I’m overdue for a post and I’d like to get an update out on Baby AAI’s portfolio to see how it’s performing.
With Baby AAI recently turning 3, It’s time to check in on his portfolio and see what’s happening.
Baby AAI still has no idea he has a portfolio and I can’t wait to teach him about stocks. There’s plenty of time for his portfolio to grow.
I funded Baby AAI’s account with an initial $7500 in a taxable account and have been contributing $100/week since 02/27/17, so we’re almost at the 3-year mark.
The last update was the 2-year update that can be found here.
I’ve added two new positions since the last update. One was AAPL and the other was VOO. I purchased 10 shares of Apple on 06/03/19 for $173.73/share and it’s currently up 62% from purchase price. I also added 26 shares of RDS.B and purchased 1 share of VOO which is an S&P 500 index fund.
Below is the current portfolio after nearly 3 years. Stocks range from a 62% gain in AAPL to a 28% loss in HBI. I’m also not dripping any more shares and just collecting dividends to add to the fresh capital. With commissions at $0 per trade I can buy a share at a time if I wish. That’s exactly what I did when I added 1 share of VOO.
CVS was purchased in April and is up 40%. This year’s purchases have been great with the exception of Royal Dutch Shell. I do like the company long-term and believe the price will recover with oil prices.
I currently have a little over $1700 in cash in the account just waiting for a new purchase. The last update valued the account at $21,099. With cash added the current account value is $26, 898.00.
So let’s see how we’re doing now against the original projections, which assume 7% compounding.
I’m hoping to achieve a 7% CAGR which will put the balance right at $200,000 by the time he’s 18. That’s by doing nothing else but contributing $100/week and letting the power of compounding work its magic. I used a simplified actuarial formula assuming $7500 contributed right away and $5200 ($100/week) contributed at the end of each year.
This is a graph of what the value should be at the end of each year, of course the stock market has large swings up and down so this is in a perfect world of 7% compounding each year.
So basically, by the end of the third year, February 27, 2020, the portfolio should be valued at $25,905. It’s near the end of December 2019 and we are ahead of pace with a portfolio valued at $26,898.
I can’t wait to watch this portfolio grow! I’m still sitting on about $1700 in cash and will be watching and waiting for another opportunity.
I’d love suggestions on a next purchase for BabyAAI.