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.