Quarterly Financial Review

2014-11-19 13.36.43-1The way you feel right now is how a bull market impacts consumer sentiment.

  • Gas prices are down – a big psychological boost for me
  • Asset prices are at all-time highs – makes me feel safe
  • Your business is performing well – makes me feel safe

In these conditions, it’s tempting to change investment strategy and chase recent high performing assets (or managers).

We’ve decided to stay-the-course. There’s hasn’t been any major change in our life situation so there need not be any change in our investment strategy.

We’re on track to achieve our goals:

  • The freedom to chose rewarding part-time work
  • A source of income that we don’t outlive
  • Educating our kids
  • Passing capital to our adult kids when it’s time for us to say good-bye

Do you know your goals?

Do you know the behaviors that can screw up achieving your goals?


We sold our old house in September and I implemented our strategy of gradually buying equities. We’re 34% equities so there’s been “lost profits” from having money outside of the equity market – especially when the US market hits all-time-high after all-time-high…

Surprisingly… lost profits don’t bother me, or screw up our goals, and I was relieved in October when the portfolio held up well.

Dollar-based equities have continued to outperform our international investments so I’ll rebalance by tilting new purchases towards international. Yes, I’m going to buy more of what everyone is saying will tank in 2015 (VTIAX). I have a strategy of reinvesting dividends and keeping International equity at 50% of my US equity exposure.

It’s likely that I’ll need cash flow to cover year end expenses. I will sell bond funds to raise the cash. That will bump up our equity allocation as a percentage of assets.

The underperformance of our international equities creates the possibility of tax-loss harvesting in December. Next week, I am preparing draft accounts for the different parts of my family and reviewing the cost basis of our investments. Later this month, we will decide if it makes sense to realize losses.


We spend $12,000 per annum at Whole Foods and they are offering a 10% rebate on gift card purchases through Jan 1. They let us pay with a credit card which gives another 1% via cash back. That is an 11% return on investment, on money we are certain to spend.

We eat at Native Cafe and they have an even better offer of a 20% rebate on gift card purchases. There’s only one location in Boulder and the company financials aren’t are strong as Whole Foods. I’ll limit myself to five months worth of meals.

Even better than shopping at Whole Foods, or eating out, is staying at home and using goods purchased at CostCo. We spend $10,000 a year at CostCo and it saves us thousands of dollars.

If you don’t know what, where and when you spend then Mint.com is an easy way to track your family finances.