Networth Up and Down and Up and Down

The majority of my networth today is tied up in the stock market. It is difficult to understand how much risk one should really take to reach their goals of wealth. It appears that the only way the 99% has a chance of achieving wealth and financial freedom, one must take great risk. Risk that leads to many days looking at your networth going down instead of in the positive direction.

A few months ago, my networth was $183,000, according to my Personal Capital accounts. Today, it’s $159,282, a 13% loss from the highs this year. Granted, I’ve also spent money this year and I started the year with $150,000, so I’m still “up.” But that includes all of the money I’ve put into my investment accounts so far this year as well.

Obsessing over becoming the next Warren Buffet isn’t healthy. But I also don’t believe that mutual fund advisors are better apt to succeed in the markets with my money versus investing in my own diversified strategy. The problem is that despite owning a lot of different stocks and ETFs, I’m not sure how diversified I am.

My idea for my Sharebuilder account, especially my taxable account, was that it would be my play money account vs my IRA and 401k programs, where I’d invest in time-based mutual funds. But now with over $100k in my Sharebuilder account, it doesn’t look like play money anymore.

They say don’t sell when a stock is down, but I don’t believe that either. If a stock has lost 50% it’s time to sell (it’s time to sell before that happens if you see it dropping) and put that money into something more stable. For instance, today my $4000 CBOU investment was down to under $2000. I sold 1/2 of that, giving myself $1000 in liquidity, and invested in AAPL, VZ, and KO (my first investment in Coke.) I’m concerned about investing in dividend stocks in my taxable accounts, but it seems these are the only stocks that have a shot at earning a decent interest income in the future.

I do need a better way to track my spending on investments (both in terms of principal investment and transaction fees) to understand my true gain or loss per year. None of the sites (Mint, PersonalCapital, Yodlee, etc) seem to offer this. Any ideas on how to do this more effectively? I’m sure all the information is stored in my many different accounts, but no one is surfacing to me. Sharebuilder is bad because they only show you how great you’re doing based on the account increases, removing any losses that you have sold off. So I’m “up” 33% this year, but that’s no where near true.

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2 comments

  1. Turner Vance says:

    I think Leigh is absolutely right. Vanguard’s tools are really very effective. So, you can try it. I hope you will be successful.

  2. Leigh says:

    I have all of my investments at Vanguard and they do actually track that for me, which is awesome. You can even enter in outside investments, but that would be a huge pain with the amount that you have. I really like Vanguard's tools because they don't put an emphasis on how much your shares were worth when you bought them – their emphasis is on how your overall portfolio is doing.

    I also don't look at my net worth very much. I check my checking account almost every day to make sure that there are no fishy transactions, but I hardly ever check on my investments. I do the full net worth check only on the 1st of the month since that way it always looks the same. I mean, it always goes down throughout the month as I spend money, so looking at it on the 15th means something totally different from looking at it on the 1st.

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