placed 3 more limit orders to sell 8,000 USD worth using the aforementioned strategy based on the closing price for July 17th.

I also opened 3 buy orders for the small-cap value fund using its closing price for the 17th. So, we’ll see what happens as equity is pulled from the extended market fund to cash to one of the other funds (the small-cap value fund in this case).

Downsizing

Section titled Downsizing

Received payment for selling the Time Capsule.

Shipped the Verizon 5G home internet equipment back to Verizon. That was an adventure.

Becca and I enjoyed hanging out with Katrina for a few days in Columbus. Becca went camping one of the days.

We drove by, but did not stop to see, Niagara Falls. We visited a friend in Toronto, and he made us pizza from his wood burning stove.

We stayed a night at 1,000 islands on the Canadian side.

Mysterium was enjoyable as always, but we missed almost an entire day as my mind focused on my personal intimacy document and a couple of the relationship documents Becca and I created.

Cancelled a stop in Maine because the partner of the friend we were planning to visit came down with COVID. Wishing them both well.

So, we went straight to the overnight with a friend near Schenectady, New York.

The next day (the 16th) we visited a friend in Pennsylvania before driving a couple more hours to our next stop and sleeping.

Today we’re at a hotel before going to the West Virginia Mine Wars Museum (lovingly referred to by me as The Redneck Museum).

So, planning to be back at the apartment tomorrow or the next day. Becca and I will start scoping out neighborhoods with cheaper and smaller rentals. Still in the Louisville area for now.

Having said that, we’re also starting to look at and consider some of the places we drove through this trip. I’m leaning more toward Canada personally, or at least ridiculously close to it.