Posted by For the month of December, the DOW gained 1444 points. That was a 13.74% gain for the year compared to a 9.4% loss in 2022. Interest and dividend income was $5,860 for the month. The monthly average in 2023 was $2470. Withdrawals for living expenses came to $1,210 for December. In 2023 my investments are up by 9.44% compared to a loss of 11% in 2022. This puts my portfolio balance down by $32,000 from the peak level at the end of 2021. My only trades for the month were buying 200 shares of Fidelity Consumer Staples Index ETF (FSTA), selling 100 shares of Amplify High Income ETF (YYY) and 100 shares of US Bankcorp (USB).
Overall, I was happy to see the stock market recover in the last two months of the year. This was mainly due to the anticipated lowering of interest rates sometime in 2024. My non-IRA interest and dividend income is still below what I need for my monthly expenses. To make up the difference, I am taking $300 from my IRA each month. My full retirement age for social security is 5 years (2029) from now. I could apply this year, but my benefit would be reduced by 30%. At age 64 the amount is reduced by 20% and at age 65 1/2 the amount is reduced by 10%. Medicaid eligibility doesn’t start until age 65. My plan would be to start social security the same year that I qualify for Medicaid, which would be in 3 years instead of waiting 5 years.
I expect that interest rates will not go back to zero anytime soon. I will be looking for an opportunity to invest in an index fund with a low expense ratio which tracks the Nasdaq or S&P 500. Over time, that has proven to get the best returns. There are very few managed mutual funds that have been able to perform as well. The things to watch in the coming year will be the presidential election and the ongoing conflicts around the world. Interest rates are forecast to settle at 4.00% in 2024. This would mean that short term treasury funds would drop to 3.5% from the current 5%. This would result in 1/3 less income each month. At that level, bond funds start to become a more attractive investment for monthly income. Good luck with your investments in 2024!