Georgiana said YES!
Christmas eve at my Walnut Creek’s family holiday celebration
The happiest end of the year report since the 1990’s tech bubble. But something else nonfinancial happened in 2019–I GOT ENGAGED!
Another year and another DECADE ended. Did you read about the announcement on Facebook? I asked for Georgiana’s hand on Christmas Eve with my Walnut Creek family as witnesses, and she accepted! Our wedding date will be sometime this spring, 2020. Each day, Georgiana and I count our blessings, our health, and positive mental attitude at dinner when we pray for the benefit of others, and give thanks where thanks are due. We are so wonderfully lucky. Our friends and family say this all the time about us. We are such a good match in so many areas including finances, sometimes strangers ask how long have we been married.
What a year we had with all of the following trips to two countries, many cities, east and west coasts, one Grand Canyon, one massive desert the biggest in the world, and three beaches: Long Beach, San Diego, and Cape Cod. Here are some pictures:
Winter Solstice, Peaceful Mind and a Peaceful, but Rip-Roaring stock and bond market!
Most of us love summers for many obvious reasons. I have also learned to love the winters too but for different reasons, I had not anticipated. My fiance’ has enriched my life in so many ways. She is the most spiritual person I know and she shows me additional insights.
I love Georgiana’s philosophy and a spiritual belief about the winter solstice and long nights. For example, we are in the shortest days of the year, right after the winter solstice. The early mornings are quiet and are still dark outside. Quiet and darkness are wonderful companions for our minds. They help keep our minds focused because in daylight we are prone to meaningless distractions of events out of our control. The darkness allows us to reflect more deeply so that we can realize that our mind is almost always in a natural peaceful place. The winter months allow us more darkness if we allow it to quiet our minds so we can experience that peacefulness.
I discovered that I also love this time of the year when the Christmas lights are on and the home heater working full blast blowing out warm air to contrast the outside cold. Yes, even in the desert, it gets cold and freezes.
What insights we can discover about ourselves from the darkness that might be more difficult during daylight?
Our “efficient” brain, however, fools us into believing that what we see during daylight is separate from us. The world we see in broad daylight has “inherent” meaning. As my Buddhist teaching says, it does not. It’s a delusion and the primary cause of unhappiness. It’s one of the most fundamental teachings of Buddhism and many spiritual teachings that in believing that the reality around us as separate and independent from us. Such beliefs are one or several delusions that keeps us from being happy 24/7 as we use nonvirtuous actions—hash judgments, gossips, watching the news and thinking that nobody else has my problems, and my problems are caused by others. Most of us know the “we-they” reflects the ugly nature of long-held human tribalism.
Most of us acknowledge this attitude is destructive. We are constantly disappointed and hurt when we believe the “us vs. them” delusion, one of the most basic human delusion. As it is directly tied to racisms, anger, and segregation. In the night (or when we close our eyes during daylight) we are more likely to be meditating and praying, and the more we pray and meditate the more have let in wisdom. The distractions around us during daylight hours are gone during meditation. At least we cannot see the distractions. Wisdom allows us to feel compassionate to others who remain angry and afraid. With wisdom, we can feel when others are distressed about their lives and has nothing to do with us. Wisdom allows people to see well beyond our egos.
What I have written has been thought about and spoken for centuries by hundreds of spiritual doctrines throughout the world.
How in the world does my financial portfolio reflect the Solstice, short days and longer darkness with a peaceful mind?
I know this is a stretch but hear me out. I constructed my financial portfolio during daylight hours but it operates 24/7 with any tinkering or anxiety from me. The outside financial world is jammed packed with doom and gloom predictions, but since I have a peaceful mind, my portfolio will be just fine. I am able to ignore the constant and debilitating noise of the financial news, their talking heads, and their useless doom and gloom predictions. My portfolio is comprised of the significant stock and bond markets that exist on this planet. As Jack Bogle famously said over and over, Don’t look for the needle in the haystack. Just buy the haystack! Investing this way allows me to have a peaceful mind. My Vanguard Total Stock Market ETF and my Total International Stock Market Index, I owe the entire planet’s haystack. St. Jack’s investment philosophy (Bogleheads dubbed Mr. Bogle) is about as spiritual as many ways as he was a giant of an American and enlightened human being. I never worry about investing in the wrong stock or bond because I owe them all!
2010 – 2019
A Great Decade for Stocks!
Speaking of the stock market, what a decade! OMG, it is the longest bull market in history. It’s about the only news information that I trust, but this information has nothing to do with my investment strategy either. My primary purpose of reporting my portfolio performance every quarter is to share how the portfolio works with the broad stock and bond market, and how those investments reflect the domestic and world economies.
My boring portfolio has done exactly what it is designed to do, hold my losses so that in my short life left my money can recover, but in the meantime when the bull market comes out charging it will provide a reasonable return that will sustain my retirement standard of living and then some.
2019–A GREAT YEAR FOR BONDS
The real story for 2019 was the bond market, hands down. Scroll down and you will read that my Total Bond Market Index and the Total International Bond Market index increased an unbelievable 8.71% and 7.88% respectively. Nobody predicted those kinds of returns for bonds a year ago. Everybody was lamenting that bonds were going to crash as interest rates were heading up. And they did rise for about 1.5 years and my bonds lost value. But not for long! I held firm as most of my portfolio is in bonds.
When the Feds lowered interest rates during the latter half of 2019, the bond market went up and up. Recall how bonds work, when the interest rate goes down, the current bonds increase in value because the interest rate is higher than the new bonds. Likewise, when interest rates go up, people want the new bonds at higher rates while the value of the older bonds go down because their interest rates are no longer desirable.
I never thought bonds would return such a high number in 2019. It’s not because I am smart and predicted this, it is only because of one of the basic investment skills to remember. I was very lucky because of the randomness of what happened in 2019. Buy and hold a low-cost diversified portfolio and that applies to both stocks and bonds.
Feeling too Good?
Some people warn not to feel “too good” about this past decade and this past year. The naysayers have complained that the decade resulted in too slow growth. They wanted more average growth and blamed the Obama Administration for being hostile to business. Yeah right! Perhaps that is the way it works because I am sick and tired of the boom and bust patterns of the past. But the naysayers are not done. Even some good folks warned not to take 2019 too seriously because of Q4 2018 when there was a correction, and so 2019 started with a loss and so we have to make up for that decline so trying to make 2019 not as good as it performed. Huh! Some people just love to lecture! And they lecture us about thinking too short-termed. Of course, we know this isn’t the norm, and nothing in the future can be determined by the past. In reality, it takes long periods of time to fully benefit from stock and bond investing.
The biggest surprise that I have experienced, however, is that when I started taking RMD, my taxes when up, way up! But this is not entirely negative. Its a direct reflection that my income is going up during a time I need it to go up–to fund my retirement activities. In 2019 my portfolio delivered BIG TIME. And I don’t care that it started the year very low. Investing is complicated enough and we deserve to celebrate when our wealth grows substantially, and it did in 2019.
If your portfolio did not grow in 2019, fire your financial adviser IMMEDIATELY. Something is wrong!
My portfolio returned 13.2% in 2019
Here is the pie chart of my holdings. Nothing new. With minor adjustments and changes, it’s the same low cost diversified portfolio that I have had for over a decade.
Below are portfolio fees. That’s all I pay. I don’t need an expensive financial adviser, thank goodness! My fee in dollars is an estimation of about $1,100.00 in fees for 2019.
Had I had to pay a 1.5% cost (which is at the low end), my bill would be an astonishing $25,000! Holy Crap! Twenty five thousand dollars, that’s $2083.33 a month! Why on earth would I pay so much money for advice? I am so grateful that I can self-manage my money without an excessively expensive financial adviser.
The last time I experienced this type of wealth increase was in 1999 when our (Dan and I) wealth increased even more. The huge increase in our wealth in 1999 was attributed to the most of our money grew with the technology bubble that will go down in history as the first of two bubbies within a decade, the terrible 2000 through 2009 decade that we all want to forget. 9/11 and 2008. The financial markets recovered in this last decade.
There is a lot to be concerned about going forward but I want to end my New Year’s Post on a good note. America has experienced terrible times in the past, the Great Depression of the 1930s, 1962 Cuban Missile Crisis and the most terrible year I remember vividly, 1968 (two assassinations, riots all over the country, and Chicago was at war during the democratic convention, not to mention the huge mess in Vietnam and the Tet offensive). We recovered from all of those horrific times, and we will recover again. Like the stock market, we don’t know when this current bull market will end and a recession will start. We just don’t know.
Happy new year!
Steve
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) union newspaper for 13 years. He has been featured and quoted in many mainstream media articles about 403(b) plans, including the Los Angeles Times, NY Times, and U.S. News and World Report. He co-founded an investor self-help group 403bAware for teacher colleagues and wrote 7,500 posts in three investment forums since 1997. He testified at California State legislative hearings and honored with the “Unsung Hero” award by his teacher’s union for his retirement planning advocacy.
For the last 14 years, he serves as a volunteer on LAUSD’s Investment Advisory Committee as a “Member-at-Large” and former co-chair. The committee contains collective bargaining reps from the unions and monitors the district’s tax-deferred retirement plans, 457b/403b, of 55,000 former and current LAUSD employees, worth $2.8 billion in total assets.
He started this blog in 2012 to help all PreK-12 public school educators nationwide, especially his Los Angeles Unified School District colleagues. He belongs to a small national group of 403(b) advocates (mostly teachers) who want to bring closer attention to the 403(b). During the last 25 years, 38 newspaper articles have been published and each one says the same thing, TSAs (Tax Sheltered Annuities) are terrible 403(b) plans and the salesperson gets the benefit from lucrative commissions and high costs. Nobody in educational leadership reads these articles NOR talk about the proper place for annuity products publically. We come together at 403bwise.com and 403bwise Facebook page https://www.facebook.com/groups/349968819000560/ Come on over if you want to join us so we can help our colleagues avoid these self-conflicted and high cost Tax-sheltered Annuitie (TSAs).
Steve is the author of two books, Late Bloomer Millionaires and 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 earned a very rare, but very precious “Plan Design” award.
For a copy of both books, email Steve at steve.schullo@latebloomerwealth.com and he will happily email you both books, FREE with no obligation except to read them and get informed, in a pdf file format.