Last weeks post was my final post for the year on net worth progress report for AVI family. In my final article for the year, I am going to take a deep dive into growth and returns for my investment-portfolio, both retirement and non-retirement. This article is a follow up on the Asset Distribution blog post wherein I took a deep dive into the various assets present in my investment portfolio.

As I am writing this, I sure am thankful that I am actually able to put pen to paper. Over the long holiday break, I decided to get my wisdom teeth pulled out. It was a long due surgery and now was as good a  time as ever. I was anticipating a couple of days of nightmare followed by a week of painful recovery. However, I am glad that, on this day, the fourth post surgery, things are looking much better for me to the point that in the whole day, I have not taken a single pain medication.

Musing

For the past few days I have been compiling list of books that I want to read in the coming year. My goal is to read at least 6 books for the year, including 2 fiction books. Here’s what I have come up with thus far, in no particular order

• The greatest trade ever: The behind-the-scenes Story of How John Paulson Defied Wall Street and Made Financial History, by Gregory Zuckerman. I love reading books on economic history. The first book listed here is by Gregory Zuckerman, who has a knack for weaving complex finance jargon into a gripping fast paced investment story. The present book is about a contrarian outsider, John Paulson, who, by betting on housing market collapse in 2008, emerged on the other side of one of the biggest financial debacle of recent times with a 9 figure payout.
• Against the Gods: The Remarkable Story of Risk by Peter Bernstein, The book review by Graham Seibert on Amazon.com says it all. This book is a tome on mans eternal quest from ages bygone to modern times to understand risk and probability. I would consider myself proud if I can get through this book by end of 2020 and retain in memory atleast 1/10th of material presented in the book.
• Devil Take the Hindmost: A History of Financial Speculation by Edward Chancellor: Yet another book on financial history focusing on stock market speculation from 17th century to present day.
• Seeking Wisdom: From Darwin to Munger, by Peter Bevelin: Yet another dense book on multidisciplinary learning approach that spans ideas from biology to economics to human behavior. Its primarily a book on human behavior and judgements.
• The Man Who Solved the Market, How Jim Simons Launched the Quant Revolution by Gregory Zukerman: This is yet another gripping and fast paced book by Gregory Zukerman covering the life’s work of Jim Simons, who started the Hedge Fund, Reniassance Technologies, in 1982, the first  fund of its type that specialized in quantitative trading. Reniassance has the best and unbeaten track record of returning 66 percent before fees and 39 percent after fees on average per year for a 30 year period spanning 1988 to 20018.
• Margin of Safety, Risk Averse Value Investing Strategies for Thoughtful Investors, by Seth A. Klarman: If only I can lay my hands on this book. This out of print book by yet another legendary investor, Seth A. Klarman, is currently selling on Amazon for $1350.99.
• Exhalation by Ted Chaiang: This is the first fiction book on my list. It is on the New York times best 10 fiction books of the year. According to New York Times, “Many of the nine deeply beautiful stories in this collection explore the material consequences of time travel. Reading them feels like sitting at dinner with a friend who explains scientific theory to you without an ounce of condescension.” Cannot wait to get my hands on the book.
• Night boat to Tangier by Kevin Barry: This one is also picked from New York Times best 10 books of the year. I just loved the title of the book.. will give it a whirl and find out!

Portfolio Growth 2019

The Table provides summary of my entire investment portfolio across various retirement and non-retirement accounts.

Investment Account		02/24/2019 (Percent of FI)	12/24/2019 (Percent of FI)	Cash/Equity Addition (Percent of FI)	Percent Growth in 2019
Retirement	Active IRA	5.85 %	6.66 %	0	13.85 %
	Spouse Roth IRA	2.2 %	2.16 %	-0.21 %	-1.82 %
	Passive Roth IRA	4.17 %	4.35 %	-0.19 %	4.32 %
	Passive IRA	3.33 %	3.69 %	0	10.81 %
	401K- Current Employer	0.27 %	1.33 %	0.93 %	329 %
Non Retirement	Active	10.47 %	13.67 %	-0.28 %	30.56 %
	Passive	2.82 %	3.53 %	1.15 %	25.18 %
	Robo Advisor	1.29 %	1.43 %	0.24 %	10.85 %
	Kiddo	0.5 %	0.94 %	0.148 %	88 %
	Employer-Stock Equity	1.29 %	5.5 %	4.63 %	326 %

• The two big growth numbers are from my employer sponsored accounts, 401K and equity compensation. I maxed out on my 401 K contributions for the year, $19K, which allowed me to also benefit from maximum employer matching contributions.
• The biggest contributor by far, to my portfolio, was the equity compensation from my employer, netting a total contribution of greater than 4.5 % of AVI family FI number.
• At the start of 2019 I contributed to self and spousal Roth-IRA accounts. However, as it turns out, our family income for the 2018-tax year was over the limit for Roth contribution. I therefore had to withdraw the excess contributions in our Roth accounts, resulting a net cash outflow from these accounts.
• On the non-retirement side of my portfolio, through the year, I was actively contributing cash to our passive AppliedValue (AV) Portfolio. It was increasingly difficult for me to deploy significant amounts of cash in the markets, pushing me to go passive-diversified.
• My investment in robo-advisor serves as a reference point for me to compare my performance relative to a theoretically optimal portfolio that is tax optimized. I make a annual one time contribution to this account, and it remains truly passive with no further action in the account from my end.
•  I had a net drain of cash from my most-actively managed non-retirement portfolio. Even then the account saw a growth of over 30 %. A clear sign of how well the markets have done overall, and specifically, my equity investments.
• Kiddo account saw a marginal cash contribution coupled with a significant growth in the net account value. My investments in kiddo account are long-term holds (AAPL, DIS and such) that I intend to transfer over to kids when they are eligible.

Overall, 2019 was a very light year from cash inflow perspective, which was reflected in the significant growth in cash portion of AVI family assets (see my article on net worth progress report for 2019).

Also, this year, the time spend actively managing a portion of my portfolio has been quite rewarding. No one knows when there will be a market correction,  but with 2019 in the hindsight, I feel I am am better equipped to deploy the accumulated cash to work when the correction does happen.

Active Brokerage Activity 2019