A Look Back at 2013

As I mentioned in my last post, 2014 Financial Goals, 2013 was quite a year with the arrival of our new baby girl and all. I wanted to put my 2014 goals on the table before doing my 2013 review. Now’s the time to recap last year’s most popular blog posts, followed by some final numbers on the year and my market “outlook” for 2014.

2013’s 4 Most Popular Blog Posts on RetireBeforeDad.com
The most widely read post on Retire Before Dad in 2013 was Learning From Your Co-workers Who Cannot Retire.  This post came about after a co-worker sat down next to me one day and started talking about his problems. Thanks J. Money for linking to this story on Rockstar Finance AND Budgets Are Sexy for some extra eyeballs.

Coming in at a close second was my post entitled Patience Pays – 16 Years of Buying and Holding Coca-Cola.  With this post I go into the early days of building my KO shares and what the stock has done since 1997. If you haven’t already, check out the chart in that post showing the stock spiking in 1998 to higher than it trades today. Crazy to think about that, but the post shows the importance of not overpaying for a stock, dollar cost averaging and dividend reinvestment. Mega thanks to Passive Income Pursuit, Dividend Ninja, and Dividend Growth Investor for sharing this story with their readers, and a sincere thanks to those readers who have stuck around.

Santa’s Dividend Stock Portfolio was third in reader views which really surprised me. Most of this page view volume was due to my curiosity of Reddit. A few weeks after I posted this article to my site, I joined Reddit as Retire Before Dad and shared this post just to see how it worked. The readers voted the story mostly up throughout the day, offered a few compliments, and of course weighed in with their legendary negativity. I thought I followed the rules and reddiquette of the website, until a sub-Reddit dictator came in and deleted my post saying “we don’t allow blog promotion”. One reader rated my blog a D- overall, but apparently this guy was tough grader and a D- was on the high side for him. I’ve since deleted my Reddit account. Check out the Santa image too which I enjoyed putting together.

Fourth in line was my post CVX and How I Got Started Dividend Investing. I’ve owned CVX for 18 years.  This story was the first bit of success I experienced in terms of readers. Please read this one if you haven’t already and call yourself a long-term investor or you own CVX. Along with the Coke post, this piece will strengthen your resolve and help show you why buying and holding great companies that pay dividends can be a great strategy.

Some Quick 2013 Numbers

You gotta love positive stock market years! My family’s net worth increased by about 25% in 2013. This number is down from a 28% growth rate last year, but that’s expected as the numbers get larger and I am quite happy with this. I track this number meticulously every month, but have not included it in this blog as of yet.

My 401k plan had another sub-par year increasing just 22.6%. I say another because I have been conservative with the allocation of my 401k because I am not happy with the very limited number of American Funds available in the plan. I work for a small company and have below average 401k plan options, thus, I have chosen to lower the beta with some cash and bonds. There are no index funds available, no ETFs, and only the one fund family. When you add in a 4% salary match and the tax benefits, the 401k has been quite a boon to my net worth over the years. My wife’s 401k on the other hand had a super year increasing 39% due to some good returns in the managed mutual funds and stock in that account. Today I took some first steps to roll this into her IRA since she is no longer with the company.

My Traditional IRA also beat the S&P finishing the year up 35%. This holds a few Fidelity mutual funds that performed quite well even after fees. Mrs. RBD’s traditional IRA landed in line with the S&P 500 31.5%, which is no surprise since it only holds SPY (S&P 500 ETF) and IWM (Russell 2000 Index ETF). My Roth IRA came in up 37%, singularly invested in a Fidelity Mid-Cap Value fund. Finally, Mrs. RBD’s old TSP (Thrift Savings Plan) was up 23%, solely invested in 2040 Lifecycle Fund, and soon to be moved to her IRA.

These retirement accounts all sound very messy and it’s one of my goals in the new year to consolidate them and reallocate the holdings. As for my taxable account (which is what I mostly write about and share on my Investment Income page), I am more concerned with the income the stocks produce rather than beating the S&P, a concept articulated nicely by Dividend Mantra in this post. The 25% number isn’t entirely apples to apples because I added a lot of cash to this account during the second half of the years after a chunk of the big market increase. So comparing this account to the S&P doesn’t tell a complete story, but I still enjoy putting the numbers side by side.

RBD 2014 Outlook

“It will fluctuate.”   -Benjamin Graham when asked what the stock market would do.

I concur with Mr. Graham’s market prediction. Fluctuate it will, so dividend investors need to be ready with their cash and watch list to pick up shares of strong companies at good valuations.

Looking at the stock markets, it’s been a long road since the financial crisis of 2008-2009. A long road UP that is, and during 2013, investing began to feel all too easy. Maybe we’re due for a correction. But the last time things felt this easy was 1995 when the S&P 500 was up 37%.  Was the market overvalued at that point?  No, the index increased more than 20% annually for each of the following 4 years.  But it wasn’t a straight shot.

With the Federal Reserve starting to reverse its ultra-loose policies on the economy and the US employment barge finally turned and heading in the right direction again, just maybe we are in the beginning of a great long-term growth period.  Or, maybe there is another crisis looming that nobody sees.  Whatever happens in 2014, my long-term plan to retire in 2031, 17 years from now, should not be impacted too greatly.  So steady as she goes.

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12 Responses to A Look Back at 2013

  1. Fast Weekly January 3, 2014 at 9:26 am #

    That’s some great capital appreciation RBD. Good work!
    -Bryan

  2. JC @ Passive-Income-Pursuit January 3, 2014 at 11:02 am #

    Man, the worst performance was +22%. Not too shabby. This was a crazy year and I don’t expect and I don’t hope for a repeat in 2014. As far as the markets, I’ve got no clue. I’ll just look for opportunities to invest when I can at valuations that are reasonable.

    • retirebeforedad January 3, 2014 at 8:59 pm #

      PIP,
      I know, I shouldn’t be disappointed with 22%. One of those incredible years we’ll always look back on foundly. I’d prefer many consecutive years of 10-15 but it never works out that way.
      -RBD

  3. writing2reality January 3, 2014 at 1:26 pm #

    Great progress, both with the investments and the blog, RBD! Some great posts you’ve had in this first few months of blogging, and the investments speak for themselves. Looking forward to watching you hammer out the posts and progress on your 2014 goals.

    • retirebeforedad January 3, 2014 at 9:00 pm #

      Thanks WYOR. Looking forward to a great new year.
      -RBD

  4. Integrator@financiallyintegrated.com January 5, 2014 at 1:42 pm #

    Congrats on a strong performance this year. I guess your 401k didn’t track the S&P 500? Still 20%+ is a great effort. If only every year was as blue ribbon as this one, we’d all be done in a few years :)

    • retirebeforedad January 5, 2014 at 1:58 pm #

      Integrator,
      Yeah I’m not thrilled with the 401k performance, but I have some cash and bonds in there because I am not happy with the selection of funds in my account. I am hoping to move the funds elsewhere soon, and therefore have it hedged a bit. I want to put it into some low cost index funds or ETFs, but I don’t have access to any in this account, only high cost mutual funds. Can’t complain too much since it was such a great year though.
      -RBD

  5. retirebyforty (@retirebyforty) January 6, 2014 at 3:18 am #

    25% increase in net worth is awesome! Congratulation. Our net worth went up about the same %. :)
    I’d be very happy with 8-10% increase in 2014. We are a bit low on cash at the moment. It might be time to take some profit and set some cash on the side.
    Good luck in 2014.

    • retirebeforedad January 6, 2014 at 6:37 am #

      RB40,
      Thanks! I saw that 25% number on your post too. Congratulations. Yeah, after a year like 2013, I’ll settle for lower stock market returns for sure. NW on the other hand I am aggressively pursuing. At this point in my journey however, stock market does have a big impact on NW.
      -RBD

  6. Leigh January 28, 2014 at 11:02 am #

    Messy investment accounts sounds frustrating. I’m so glad I’m still only managing one person’s accounts! Why not roll her old 401(k) into the TSP? It has such low expense ratios.

    Does your 401(k) not have stock funds? I think I read on the Bogleheads forum once that if you have high expense ratio funds, it’s better to use the stock ones since the expense ratio will eat at less of the return.

    • retirebeforedad January 28, 2014 at 11:21 am #

      I want the money out of the TSP and into something with more options. Fidelity is where her retirement accounts are now, so that makes the most sense. Its only about $6000. But I still have to log in to see it. Need to get it out to consolidate. My 401k has America Fund stock funds. But they are expensive. I have no other choices unless I leave me job, which I am working on!
      -RBD

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