Weekly Update 2/20/21

Dividends

This week I received the following dividends:

  • Stag Industrial $STAG $.12 (This is the first dividend received in the Roth IRA)
  • Proctor & Gamble $PG $17.49
  • Realty Income Corp $O $30.89
  • Enterprise Prods Partners $EPD $24.09 (technically return of capital)
  • Abbvie $ABBV $32.90
  • Main Street Capital $MAIN $.13 (Roth IRA)

The total dividends received this week was $105.62. All of the dividends were reinvested.

Buys/sells

This week I opened a position in Winston Gold Corp $WGMCF. This is a penny stock and is a pure speculation play on my part. I have 160 shares at a cost basis of $.14. I added 18 shares of Realty Income Corp $O to my position. I also added 7.5 shares to my position in Vaneck Vectors Fallen Angel ETF $ANGL.

I sold out of my position in the Wisdom Tree U.S. small cap dividend ETF $DES. I also sold out of my position in the IShares core U.S. aggregate bond ETF this week. In both cases I decided my money could be better utilized elsewhere.

Options

I sold the following covered calls this week:

  • Verizon $VZ at a strike price of $58 expiring on 2/19/21 for a premium of $1.85 after fees.
  • AT&T $T at a strike price of $30.50 expiring on 2/26/21 for a premium of $4.70 after fees.
  • Altria Group $MO at a strike price of $45.50 expiring on 2/26/21 for a premium of $10.40 after fees.
  • Plains All American Pipeline $PAA at a strike price of $9 expiring on 2/19/21 for a premium of $4.70 after fees.

Total options premiums received after fees this week was $21.65 which was reinvested into the account.

Covered calls on $VZ, $MBIO, and $PAA expired out of the money. A cash secured put on $ERF expired out of the money. A covered call on $O was assigned at $60. A cash secured put on $IVR was assigned at $4.

Account Updates

The Traditional IRA finished the week at $106,552 which is down about $400 from the previous week. This includes my monthly contribution of $35. The 401k finished the week at $5,945. I forgot to include the 401k in last weeks update so I am not sure how much it is up. I tend to forget about this account. I contribute 6% of my pay every two weeks and just let it grow. The Roth IRA finished the week at $265 which is $28 better than last week although $25 of that was from my monthly contribution. The taxable growth account finished the week at 177.75 which was down $4.57 from the previous week. This account is on the M1 Finance platform. You can check it out here https://m1.finance/yhahVyq_HLoE . If you are interested in opening an account with M1 Finance my referral link is https://m1.finance/ktIiFeOI5zDr . M1 offers various promotions. The current promotion is for $30 for free after you fund your account until the end of February 2021. If you use the referral link above I will also get $30. Always check the current terms before signing up.

Wrap up

This week I again made some strategic moves to better allocate my money. I did not have a strong conviction to my positions in $AGG and $DES so I sold out of the positions and used the money to buy more $ANGL and $O. Getting 100 shares of $O called away was planned as was getting assigned 100 shares of $IVR. Part of the proceeds from $O getting called away will go towards increasing my position in $DGRO to 100 shares. The combined income from dividends and option premiums was $127.27 this week all of which were reinvested into the accounts. The wealth building continues as I am one week closer to financial freedom.

*Disclaimer – I am not a financial professional. The information shared here should not be considered financial advice. I am just a factory worker sharing my experience as I strive to achieve financial freedom. Before investing or making any financial decision do your own research and due diligence and consider seeking the advice of a financial and/or tax professional.

week update 2/13/21

Dividends

This week I received the following dividends:
  • Texas Instruments $TXN $10.33
  • British American Tobacco $BTI $10.11
  • Plains All American Pipeline $PAA $18.00 (technically return of capital instead of a dividend)

Total received for the week $38.44. All proceeds were reinvested.

Buys/Sells

This week I sold my positions in the ETFs $QQQ Invesco Nasdaq 100 fund and $FREL Fidelity Real Estate Fund. My buys this week included adding to $SCHD Schwab U.S. Dividend Fund, $DGRO iShares Core Dividend Growth Fund and $WPC W.P. Carey REIT.

Options

I sold a cash secured put on $IVR Invesco Mortgage with a strike price of $4 and expiration date of 2/19/21 receiving $23.30 in premium after fees. I sold a covered call on $SCHD Schwab U.S. Dividend Fund with a strike price of $70 and expiration date of 3/19/21 receiving $32.30 in premium after fees. The total premium received for the week wad $55.60. Covered calls on $VZ Verizon, $T AT&T, $MO Altria Group and $PAA Plains All American Pipeline expired out of the money.

Account Updates

The Traditional IRA was up this week finishing at $106,953. The Roth IRA was up as well at $237. The taxable growth account had a good week, up about 6%. You can check out the account here: https://m1.finance/yhahVyq_HLoE . This account is on M1 Finance. If you are interested in opening an account with M1 Finance my referral link is https://m1.finance/ktIiFeOI5zDr . M1 offers various promotions. The current promotion is for $30 for free after you fund your account until the end of February 2021. If you use the referral link above I will also get $30. Always check the current terms before signing up.

Wrap up

This week I made some strategic moves with my buys and sells. I was able to use the proceeds from the sells to round out my position in $SCHD which is now more than 100 shares. I plan to continue to add to $DGRO in the future to get that position up to 100 shares. Between dividends and option income I received just over $94 all of which was reinvested into the accounts. I am slowly building wealth as work toward my goal of retiring in just over 10 years.

*Disclaimer – I am not a financial professional. The information shared here should not be considered financial advice. I am just a factory worker sharing my experience as I strive to achieve financial freedom. Before investing or making any financial decision do your own research and due diligence and consider seeking the advice of a financial and/or tax professional.

Dividends or Growth?

Which investing strategy is better, dividends or growth? To be honest, I do not know. As a blue collar factory worker the dividend strategy works best for me. It fits into my mindset for making money. My time horizon is only 10 years until I quit working so generating income for retirement is a big concern for me. That is not to say that I do not like growth. I do invest some money into growth stocks. I think everyone needs to find the balance that works for them.

Approximately 93% of my invested money is in stocks, REIT’s, MLP’s, BDC’s or ETF’s that currently pay a dividend or distribution. Just over 5% of my portfolio is invested in Disney and General Motors which suspended dividends last year. Hopefully both will reinstate the dividend payments this year. My allocation is weighted heavily toward large cap value stocks. Some of the companies that fall into the large cap value area according to Fidelity are AT&T, Verizon, Coca-Cola and 3M. I like investing in reliable, stable companies that I am fairly confident will continue to pay me a dividend into the future. Below, you can see how my allocation matches up to the Dow Jones Index.

While I am skewed heavily toward value, I do have some growth. Microsoft accounts for just over 5% of my invested money. Visa accounts for approximately 3.25% of my investments. A big part of the reason I am heavily invested in value stocks is I tend to understand those companies better. I have a better understanding of Coca-Cola than I do of Nvidia. I am sure that my age and my background as a factory worker contribute to my investment strategy. I do understand the importance of having growth stocks in my portfolio. This is why I set up the account in M1 Finance in which I mainly invest in the same companies as the Ark Invest Funds. You can see my portfolio here: https://m1.finance/enQz4omNnspo . If you are interested in opening an account with M1 Finance my referral link is https://m1.finance/ktIiFeOI5zDr . M1 offers various promotions. The current promotion is for $30 for free after you fund your account until the end of February 2021. If you use the referral link above I will also get $30. Always check the current terms before signing up.

One thing I do know is that each individual needs to develop their own investing strategy that works for them. Each person should consider their time horizon, risk tolerance, time commitment and other factors when developing their investing strategy. I have found a strategy that I am comfortable with and is working for me. As time goes on I will continue to adapt and evolve my strategy in order to meet my goals. Your investing strategy does not have to be only dividends or only growth. It is not an either or decision. It can be a blend of both. The most important thing is that you find a strategy that is comfortable for you.

*Disclaimer – I am not a financial professional. The information shared here should not be considered financial advice. I am just a factory worker sharing my experience as I strive to achieve financial freedom. Before investing or making any financial decision do your own research and due diligence and consider seeking the advice of a financial and/or tax professional.

Biggest Gainers

Today we are going to take a look at my biggest gainers since I started investing in March of 2020. The criteria I will use is the highest gains based on dollar amount.

#10 – Brookfield Renewable Partners (BEP) is up $617. This is a 75.6% increase on my investment. Brookfield Renewable operates one of the world’s largest publicly traded, pure-play renewable power platforms. BEP’s portfolio consists of hydroelectric, wind, solar and storage facilities in North America, South America, Europe and Asia, and totals approximately 19,000 megawatts of installed capacity and an approximately 23,000 megawatt development pipeline. I first purchased BEP on 6/8/20 and then slowly continued to add to it since including reinvesting dividends.

#9 – AbbVie (ABBV) is up $632 which is a 29.83% increase on my investment. AbbVie Inc. discovers, develops, manufactures, and sells pharmaceuticals in the United States, Japan, Germany, Canada, France, Spain, Italy, the Netherlands, the United Kingdom, Brazil, and internationally. I purchased shares of ABBV on 4/29/20 and continued to buy during the year. I also reinvest the dividends.

#8 – CVS Health (CVS) is up $726 which is a 24.52% increase on my investment. CVS Health Corporation provides health services and plans in the United States. The three main business segments are pharmacy services, retail and health care benefits. This is one of the first stocks that I ever bought. The first purchase was 3/24/20 and then added more throughout the year. I continue to reinvest the dividends.

#7 – 3M (MMM) is up $765 which is a 28.38% increase on my investment. 3M Company develops, manufactures, and markets various products worldwide. It operates through four business segments: Safety and Industrial, Transportation and Electronics, Health Care, and Consumer. My first purchase was on 3/25/20 and I continued to add to this position over the course of the year as well as reinvesting dividends.

#6 – Johnson & Johnson (JNJ) is up $768 which is a 25.25% increase on my investment. Johnson & Johnson researches and develops, manufactures, and sells various products in the health care field worldwide. It operates in three segments: Consumer, Pharmaceutical, and Medical Devices. The first purchase that I made was on 3/24/20 and I continued to add to it through out the year as well as reinvesting dividends.

#5 – DTE Energy (DTE) is up $890 which is a 55.27% increase on my investment. DTE Energy ( DTE ) is a Detroit-based diversified energy company involved in the development and management of energy-related businesses and services nationwide. Its operating units include an electric company serving 2.2 million customers in Southeast Michigan and a natural gas company serving 1.3 million customers in Michigan. I purchased this stock on 3/24/20 and did not buy more. I have been reinvesting the dividends.

#4 – Broadcom (AVGO) is up $1,080 which is a 82.03% increase on my investment. Broadcom Inc. ( AVGO) is a Delaware corporation headquartered in San Jose, CA, is a global technology leader that designs, develops and supplies a broad range of semiconductor and infrastructure software solutions. I purchased this stock between 4/29/20 and 5/15/20 and continue to reinvest dividends.

#3 – Lowes (LOW) is up $1,352 which is a 103.5% increase on my investment. Lowe’s Companies ( LOW), Inc. is a FORTUNEĀ® 50 home improvement company serving approximately 18 million customers a week in the United States and Canada. The initial purchase was on 4/6/20 and then I reinvest the dividends each quarter.

#2 – Microsoft (MSFT) is up $1,674 which is a 38.02% increase on my investment. Microsoft Corporation develops, licenses, and supports software, services, devices, and solutions worldwide. I purchased MSFT between 4/21/20 and 5/27/20. I was not reinvesting the dividends but will be in the future.

#1 – Walt Disney (DIS) is up $2,147 which is 90.15% increase on my investment. The Walt Disney Company, together with its subsidiaries, operates as an entertainment company worldwide. I purchased my shares of Disney on 3/24/20 and 4/21/20. Unfortunately, Disney suspended its dividend. I hope that the dividend will be reinstated in the future.

Overall I am satisfied with the performance of these stocks as well as my entire account. I plan to continue to invest in the quality companies listed above as well as many other quality companies.

*Disclaimer – I am not a financial professional. The information shared here should not be considered financial advice. I am just a factory worker sharing my experience as I strive to achieve financial freedom. Before investing or making any financial decision do your own research/due diligence and consider seeking the advice of a financial and/or tax professional.

January 2021 Update

January was a busy month. We have seen political unrest, a new administration inaugurated, the pandemic raged on even as vaccines were rolled out, retail investors taking on hedge funds and the stock market ended the month lower. Despite all of this going on this month I was able to stay calm and stick to my plan. So, another month has gone by so it is time for another update on my progress to financial freedom.

My spending this month was kept in check. My savings actually increase by about $800 this month due in part to I was able to spend less than expected. I plan to take some of this increased saving and use it to pay down debt next month.

This month I received $196.82 in dividends. Last January I received $.01 in dividends. This is a little misleading because the majority of retirement savings was not invested last January because I had to wait on the rollover of my retirement funds from a previous employer. The option premiums I received this month were $395.95. Last January I did not trade options. The combined total of dividends and option premiums was $592.77 which was reinvested into my IRA. This total was well below my goal of $1,000 a month in combined income from dividends and option premiums. I expected that I would miss my goal this month and the first few months of the year. As I reinvest this money I should be able to grow the amount of dividends and options premium I receive. I hope to make up for these shortfalls in the beginning of the year at the end of the year.

This month was a very good month in paying down debt. My total debt, including the mortgage, was $146,380 at the start of the month. At the end of the month it is $143,098. The total debt paid down this month was $3,282. My goal for the year is to pay down $25,000 in debt which works out to about $2,083 per month. So far I am off the a great start and well ahead of the pace in order to meet my goal.

My Traditional IRA wound up down about $1,000 for the month in overall value. My estimated annual income from dividends did increase from about $3,400 to almost $3,600. The annual income number is what I focus on. This is the number that will determine when I can retire. The overall value of the account will take care of itself over time.

The Roth IRA lost a couple of dollars this month. The estimated annual income from dividends is $9.

The 401k shows an increase in overall value but that was due to contributions. The rate of return for the month was negative. This account is mainly to preserve capital which it did. The S&P 500 was down about 1% for the month but my 401k was only down 0.15%.

The growth account did fairly well this month considering the sell off in the stock market at the end of the month.

You can see all of the holdings in this account here: https://m1.finance/yhahVyq_HLoE . This account is on M1 Finance. If you are interested in opening an account with M1 Finance my referral link is https://m1.finance/ktIiFeOI5zDr . M1 offers various promotions. The current promotion is for $30 for free after you fund your account until the end of February 2021. If you use the referral link above I will also get $30. Always check the current terms before signing up.

Overall I am happy with the results of the first month of the year. My debt is down. My net worth increased by about $3,000 to just over $19,000. While the overall value of my retirement accounts went down the cash flow increased which is the most important thing. Another month of staying on budget, paying down debt, saving and investing moves me closer to my ultimate goal of financial freedom.

Short Squeeze? Market Volatility?

This week has been an interesting week in the stock market. Retail investors took on hedge fund managers, reddit vs. Wall Street. Many companies reported earnings this week. Companies such as Facebook and Apple reported strong earnings but seen the share price drop. Overall, the stock market was down this week. What does all of this mean?

The big news this week was the David vs Goliath story in which members of the subreddit r/wallstreetbets took on hedge funds and forced a short squeeze. Essentially, people on r/wallstreetbets noticed that there was a lot of short interest in several stocks especially GameStop. People started buying the stocks and options which caused the price of the stocks to skyrocket. This created a short squeeze for some hedge funds. Billions of dollars were lost by hedge funds. At one point, some brokerages such as Robinhood halted and/or limited trading on stocks such as GameStop. Some viewed this as the brokerages helping out the hedge funds and hurting the retail investors. Personally, I did not participate in any of this. I think it is neat that a group of retail investors were able to take on hedge fund managers and beat them at their own game. I do not like brokerages halting or limiting trading on certain stocks. Overall, I am not sure that there are any true winners in this situation. Some people are going to make a lot of money by buying low and selling high on some of these stocks. Some people, especially those who got in after the stock prices already ran up could lose a lot of money if they do not get out before the price comes tumbling back down which it will eventually. This is some risky investing by both the retail investors and the hedge funds. In my opinion, this is more like gambling than investing. I do set a very small portion of funds aside for speculation plays but I prefer to invest in fundamentals rather than gambling. It will be interesting to see how this all plays out.

In the short term, the stock market can go up or down with little rhyme or reason. We can see companies report strong earnings yet the stock price falls. Companies that appear heading toward bankruptcy can see the stock price shoot up. I firmly believe that over longer periods of time the stock market will go up. All of this volatility in the market this past week had little effect on me. Sure, my overall portfolio value dropped when the market dropped. Did I panic? No. Instead, I stuck to my plan. On Friday I noticed that a dividend ETF that I hold, SCHD, dropped below my cost basis so I bought 17 more shares to lower my cost basis and increase my cash flow. Since I am first and foremost a dividend investor I worry more about how much cashflow I can create rather than the overall value of my account. When the price of shares of dividend stocks that are part of my plan drop I see it as a buying opportunity and a chance to increase my cash flow.

Having a plan helps me navigate through the turbulent times in market. I hope those who are in on the short squeeze have a plan. Congratulations to all who have profited this week on stocks such as GameStop but also be aware of how much risk you taking on. As far as volatility in the stock market goes, I welcome it. Volatility creates opportunities. Because I have plan in place I do not panic when the market drops. Instead, I execute my plan to take advantage of the opportunities that are presented by volatility.

*Disclaimer – I am not a financial professional. The information shared here should not be considered financial advice. I am just a factory worker sharing my experience as I strive to achieve financial freedom. Before investing or making any financial decision do your own research/due diligence and consider seeking the advice of a financial and/or tax professional.

Keys to my success

A little over a year ago I decided to take charge of my financial life. Over the past year the progress I have made in my personal finances has been much better than expected. I have identified three things, besides luck, that have greatly contributed to my success: creating a budget, automating savings and diversifying my savings.

First and foremost creating a budget set me on the path to success with my personal finances. Prior to creating a budget I essentially just spent money without much thought. Sometimes I would have extra money at the end of the month and put it into savings. Often, the next month I would have to take money out of savings to pay bills or make an unnecessary purchase just because I had “extra” money. The savings would pretty much remain stagnant and not grow. Once I created a budget and planned where each dollar was going to go I was able to begin growing my savings. Each month I allocate money to savings and investing in the same manner as I allocate money to pay bills. This has helped me to increase my savings and investing.

Automating my savings and investing is an important factor in the success of my personal finances. Each month I have money automatically transferred from my main bank account to my various savings and investing accounts. This works great because it I do not have to make a decision on whether to save and how much to save. These decisions were already made when I made my budget. Setting up my savings and investing on a automatic schedule allows me to save and invest without any effort on my part.

Diversifying my savings has also contributed to my success. I have multiple bank accounts. Each account serves a purpose. I have a checking account that my paycheck is deposited into. I pay certain bills with this account and distribute money from this account to other accounts. At the same bank I have a savings account that is strictly for emergencies. I have a checking account at a local credit union that is used to pay selected bills and is used as a pseudo-savings account because it has a 4% interest rate. I also having a savings account at the credit union which I use for saving for expenses such as Christmas or vacations. I also have a high yield savings account with an online bank. This account is used to save money for a new car. It will be at least three to five years or more before I buy a new car but I want to start saving now since cars aren’t cheap. Essentially I have created a bucket system. This works much better for me than just having a general savings account. Before I would see that I had extra money in the bank which made it easier to justify splurging on some new item that I did not necessarily need. Now, with the bucket system in place I know why the money is in each account and makes it less likely that I will make a frivolous purchase.

For me, creating a budget, automating savings and diversifying my savings has done wonders for my finances. Having a plan, such as a budget, is important for my success. Automating the contributions to savings makes it much easier for me to stick to my savings plan. Diversifying my savings into buckets makes it easy for me to keep track of how I am doing on my savings goal such as saving for a new car. Creating this system has made it much easier to save and grow my savings over time.

401k Breakdown

A 401k can be a great way to save for retirement. The money can be automatically taken from your check and invested before you even see it. Automating investing is a very helpful way to keep on track with your investing goals. There are tax benefits to investing in a 401k. Putting money into a 401k allows you to defer taxes until you pull money out of the account. If you invest in a Roth 401k you pay taxes upfront but do not pay taxes when you pull money out of the account. If your company offers a match to your contributions this is great! This is free money and a guaranteed return. Part of my plan to achieve financial independence is investing in the 401k plan offered by my company.

I invest pretax dollars into a regular 401k which is automatically taken out of my pay each payday. My company does offer a small match to contributions. In my opinion, the options for investing in my 401k are not that great. It has a limited number of funds that are available. Because of this I have set it up fairly conservative in order to preserve capital.

As you can see in the image above, I have a high concentration in bonds. The bond section is made up of three funds: a total bond market fund, a world bond fund and a high yield bond fund. The next highest allocation is to small/mid/specialty. This section is made up of four funds: a mid cap index fund, a commodity fund, a real estate fund and a small cap growth fund. The third highest allocation is to large cap value which is a S&P 500 index fund. Next is the global/international allocation which a total international stock market index fund. Rounding out the allocations is a balanced fund.

At the time of writing this my 401k makes up less than 5% of my retirement savings. Because of my current circumstances, I am only investing 6.5% of my annual income into my 401k. Once I pay off my debts and get to a point that I can fully fund my IRAs I will increase the amount that I contribute to my 401k. Right now, the 401k is pretty much on auto pilot. I continue to automatically contribute each pay day and collect the employer match. I check in on the account every month to see where it is at but do not actively manage it. This is a set it and forget it account for me. When I retire in a little over ten years I will likely roll this account over into my IRA so that I can invest the money into stocks that pay dividends. Until that time, I will continue to contribute and watch it grow.

*Disclaimer – I am not a financial professional. The information shared here should not be considered financial advice. I am just a factory worker sharing my experience as I strive to achieve financial freedom. Before investing or making any financial decision do your own research and due diligence and consider seeking the advice of a financial and/or tax professional.

How I learned (and continue to learn) about personal finance and investing

When I started my journey to financial freedom a little over a year ago I sought several resources to help educate myself in the areas of personal finance and investing. Some of the resources I turned to included books, websites and You Tube videos.

At first I was mainly interested in getting my debt under control. I stumbled upon Dave Ramsey early on. I watched many of his videos on You Tube and read his book Total Money Makeover. I really like Dave’s common sense approach to personal finance. His system, The Baby Steps, is a really simple system to follow. He does a great job of getting people motivated to charge of their finances and provides an easy to follow path to financial success. I also enjoyed watching Ramsey personality Chris Hogan. He is very motivational and gets people fired up. While I understand that Dave’s way is effective and produces results, I am not a strict follower of the baby steps. His take on debt management is great and has helped many people. I personally think that his take on investing is rather simplistic and not for me. I have taken bits and pieces of Dave’s teachings and incorporated those into my own personal finance plan. Dave Ramsey and other Ramsey personalities were very helpful to get me motivated in the first few months of taking charge of my finances but I have since moved on to other sources.

I have read several books on budgeting, personal finance and investing in addition to Dave Ramsey’s Total Money Makeover mentioned above. A couple that stood out on investing are Phil Town’s Rule #1 and Danielle Town’s Invested. These books offered a way to evaluate companies. While I do not completely agree with Phil’s view on investing I did learn a lot about investing from these books. I have read other books on debt management, personal finance and investing. I have not found one system for me. Instead I take bits and pieces from each and incorporate it into my own personal finance strategy.

I also watch a lot of You Tube videos. Currently, there are a lot of You Tube videos in the personal finance/investing area. It can be hard to sift through all of the content that is out there. I have a few that stand to me. Some of the channels I routinely watch include Joseph Carlson, Independent Investor, ppcian, MattMoney, Passive Income Investor, Passive Income Educator, Learn to Invest, JMac Investing, Hidden Freedom Investing, GW ETF channel and GenEx Dividend Investor. Each of these channels offers a little something different. I have incorporated some of the things I have learned from watching these channels into my own personal finance journey.

From my perspective, I view personal finance and investing as very personal. I do not believe there is a one size fits all system for personal finance and investing. In my opinion, each individual should develop their own strategy based upon their own personal goals. Some things to consider when developing a strategy include time horizon (when do you want to be financially independent), risk tolerance, comfort level with investing and time commitment to investing. Someone who has 40 years until retirement is likely to invest differently someone who only has 10 years. Some people are okay with the volatility in the market and don’t mind big swings in their accounts while others are not. Some are comfortable picking individual stocks while others are comfortable with index funds. Some may be willing to spend hours a month researching stocks while others may not. Over the past year I have been developing a strategy that works for me. This strategy continues to evolve as I learn more about personal finance and investing. I expect that my strategy will always continue to evolve and adapt as I move along in life. In the end, we all need to find what works for us.

Investing in ARK Funds

ARK Invest, led by Cathie Wood, offers several exchange traded funds with the focus on disruptive innovation. The five actively managed ARK funds have had amazing returns recently. The following is the returns for the actively managed ETFs for 1 year as of November 30, 2020:

-ARK Innovation ETF (ARKK) 123%

-Autonomous Technology and Robotics ETF (ARKQ) 97%

-Next Generation Internet ETF (ARKW) 142%

-Genomic Revolution ETF (ARKG) 141%

-ARK Fintech Innovation ETF (ARKF) 97%

These returns are absolutely amazing especially considering the S&P 500 returned about 17% during the same time period. The returns that the ARK funds provide do come at a price. Because these are actively managed funds the expense ratio is rather high at around 0.75%. For many investors the expense ratio is worth it to pay others to actively manage the funds so they can remain passive. Despite the high expense ratio the ARK funds look to be a great investment.

I have decided to take a different approach to investing in the ARK funds. I took a look at the top 10 holdings in each of the five ARK funds listed above. Some of the funds have some overlap in companies. In all I invested in 30+ companies that the ARK funds invest in. I also added a couple of other companies that I expect to grow fairly rapidly over the next few years. You can see all of the holdings here: https://m1.finance/yhahVyq_HLoE . I chose M1 Finance for this account because of the user interface. I created a pie and decided the percentage of the portfolio for each holding. As I add money to the account M1 Finance will dynamically rebalance the account by buying the holdings that are underweight based my settings. If you are interested in opening an account with M1 Finance here is my referral link: https://m1.finance/ktIiFeOI5zDr . M1 Finance offers promotions for referrals. At the time of this writing, M1 is offering $30 if you use the referral link and fund your new account. I would also receive $30. M1 does change its promotions often so please read the terms before opening an account.

The approach I am taking is rather risky which is why I am only investing a small amount into this account. The wise move would probably be to invest in the ARK funds directly. The first week has gone well as illustrated in the picture above I have returned almost 12%. I will continue to provide regular updates on how this account is performing over time.

*Disclaimer – I am not a financial professional. The information shared here should not be considered financial advice. I am just a factory worker sharing my experience as I strive to achieve financial freedom. Before investing or making any financial decision do your own research and due diligence and consider seeking the advice of a financial and/or tax professional.