A few months ago, I decided to transfer a portion of my Roth IRA from TD Ameritrade to M1 Finance. To some extent, I wanted to take advantage of a $100 transfer rewards bonus. But mainly, I just love M1’s fractional share investing platform. The $100 transfer bonus, of course, was lovely.
I’ve been using M1 Finance investing for my taxable account since August 2019. To see how that portfolio is doing, check out my monthly M1 Finance portfolio updates.
In this new blog series, I will be chronicling my M1 Finance Roth IRA investment journey. In this account, I use a strategy called focus investing.
MY ROTH IRA TRANSFER
On June 29, 2020, I transferred $57,475.37 worth of securities and cash to M1 Finance. These are the holdings I moved.
Since then, I sold all of my GOOGL, XLNX, and HAWX and added Facebook (FB), Pinterest (PINS), and NVIDIA (NVDA).
Here is a snapshot of my current 16 holdings as of July 31, 2020, after market close. The total balance is $62,283.30.
My cumulative return is 14.86% from my cost basis of $54,226.06. The cost basis transferred over from TD Ameritrade. Keep in mind that my Roth IRA all-time return is much higher. However, the portfolio only accounts for the cost basis of the stocks that transferred over. It doesn’t account for my principal deposits over the years.
My money-weighted all-time return is 6.90%.
In this account, I’m holding 17.0% fixed income in the form of Vanguard Total Bond Market ETF. Although it’s not as stable as cash, I view this bond ETF as a cash equivalent. In good times, I plan to hold approximately 20% cash equivalents. When the stock market hits a road bump, in the form of a bear market (20 % decline of the S&P 500), I’ll start deploying the cash and buying more stocks.
Here is a list of all of my holdings with their actual and target portfolio weights.
My Social Media M1 Pie consists of a 50% target on both Facebook and Pinterest. Both companies are members of our Stock of the Month.
I don’t plan on withdrawing from my Roth IRA for at least ten years, so I’m going to be fairly aggressive with my investments. If I knew that I needed the money in less than ten years, I’d probably keep a minimum of 50% of my portfolio in cash equivalents at all times.
In this Roth IRA portfolio, I don’t plan on giving frequent updates as I do for my M1 Finance taxable account portfolio. For this portfolio, I only plan on providing updates if something significant happens. These are some events that I consider meaningful.
- My account increases or decreases $10,000.
- The stock market (S&P 500) goes into a bear market.
- The stock market makes new highs coming out of a bear market.
- I sell out of a holding completely.
- I add a new holding to the portfolio.
So what do you think about M1 Finance and my Roth IRA portfolio? Leave me a comment and share this post on your favorite social media site. Stay tuned for my next M1 Roth IRA update. If things go well, I’ll be providing an update when my account reaches $70,000.
I/we own shares of all of the stocks depicted in the portfolios except for GOOGL, XLNX, and HAWX as mentioned above.
Except for Wolves of Investing, I/we are not receiving any compensation from and do not have any business dealings with any companies whose stocks are discussed in this article.
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Donnie Nguyen is the founder and CEO of Wolves of Investing. He started investing in the stock market in the early 2000s. He follows the teachings of Peter Lynch, Warren Buffett, and other investing legends. When he's not investing or blogging, he loves spending time with his family traveling and experiencing the world.
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