2017! Steve’s Portfolio Report

2017! Steve’s Portfolio Report

Happy 2018 New Year! And what a 2017 year for the stock market!

Hi Readers!

Last June I wrote in my second quarter 2017 portfolio report that I would be “very happy if my current year-to-date (Y.T.D.) would be 4.5% return.”

My end of the year 2017 return was: 9.0%!

I not only found new love in my personal life, but my financial life also grew through the roof. My heart and my portfolio have never been so full. I will always have fond memories of 2017.

Since the beginning of 2017, the stock and bond markets have performed excellently. My boring and diversified low-cost portfolio worked as it should, following right along for ride.

Bond Market: The Federal Reserve policymakers did the unthinkable. As predicted for years, they keep raising interest rates since December 2015. Yet, my total bond market index returned 3.6% in 2017 (see all individual investment returns below). Yet, for years the financial media and the talking heads warned again and again that bonds are going to CRASH! This is evidence that the bond market not only did not crash, it MADE MONEY! TIAA’s Traditional annuity, Treasury Direct iBond, and the Total Bond Market Index all returned 3.o% or more. That is wonderful! Wellesley Income fund is made up of 65% bonds and 35% stocks and it went up 10.3%.



Stock Market: Since the presidential election, the primary reason the market went up is that the Trump administration inherited a sound economy, good employment numbers, and a high stock market (Recall that Obama inherited a total and complete mess in 2008!). The pundits reported that the market is anticipating lower corporate taxes, repatriation of the trillions in overseas financial institutions and less regulation. The pundits have been warning about high valuations but it has had no effect on the booming stock market so far. Since December 2017 the tax cuts were passed and the stock market has gone up breaking more records since the New Year 2018 began. I agree that we are overdue for a correction or even a recession, but nobody knows how to accurately predict when and how it will occur. But one thing is certain, there will always (another absolute) be uncertainty, and the cause of the next stock market crash will be unpredictable.

My asset allocation will remain the same as it has been for the last decade. 



I have been writing and preaching for years in my books and here on this blog–PLEASE DO NOT LISTEN TO THE FINANCIAL NEWS:  The media is NOT our friend for meaningful and objective data. It is emotional to scare us into doing something, and the data about the endless talk about individual companies is useless and dangerous because it has nothing to do with constructing a low-cost fully diversified portfolio with a stock/bond split with the bond allocation approximately equal to our age (My portfolio is 67% bonds because I turned 70 years old ).

Sensational news is what makes the financial media money. Boring low-cost investment plans which require long-term thinking do not generate clicks and views. Unfortunately, the likes of Jim Cramer’s “Mad Money” generates millions of viewers and money for CNBC for well over a decade. I never, ever take Mr. Cramer’s advice on ANYTHING!

Watch your investment costs. Below are the costs of each of my Vanguard and TIAA investments. If you want to know what your current financial adviser is charging, ask him or her. You have my permission to copy these tables and take them with you to compare with how your adviser has constructed your portfolio.


Set up a simple lost cost diversified plan and stick with it: This is the primary reason why I have this blog, to share my plan so that you can construct your plan. My plan is for a 70-year-old retiree. My stock-bond split is 33% stocks/67% bonds (My stock allocation above my 30% plan but it’s not high enough to trigger rebalancing).

If you are a younger investor, you would have a higher allocation to stocks. Perhaps a 70% stock / 30% bonds or if in your 20s you can have 100% stocks, but they must be diversified among large, mid, small-cap stocks and international. Do not fret about value, growth, developed or developing countries. The Total Stock market index has both value and growth, large, mid and small-cap US domestic stocks, and the Total International Stock market index has both developed and developing countries.

Required Mandatory Distributions (RMD)

I turned 70.5 in 2018. Thus, I must start taking Required Mandatory Distributions from my IRAs. On January 2, I transferred $20,800 from Vanguard into my checking account to begin my RMD. To give you an idea just how strong the beginning of 2018 has been for anybody owning stocks, my portfolio went up $18,000 since January 2, almost matching what I had taken out.

Before the end of 2018, I will have to take out $15,000 more of my IRAs. There are many different programs and ideas about how to strategically implement your RMD. For me, I have collected the capital gains and dividends from my IRA investments over the past several years into Vanguard’s Money Market account. From the MM account, I transferred this money to my credit union.

Once again, Happy New Year! Remember, it’s never too late to start saving for retirement.



Steve’s Bio

*Stephen A. Schullo, Ph.D. (UCLA ’96) taught in the Los Angeles Unified School District (LAUSD) for 24 years and UCLA Extension teaching educational technology to student teachers. Steve wrote investment articles for the United Teacher-Los Angeles (UTLA) newspaper for 13 years. Thrice featured retirement plan advocate in the Los Angeles Times and U.S. News and World Report. He co-founded an investor self-help group (403bAware with a colleague, Sandy Keaton) for teacher colleagues and wrote 7,000 posts in three investment forums since 1997. Frequently quoted by the media, testified at California State legislative hearings and honored with the “Unsung Hero” award by UTLA for his retirement planning advocacy.

For the last eleven years, he continues to serve on LAUSD’s Investment Advisory Committee as a “Member-at-Large” and former co-chair. The committee monitors the district’s 457b/403b/PARS of 55,000 former and current LAUSD employees, worth $2.4 billion in total assets. Lastly, Steve and his late husband, Dan, were featured participants for the award-winning documentary, PBS Frontline: The Retirement Gamble, aired April 23, 2013.

Steve is the author of an additional book, released in 2015, click here to get a free PDF download:Fighting Powerful Interests: Educators Challenge Tax-sheltered Annuities and WIN!” A story of how a handful of LAUSD educators struggled for years to improve the 403(b) to no avail. But we never quit! We were instrumental in LAUSD’s implementation of the new 457(b) plan and ended up with a “Plan Design” award. 

















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