They say time flies when you are having fun and man have they ever been right over the past year. 2019 has come and gone and with the passing days the market has been climbing and climbing to levels that have never been seen before. Those that are invested have been reaping the rewards while those that are sitting out because “the market is too high” have been getting left in the dust. If you have kept up at all with my blog over the last year you will know that I have sat somewhere in the middle and while being on the fence a lot of times is a bad thing, for me, it seems like just the right place.

Before we get into the exact moves that I made during 2019 let’s go ahead and take a look at the fourth quarter and full year results my portfolio.

The Results

My portfolio again grew in the fourth quarter of 2019, ending up with a 3.05% gain. This was under the S&P 500 which exploded up 8.55%, as always I am not contending soley with the index fund, but it is fun to compare! For the full year 2019, the 2k Portfolio gained 19.9% in comparison to the S&P’s outrageous 30% gain!

Am I pleased with a ~20% gain for the full year? You bet ya! Do I wish it was 30%? Sure, but I follow a certain plan and investing strategy that I have to continue to trust and know that you won’t always beat the market but creating consistent compounding growth to my account is key. Add this to the constant learning process of investing and I continue to love handling my own money in this fashion.

2019 Details

So 2019 was an interesting year for me with a lot of moving parts that created some faux losses and hindered my gains. First off I changed my brokers, moving all of my holdings from Robinhood (that I still love for beginners) to SoFi. Most of you probably know SoFi through their student loan financing (something that I do not have, thank God), but they have recently come out with a very nice wealth site and app. This app is a great place where I can hold a savings account that currently draws about 1.6% interest, do all my investing, and perform actions like create an IRA, savings vaults, etc. This isn’t a SoFi review though so let’s move on.

The movement of my investments was made early in the year and due to the market’s high valuation, I decided to move the investments to cash before I made the transfer. This means that I did have to pay capital gains so that obviously hurt the fund, and I missed out on much of the gain party as I sat in 100% cash for a small bit.

The investing began slowly, with my first purchases from selling out in April not happening until August. This is a large time period to be out of the market that I do not suggest for anyone! After the substantial time out my purchases began again and I focused on the unloved, undervalued companies that inhabited the underbelly of the markets. This led me to investments in Turtle Beach (HEAR), VAALCO Energy (EGY), GrafTech International (EAF), and finally my beloved Cleveland-Cliffs Inc. (CLF). All of these companies I judged were sitting well below their reasonable valuations.

After moving into those companies I began to look into some other undervalued positions that were in sectors or markets that also weren’t receiving much love. This led me to China’s HollySys Automation Technologies (HOLI), Prudential Financial Inc. (PRU), BP plc (BP), and PacWest Bancorp (PACW). All of these companies not only added to my undervalued strategy but also pay me nicely as I wait for the market to wise up.

Finally my last position became one that is very different from the others, Virgin Galactic Holdings Inc.(SPCE). Investing in a company that isn’t profitable, or even made a profit ever, is something that is new for me but the valuation that I bought shares at left me at a spot where I believe the risk/reward is advantageous. Richard Branson is a business man that I believe in and Virgin Galactic’s market is one that could end up being unfathomable. This is less about space tourism in my eyes as it is about how SPCE’s technology will extend to other sectors.

2020 and on…

Moving forward into the next year and beyond there are a couple things that I will begin again. First I will be deploying capital every two weeks into new or existing positions, wherever I see undervaluation. Second, I will be targeting my passive dividend income (where it seems advantageous) so that the portfolio continues to build sustainable income even in a market downturn. Finally I will again be posting more consistently as I perform long term investments and reach towards financial freedom.