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April Update: Coping With Stock Volatility And The Crypto Tax Bite

Apr. 01, 2018 10:56 PM ETMETA, GE, KO, PEP, WFC, ENB, OMC, DDD, ESRX, IBM, MON-OLD, PSX, SCG, TWTR, ENB:CA5 Comments
Paleomillennial profile picture


  • Tech purchases made during the February correction.
  • Discussion of underperforming holdings, including GE and Wells Fargo.
  • How I reported cryptocurrency profits on my tax return.

With the first three months of an interesting 2018 behind us, it’s time for an update on my stock picks, as well as some reflections on my 2017 tax bill - including lessons learned about the tax consequences of cryptocurrency trading. I’ll also discuss how my first-quarter stock trades were shaped by the return of market volatility. All figures below are as of March 31, unless otherwise stated.

My picks lag the S&P so far this year, the main culprits being Wells Fargo (WFC), General Electric (GE) and underperforming healthcare names:

My after-tax return for 2017 was 25.1%. I recalculated the pre-tax figure after developing a new time-weighted return algorithm (and accompanying data set), which uses regular semi-monthly snapshots to eliminate the selection bias I noted in my last article. This method produced the same 25.8% result.

Stock Trades in the First Quarter

In my January portfolio strategy article, I mentioned two outstanding goals: to increase value stocks as a percentage of all single stocks, and to increase my exposure to the technology sector if valuations were to become attractive (spoiler: they became attractive). A new goal I’ve made since then is to reduce the number of my single stock holdings to 30 or less, in order to raise the bar of confidence I have in a name before buying it, and to curb the temptation to hang on to underperforming names.

As shown in the table below, I’ve met the value target, and lowered the holding count meaningfully from 36 at the end of the year. An explanation of other targets can be found in my January strategy article. Two new items since that article are a 40% minimum allocation to stocks in my Asset Quality strategy (strategies are explained in my April 2017 article), and a formalized version

This article was written by

Paleomillennial profile picture
I am an individual investor living in the United States. I base my investment decisions on strict adherence to the process outlined in my articles, and on analyst reports by a small group of reputable, independent research firms.

Analyst’s Disclosure: I am/we are long ALL ASSETS, UNLESS OTHERWISE STATED. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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