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It is my firm belief that 80% of money managers can't outperform the S&P 500 index over time due primarily to the fees they charge their clients. Each and every individual person intent on having the happiest retirement possible could and should take charge of their retirement portfolios and invest in simple index/mutual funds and/or a balanced portfolio like the one I have set up to maximize returns over decades of performance. My ratios and distributions are based on my book - Investing Better Than A Money Manager: The Rise Of Retail Investing.
Contributions
Contributions make up a vital component of your portfolio especially when you are starting out as they are the building blocks of tax advantaged savings for retirement. The more money you have, the more concern you should have with taxes. This is why when you start out investing, you should try to add to accounts like IRAs ASAP instead of putting the money in regular investment accounts.
Contributions | IRAs | 401(K)s |
Jan 2021 | $0 | $2,100 |
Feb 2021 | $12,000 | $0 |
Mar 2021 | $0 | $0 |
Apr 2021 | $0 | $3,000 |
May 2021 | $0 | $0 |
June 2021 | $0 | $4,580 |
July 2021 | $0 | $0 |
Aug 2021 | 12,000 | $1,557 |
Sept 2021 | $0 | $1,500 |
YTD CONTRIBUTIONS | $24,000 | $12,737 |
Here is how my portfolio performed compared to the SPDR S&P 500 Trust (NYSEARCA:SPY) over the first three quarters of 2021.
Fund | SPY | Welsh | Welsh Minus Contributions |
% Gain Jan 2021 | -1.02% | 2.85% | 2.2% |
% Gain Feb 2021 | 2.84% | 2.59% | -1.1% |
% Gain Mar 2021 | 4.16% | 1.53% | 1.53% |
% Gain Apr 2021 | 5.65% | 3.01% | 2.13% |
% Gain May 2021 | 0.66% | 0.00% | 0.00% |
% Gain June 2021 | 2.17% | 7.75% | 6.4% |
% Gain July 2021 | 1.99% | 0.63% | 0.63% |
% Gain Aug 2021 | 3.17% | 6.63% | 3.03% |
% Gain Sept 2021 | -4.84% | -5.45% | -5.82% |
YTD GAINS | 21% | 26.99% | 15.84% |
Regular contributions to your retirement portfolio help your portfolio to grow even on less than ideal months where you fail to outperform the S&P 500. Not every month will be a winner, but regular contributions can help make anyone's performance look great over time.
Here's how the SPY has tracked over the first part of 2021.
My portfolio was divided up to start 2021 at around 73% stocks and around 27% mutual and index funds with the goal to increase stocks to over 80% of my portfolio over time. It is currently built with approximately 83% domestic stocks and 16% foreign stocks I have about 3% of my portfolio in bond mutual funds so that I know how they work and to have at least a little exposure to this sector over time. I plan to have bonds be a very small portion of my portfolio up to right around age 65. Diversification lifts my whole portfolio's returns over time, so finding the best stocks in every sector is a goal for me each and every year. Here are some of the main changes since my last portfolio article in August of 2021.
Welsh Portfolio | Stocks | Index/Mutual Funds | Bonds | Domestic | International |
December 2020 | 72% | 28% | 3% | 85% | 15% |
January 2021 | 73% | 27% | 2.6% | 87% | 13% |
February 2021 | 72% | 28% | 3% | 89% | 11% |
March 2021 | 73% | 27% | 3% | 87% | 13% |
April 2021 | 72% | 28% | 3% | 83% | 17% |
May 2021 | 72% | 28% | 2.8% | 84.7% | 14.8% |
June 2021 | 73% | 27% | 2.6% | 81.4% | 18.6% |
July 2021 | 73% | 27% | 2.6% | 86.4% | 13.6% |
August 2021 | 73% | 27% | 2.5% | 86.1% | 13.9% |
September 2021 | 72% | 28% | 2.6% | 83.6% | 16.4% |
Here are the details of my personal ~$379k portfolio then, based on values of approximately $40k, $400k, and $4 million broken down by sectors with brief descriptions of each stock in each sector. The best thing about my portfolio setup is that it is scalable so that people interested in following a similar path can set up their portfolios to follow my path no matter how small or large their holdings are. With fee-free trading and the advent of fractional shares, investors are more capable than ever in setting up amazing portfolios even when starting from scratch.
The Information Technology Sector (Aim = 15% of my Stock holdings)
Stock | $40K | $400K | $4M |
AAPL | $2,830 | $28,300 | $283,000 |
QCOM | $810 | $8,100 | $81,000 |
DELL | $580 | $5,800 | $58,000 |
RBLX | $560 | $5,600 | $56,000 |
% Portfolio | 17.4% |
1. Apple (AAPL) should be considered as a potential cornerstone piece to any portfolio as one of the world's largest and most profitable companies that prints money almost faster than the Fed. I plan to hopefully always have Apple as one of my top 3 individual stocks over time as I continue to build my position over time. New iPhone innovation and the stickiness of the Apple ecosystem continue to impress along with Apple being able to raise prices at will when they have supplier cost issues.
2. QUALCOMM (QCOM) is a major technology solutions provider for companies like Apple and will be an integral part of upcoming transformational secular revolutions like 5G. I always like to have at least one chip company in my portfolio at all times.
3. Dell (DELL) is a legacy holding which continues to aggressively seek M&A opportunities like the value acquisition of the $67B EMC deal and the future spin-off of the hybrid cloud giant VMware (VMW) which it currently owns ~80% of. Michael Dell is a shareholder winner through and through and following in his stock footpaths I think is a good long-term decision. The upcoming VMware spinoff should allow Dell to deleverage significantly again allowing it the free cash flow to hit its remaining debt hard before Michael Dell moves on to his next acquisition.
4. Roblox (RBLX) is a teen gaming platform that came public through a direct listing in March of 2021. My hope was that it did not come out of the gate as hot as earlier IPOs DoorDash (DASH) and Airbnb (ABNB), which were too expensive for investing in for me personally when they first premiered. I was very happy to get in at the IPO price of $64 a share when it premiered for a large holding in my portfolio. I always try to have an eye on what younger generations are loving and this platform is expanding and growing phenomenally.
The Health Care Sector (Aim = 15% of my Stock holdings)
Stock | $40K | $400K | $4M |
ARWR | $2,550 | $25,500 | $255,000 |
MDT | $490 | $4,900 | $49,000 |
LLY | $570 | $5,700 | $57,000 |
PFE | $350 | $3,500 | $35,000 |
SNDL | $130 | $1,300 | $13,000 |
SMMT | $420 | $4,200 | $42,000 |
% Portfolio | 16.6% |
5. Arrowhead Pharmaceuticals (ARWR) is my 3rd largest individual stock position as an RNAi juggernaut entering key Phase 2 and 3 trials in 2021. A lovely balance sheet with key partnerships with Janssen (JNJ), Amgen (AMGN), Takeda (TAK), and Horizon (HZNP) significantly de-risk its TRiM platform as it continues to expand into additional cell types. Amgen continues to progress Olpasiran (AMG 890), its collaboration candidate with Arrowhead, with a Janssen update hopefully later in the year on JNJ-3989 for hepatitis B virus. Takeda will help co-develop and co-commercialize Arrowhead's lead candidate ARO-AAT preparing Arrowhead for independent commercialization of its wholly owned candidates while it continues to find partners for new candidates like the recently revealed ARO-XDH with Horizon.
A setback in its ARO-ENaC candidate led to a tremendous buying opportunity in the stock as that is neither the company's lead product nor a very important one in its ever growing pipeline of candidates. I used this opportunity to expand my shares from 250 shares up to 400 shares in August while purchasing additional shares in September moving up my holdings now to 410 shares. Baby steps are fine. Not every transaction has to be huge as growing over time is a great way to build wealth over time.
The Press releases are starting to come rapidly with a Janssen $10M milestone payment for JNJ1 just happening along with a Phase 2b dosing milestone for ARO-APOC3 in late September. I continue to add shares and wait patiently for the pivotal JNJ-3989 news which could change the world for Arrowhead.
6. Medtronic (MDT) Health Care device maker that I think has significant upside from COVID-19 for years to come. Hospitals will need the best equipment companies like Medtronic provide as health issues from COVID-19 could and seem poised to persist for years.
7. Eli Lilly (LLY) is a favored legacy holding that I hope to slowly add to over time and never sell. Some amazing drugs and a pipeline of potential game changing candidates can give this company real zip when good data hits. FDA approval of Biogen's (BIIB) Aduhelm for Alzheimer's opens the door for Lilly's donanemab to be approved giving this company great upside as well.
8. Pfizer (PFE): A healthcare behemoth with a big stake in the fight against COVID-19. Seems like a great potential long-term winner at a great value compared to some of its peers. Worthy of a small to regular position as a slow-moving whale of a company as COVID-19 continues to mutate.
9. Sundial Growers (SNDL) is a cannabis stock based in Canada that also gets some attention at times from the WallStreetBets crowd. A trading stock for me I try to buy when it gets around the $0.80 a share range and sell when it pops above $1.00 a share at times. They used the pandemic and crazy stock surges as a MEME stock to fix their balance sheet and have cash for the major consolidation likely coming in the cannabis industry. The U.S. also appears to continue to be on the road towards full legalization which could be a tailwind for the industry in the coming years. Might be looking to add a few shares here and there if it drops below $0.70 a share.
10. Summit Therapeutics (SMMT) did a very suspicious move in August in combining its two Phase 3 blinded pivotal trials for its ridinilazole candidate for clostridioides difficile into one study. This was doable as both studies were at ~ 50% enrollment but were apparently not enrolling fast enough for management's liking. However, in September, investors found out that this change in the study was not pre-approved by the FDA so the trial results won't be enough for the FDA moving forward although Summit should now have top line results in Q1, 2022.
Following those results, Summit and the FDA will start up talks again on the next steps depending on the data results. I am still very bullish on the candidate and the data results which means that I have used this opportunity to expand my shares in the company from 600 shares to 850 now at this time. Small steps up but data early next year will be a catalyst I will be watching very closely as I hopefully can expand my shares in the company up closer to 1000 shares in the meantime.
Sold: MiMedx (MDXG) after a near complete failure in its two late stage musculoskeletal programs. Disappointing results for not only plantar fasciitis but also its knee osteoarthritis candidates means MiMedx could be dead money for years now as it tries to recover from the company's latest setback.
Thankfully the stock had been running at 52-week highs for a while now minimizing my losses after the latest disastrous results. Bye bye extra large position and welcome additional shares of other companies like Petrobras (PBR), Arrowhead Pharmaceuticals (ARWR), Summit Therapeutics (SMMT), and World Wrestling Entertainment (WWE). Easy come easy go. Learn to drop your losers and move on. It's never the end of the world, especially if you stay diversified.
The Communication Services Sector (Aim = 15% of my Stock holdings)
Stock | $40K | $400K | $4M |
DIS | $1,840 | $18,400 | $184,000 |
WWE | $780 | $7,800 | $78,000 |
GOOGL | $900 | $9,000 | $90,000 |
% Portfolio | 12.4% |
11. Disney (DIS) will crush Netflix (NFLX) in growth over the coming decades in my opinion as its streaming platform continues to grow by leaps and bounds. Forever stock for me as I look to add cheap shares if it heads below $170.
12. World Wrestling Entertainment (WWE) is one of the few remaining live event media stocks growing globally, while always a potential takeover target from juggernauts like Disney. Its newest Peacock deal helps bring its brands into even more households. This position continues to grow as I think the company is on track to sell itself in the next couple of years hopefully for a great premium. I bought more WWE shares in August and added a few more shares in September as I continue to add shares here and there at these terrific prices. Considering its well off of recent highs of the past few years as a former ~$100 stock, I think it continues to be a great value as Covid-19 declines and the world hopefully gets back to normal.
13. Alphabet (GOOGL): One of the FAANG names producing amazing results as always in its latest earnings call. I have a lot of exposure to the FAANG names with my mutual funds, but it is hard to have too much of these juggernauts. I currently prefer it to the likes of Facebook (FB) due to privacy issues but that might just be a transitory feeling. I used my latest IRA contributions to add to this position as a forever stock.
The Financial Sector (Aim = 15% of my Stock holdings)
Stock | $40K | $400K | $4M |
GBTC | $3,370 | $33,700 | $337,000 |
HSBC | $190 | $1,900 | $19,000 |
FOA | $660 | $6,600 | $66,000 |
% Portfolio | 15.4% |
14. Bitcoin (OTC:GBTC) soared over the back part of 2020 and rallied even more to start 2021 by reaching new all-time highs around $65k a coin. In May though, Bitcoin took a nice little plunge to around half the value of its beginning of the year highs. I took this opportunity to double the shares I have in GBTC from a former 500 shares now up to 1,000 shares as my largest individual stock holding. I believe in the long-term prospects of Bitcoin and its potential usefulness which means that I am unconcerned about its value dropping by half in a month. I would not be surprised to see Bitcoin make a run towards $100k a coin late in 2021 or make a further pullback to under $20k a coin. Each seems equally likely at this point, but I have full confidence in its long-term prospects. My 1,000 shares have an average cost now of $26.06 a share, after May's double up. Ride the volatility. With decades to invest, I still sleep easily at night as it is still under 10% of my total retirement portfolio value. I would consider adding more shares at this point if Bitcoin drops to around $20,000 a coin or lower this year.
15. HSBC Bank (HSBC) is a legacy holding that might finally see some upside if the United Kingdom can ever get Brexit resolved and new trade opportunities sorted out. That of course, might be a big if.
16. Finance of America (FOA) is a value SPAC in the Financial sector that I love buying shares at under $5 a share as I value it at around $12 a share. I continue to add shares here and there as I buy and sell other positions as I think it is only a matter of time for the stock to fully recover due to the cyclicality of mortgage rates and services.
The Consumer Discretionary Sector (Aim = 6% of my Stock holdings)
Stock | $40K | $400K | $4M |
TSCO | $600 | $6,000 | $60,000 |
MELI | $330 | $3,300 | $33,000 |
ABNB | $250 | $2,500 | $25,000 |
% Portfolio | 4.3% |
17. Tractor Supply Company (TSCO) quietly continues to perform as one of the best companies in retail mostly immune to Amazon's dominance. Its acquisition of Petsense makes a lot of sense now, especially with the explosive growth of everything pet in the wake of COVID-19.
18. MercadoLibre (MELI) is Latin America's Amazon. One of the best international stocks in my portfolio that I really should add more to on pullbacks. Now that I am fully out of Alibaba (BABA) and Amazon (AMZN) I hope to be adding soon to my MercadoLibre holdings.
19. Airbnb (ABNB): Finally got to add shares of this stock as it seems to be a great potential value as Covid-19 continues to mutate. An obvious potential reopening play at a big discount from recent highs. I skipped out on the IPO as it came out too hot for my liking, so adding here and there around $140-$150 a share makes me very happy.
The Consumer Staples Sector (Aim = 6% of my Stock holdings)
Stock | $40K | $400K | $4M |
PG | $530 | $5,300 | $53,000 |
PEP | $470 | $4,700 | $47,000 |
GIS | $590 | $5,900 | $59,000 |
% Portfolio | 5.9% |
20. Procter & Gamble (PG) is a legacy holding that sports a decent growing dividend along with many best in class brands like Olay, Head & Shoulders, Dawn, and Charmin. Always nice to have some stalwarts for the upcoming recessions and depressions.
21. PepsiCo (PEP) is a phenomenal drink company with brands like Pepsi-Cola, Gatorade, and Tropicana along with amazing growth in the snack category with Frito-Lay that, in my mind, sets it apart from competitors like Coke (KO).
22. General Mills (GIS) is a legacy holding for me with a great dividend that experienced a huge turnaround during COVID-19 with its brands, including its $8B acquisition of Blue Buffalo in 2018. Its former debt concerns have mostly evaporated as it has shored up its balance sheet and continues to benefit from the stay-at-home movement.
The Industrials Sector (Aim = 6% of my Stock holdings)
| Stock | $40K | $400K | $4M | |
| J | $1,180 | $11,800 | $118,000 | |
| GSL | $1,770 | $17,700 | $177,000 | |
| % Portfolio | 10.8% |
23. Jacobs Engineering (J) is a legacy holding I have loved for years. A long-time no-debt company that makes super-smart acquisitions. It now has low-debt and has initiated a small dividend which it should be able to grow annually over the coming decades. Its focus on carbon neutrality and diversity in its workforce makes it a prime target for the younger generation. Jacobs could also experience sustained tailwinds for years if infrastructure bills become a reality under the Biden administration.
24. Global Ship Lease (GSL) is a containership company benefiting from continued crazy day rates as commodity supply issues continue to plague the world. Management continues to aggressively add ships instead of paying down debt making it a riskier play in the space as it aggressively grabs for additional market share. If containership rates continue to rise or even hold steady over the next couple of years this stock will be an amazing home run. Its potential prompted me to sell most of my other stocks in this sector as I jump in big again looking for more quick profits. I'm not afraid to sell at any time if there is a massive move in the stock or if I start to see any weakness in containership pricing though. Don't forget about its almost 5% dividend rate as well Yowza.
The Materials Sector (Aim = 6% of my Stock holdings)
Stock | $40K | $400K | $4M |
CLF | $1,310 | $13,100 | $131,000 |
PCT | $66 | $660 | $6,600 |
% Portfolio | 5.0% |
25. Cleveland-Cliffs (CLF) is an Iron Range stock that acquired AK Steel at the end of 2019 and, more recently, announced the acquisition of ArcelorMittal (NYSE:MT) in late 2020 in a deal valued at $3.3B. Cleveland-Cliffs is well on its way to becoming a fully integrated steelmaker. A bipartisan or reconciliation infrastructure bill or two later in the year could do wonders for the iron and steel markets in the coming years as they are already cashing in on amazing pricing amid high demand.
26. PureCycle Technologies (PCT) is a SPAC stock focused on a way to recycle plastic developed by Procter & Gamble. A wait and see stock like a lot of SPACs, I found interest after a Hindenburg short report eviscerated the stock. A tiny position is fine to start with patience to be expected.
The Energy Sector (Aim = 6% of my Stock holdings)
Stock | $40k | $400k | $4M |
PBR | $1,130 | $11,300 | $113,000 |
HAL | $340 | $3,400 | $34,000 |
% Portfolio | 5.4% |
27. Petrobras (PBR) is a Brazil-based oil play with lots of potential if it can get past its scandal-ridden past. Unfortunately, Brazil President Bolsonaro recently named General Joaquim Silva e Luna to replace CEO Roberto Castello Branco resulting in a huge crisis of faith in the company in its latest scandal. With that scandal now in the past, Petrobras should be able to benefit nicely from high oil prices that continue to climb. At least it is doing a great job eliminating debt which means it could be a long-term winner regardless of politics on its current course. With energy and oil prices climbing to highs not seen in years, stocks like Petrobras, with its phenomenal dividend, could result in a great portfolio boost over winter especially if the oil and natural gas market starts to get crazy. I added more shares of Petrobras again in September officially moving it up into one of my top 10 individual stock positions.
28. Halliburton (HAL) is a U.S.-based oil service company that dominates services in the North American market. Small position with no real plans to expand.
The Utility Sector (Aim = 5% of my Stock holdings)
Stock | $40K | $400K | $4M |
DUK | $480 | $4,800 | $48,000 |
NEE | $390 | $3,900 | $39,000 |
% Portfolio | 3.2% |
29. Duke Energy (DUK) Continue to buy and sell my Duke position when trade opportunities in the market arise. I find holding this company more rewarding than owning cash as its dividend and low beta are just what I'm looking for instead of owning cash.
30. NextEra Energy (NEE) is a top utility growth play with a decent dividend. A nice representative for a sector that I'm always willing to sell at the drop of a hat with Duke Energy if an opportunity in the market arises.
The Real Estate Sector (Aim = 3% of my Stock holdings)
Stock | $40K | $400K | $4M |
AMT | $820 | $8,200 | $82,000 |
% Portfolio | 3.0% |
31. American Tower (AMT) is a premier U.S. cell phone tower company aggressively expanding globally across a few more continents. 5G evolution could be a lucrative tailwind for years to come. Can't think of a reason to add another real estate play so I just plan to keep adding to this holding over time.
Bonds (2% of my Stock holdings)
This asset class is currently satisfied by my mutual fund holdings.
My top 10 Holdings and Percentage of my Portfolio
Stock | Sector | % Portfolio |
Bitcoin | Financials | 8.9% |
Apple | Info Tech | 7.5% |
Arrowhead | Health Care | 6.7% |
Disney | Communication Services | 4.9% |
Global Ship Lease | Industrials | 4.7% |
Cleveland Cliffs | Materials | 3.5% |
Jacobs Engineering | Industrials | 3.1% |
Petrobras | Energy | 3.0% |
World Wrestling | Consumer Services | 2.4% |
American Tower | REIT | 2.1% |
Total % of Portfolio | ~46.8% |
Stock Watch List: Stocks I am looking to add to my portfolio or add shares to in the coming months potentially.
Rivian (RIVN) - The price might be too expensive to warrant buying more than a few shares of this new EV company unfortunately. It is currently looking to IPO around Thanksgiving.
MercadoLibre (MELI) - With Amazon (AMZN) and Alibaba (BABA) sold, I'm looking to add more MercadoLibre shares when funds clear up from other investments as an international investment. I am aiming to try to get my international exposure back closer to 20% after selling off all of my China shares and this is one way I see to do this that appeals to me.
China Stocks - With a possible China Evergrande (EGRNF) collapse or restructure in the future I am keeping my eyes open for any opportunities this might present. This could include other China industries that sell off due to a general market collapse like Alibaba (BABA) to more likely me buying American stocks with key China exposure such as Wynn Resorts (WYNN). A big down move might not happen for sure but I'll be ready to pull the trigger if it does.
Arrowhead Pharmaceuticals (ARWR) - Will continue to add shares here at a great value in preparation for JNJ-3989 press releases and potential milestone payments.
Staying diversified across all sectors of the economy while making larger bets on your favorite stocks is a great way not only to potentially beat the market, but also have fun doing it. Stocks are one of the best ways to build wealth for retirement, and everyone should have the opportunity to share in the success of the best companies the world has to offer. Best of luck on another productive and lucrative year in 2021.
