Josh Bruce
Welcome to the rabbit-hole.

October 1st, 2021 paycheck

Created on:

Updated on:

DescriptionTarget low percentTarget high percentActual percent
Debt000.4
Cash51016.5
Low correlation010.4
Negative correlation010.4
US equities - small243520.2
US equities - mid243522.9
US equities - large243539.1

Reduced the 401k contribution to 18 percent. I’m hoping to basically land on the desired 15 percent by the end of 2021. Gives me something to do while passing the time for the IRS resolution.

Won’t be doing the quarterly draw from the savings account this time as I wait for the IRS thing to clear up. When it does, I’m hoping to do the draw and push more money into the overall portfolio.

Revenue

Feeling confident my job and paycheck will be here tomorrow. Having said that, sitting on all this cash is a bit frustrating.

The market dropped a fair amount a bit ago and I really wanted to jump in and purchase more shares in all the things.

M1 Finance experiments

The performance of the six experimental portfolios has been interesting to watch.

I created six pies in M1 Finance. On one extreme there is a balanced total stock market; 66 percent extended market index fund and 34 percent total stock market. This gives me an even distribution between small-, mid-, and large-cap stocks. On the other is a potential risk parity style portfolio I’m considering.

In the beginning they acted as hoped. If the balanced stock market pie was down, the risk parity style wasn’t down as far; by almost half, indicating lower volatility on the drawdown side. However, with this paycheck (as of the 24th), they’re all down roughly the same.

I don’t contribute more money to these experiments, I’m just letting them go.

I’m wondering if this is the way this will be moving forward. They’re all down about 1.25 percent. When the market dipped below 1.75 percent, the risk parity style portfolio was only down 0.75 percent.

Anyway, given I’m just starting these experiments, there’s not enough data to see a trend. And, of course, past performance doesn’t guarantee future performance.

Update

Doing the math again, 18 percent was too low for the 401k. I decided to capture the amount for the given percent and will bump it back up to 20 percent for the next paycheck.

Sold my tax-exempt bonds and used it as the base to buy into the extended market fund. That puts me almost to my preferred two fund approach. Still waiting to see if my request to change the funds available in my 401k will go through.