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Update On My IRA Account

By Erik Folgate

If you haven’t noticed, the stock market has been doing very well lately. It has had a few ups and downs in the past 8 weeks, but overall, it has performed great in 2009. My IRA took a strong dive in 2008 like many others, mainly because I did not have it properly diversified. I had everything in very aggressive growth stock mutual funds in a 401(k) with my former company. Once I left that company, I rolled the money into an IRA, and since the amount was not too signficant, I decided to experiment with Exchange Traded Funds.

Here is a list of the funds I currently hold:

XLF: Financial Sector SPDR Index
IVV: iShares S&P 500 index ETF
IGE: iShares S&P North American Natural Resources
IYR: iShares Real Estate Inv. Trust
VIG: Vanguard Dividend Appreciation
VWO: Vanguard Emerging Markets
BND: Vanguard Total Bond Market

Now, here are the gains and losses for each fund since I purchased them in February of 2009. (expressed in terms of percentage)

  1. XLF: 62%
  2. IGE: 29%
  3. IYR: 25%
  4. IVV: 21%
  5. VIG: 17.75%
  6. VWO: 16%
  7. BND: (3.8%)

The total percentage gain of the portfolio thus far is 28.25%. Obviously, buying XLF has paid off nicely, and it was a big gamble, but I was pretty confident that the financial sector was highly undervalued at the beginning of 2009. I am pleased with the performance so far, and I anticipate the Dow and S&P to close close to 10,000 and 1,000 by the end of the year. Don’t quote me on that, but it’s just a gut feeling that I have. The bond market fund is simply there as a hedge against inflation. I chose the natural resources fund and real estate, because like the financial sector, they too had huge hits in 2008, and I expected them to make a recovery in 2009 and 2010.

If you have any questions for me about this portfolio, please feel free to make a comment below!

Erik Folgate
Erik and his wife, Lindzee, live in Orlando, Florida with a baby boy on the way. Erik works as an account manager for a marketing company, and considers counseling friends, family and the readers of Money Crashers his personal ministry to others. Erik became passionate about personal finance and helping others make wise financial decisions after racking up over $20k in credit card and student loan debt within the first two years of college.

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