Portfolio update: 3Q2026
This article has information about my personal portfolio at the end of the third quarter.
For my new followers on Substack, I provide a portfolio update at the end of each quarter. You can find prior quarters' analyses in articles in this blog labelled "Portfolio Update".
This update contains a series of tables that I present each quarter. I will provide some colour around these tables, highlighting changes in my portfolio in the third quarter and year-to-date. I hope you find this update interesting (and perhaps even useful).
Summary
Most of my investments are held in a US brokerage account in several normal and tax-advantaged accounts (mostly Roth IRAs). I also have a UK private pension fund, or SIPP. I convert my UK investment account from GBP to USD for purposes of analysing my portfolio each quarter.
The return on my portfolio through the end of September was 10.5%, of which 1.4% was from current income (i.e. dividends or interest).
My major portfolio moves so far this year have included:
Adding to existing holdings that I thought got oversold (MSFT being the main one, but also NVDA and V),
Adding names that I considered more defensive as I tilt my portfolio in that direction (JNJ, PG, SO),
Selling names that I felt were too expensive (AAPL and CRWD), and I have been wrong on both so far,
Selling names that I felt were not well positioned for future growth (LDOS), or were too small to be consequential and I did not want to add (US infrastructure fund), and
Lightening around the edges on names that I needed to sell for portfolio concentration reasons and liquidity for living expenses (AMZN, GOOG, ASML).
I added one new name this summer – Taiwan Semiconductor Manufacturing Company Ltd (ADRs traded on NYSE under TSM). I am continuing to build a position in this name on weakness.
My philosophy has been to stay invested in a portfolio of diversified stocks and ETFs which account for 70% to 80% of my total portfolio. I have been invested this way for around 30 years, and feel that I have the “emotional ability” to ride the ups and downs, albeit not without stress when stocks get hammered due to bad economic policies and / or bad macroeconomic decisions, both of which have been in abundance under the current administration.
Note that I sold a property in the USA in January 2026, and have set aside the proceeds for another potential real estate purchase in the coming 12-18 months. This means that the cash / cash equivalents portion of my portfolio is higher than it would ordinarily be (as a percentage), and consequently, the equities portion is lower.
For context: the market year-to-date through Sept 30, 2026
Global equities have performed well again this year, at least so far. Several international stock markets have outperformed US stock markets. Bonds have performed poorly because interest rates have been increasing since the US-Iran war started. This includes US Treasuries / foreign governments bonds, as well as corporate bonds (both investment grade and high yield). As far as haven assets, gold was down 4.6% through the end of September. For those of you that own cryptocurrencies (which I do not), Bitcoin was also down 4.6% through the end of September, having clawed back more severe losses in the first half of the year.
The table below provides returns (total returns in most cases) of the indices and asset classes against which I gauge the performance of my portfolio.
My investment philosophy
My portfolio mix has not changed dramatically this year, aside from the addition of cash from the sale of real estate in January 2026 which will likely be recycled at some point into other real estate. This disclosure is for context, especially if you compare some of the tables in this update to tables in the periods 2025 and before.
I have stayed fully invested in stocks with only modest changes to my portfolio mix since the beginning of the year (ignoring the cash infusion in January). As my longtime readers know, I am comfortable carrying more equities risk than many financial advisors might suggest at my age. Risk tolerance is highly personal, and I am comfortable with this level of risk given my time horizon and liquidity needs in the future. Also, the composition of a stock portfolio (meaning which particular stocks you own) and geographic diversification can make a difference in the risk profile of your equity holdings.
My returns
The blended return on my investment portfolio through the end of September was 10.5%, of which 1.4% was from current income (meaning interest and dividends). Using my portfolio mix at the end of the quarter (see next section), and applying the total returns generated for each broad category of index or asset class (as profiled in the table in the section above), my return benchmark would theoretically be around 10.0%. Therefore, I have slightly outperformed the market, although for the sake of disclosure, this does not occur every quarter. The just-above market performance raises the usual question though – why not just play sector / country ETFs and dispense with trying to outsmart the Street and professional investors on single names? It’s a fair question, but then that would be no fun!
My portfolio mix
The table below is my asset mix as of September 30, 2026.
All asset classes except cash / cash equivalents were lower because of the one-time injection of cash in January. For example, equities were roughly 76% of my portfolio at the end of last year, but are 71% now.
My top stock holdings
I own 20 individual stocks and five equity ETFs, one of which is an energy ETF and the other four of which are geographic ETFs. The table below contains my top 10 holdings ranked by the percentage of my portfolio.
In nearly all prior periods until the end of the first quarter of this year, my largest equity holding has been Berkshire Hathaway (BRK.B). I have been gradually trimming this position for a while now, not because I do not like the stock, but rather because it represented too big of a position in my portfolio. BRK.B has been overtaken by two other positions this year and is now a close third in my portfolio. CSCO went on a run early in the year (#1 position at June 2026), and then MSFT went on a run starting in mid-summer (#1 position in Sept 2026).
The only new entrant on the list above in 2026 is ASML (9th), which replaced SO. ASML is up massively YtD, while SO has underperformed since mid-August, much to my disappointment.
I have consciously been reducing the number of individual stocks that I own to make monitoring them slightly easier. I try not to have more than 5% of my assets invested in any one position, even names in which I have strong conviction, for portfolio diversification reasons.
If you study the table above, you will see that the movement in relative position of stocks in my portfolio this year has been caused by a combination of price action and intentional portfolio decisions, meaning I have decided to either increase or decrease my position. I have cut some of the runners during the year to raise liquidity for living expenses, and these sales have generally been focused on Mag 7 stocks that I thought were slightly expensive (and to which I felt that I was becoming over-exposed). (Note that of the Mag 7, I do not own META or TSLA.)
MSFT was an exception in that I added to this name when the stock got hammered in the first half of the year. I suggested to my readers that MSFT was a good opportunity at these beaten-down levels (not investment advice, blah blah blah). Subsequently, the stock rallied and it has now become an over-weight position in my portfolio. As MSFT soared to record highs in September (and even higher subsequently), I trimmed into strength in early October, taking some money off the table.
I also had an objective to make my stock portfolio slightly more defensive, so I added to positions like JNJ, PG and SO.
I added one new position in the third quarter – Taiwan Semiconductor Manufacturing Co Ltd (ADRs on NYSE are TSM). Having done my research and developed my thoughts, this is a play on semiconductors albeit at the most basic level given TSM’s dominance as a global chip foundry (and not a fabricator). It is not a top 10 position, and I doubt it will become one unless the stock runs beyond my wildest expectations. I will continue to build the position on weakness until it is sufficiently meaningful.
The tables below illustrate my five best and five worst performing stocks for 2026 through the end of September (top table) and during the third quarter only (bottom table).
Energy / commodities (XLE, BP.L and BHP.L) have been important drivers of my portfolio performance this year, unsurprisingly given the ongoing situation in the Gulf.
It is also interesting to see that ASML and CSCO – both top five performers YtD – came off the boil in the third quarter, making the top five worst list for this period. CSCO consolidated its strong YtD run as an indirect AI beneficiary, and semi-conductor related stocks like ASML came under pressure as the appeal of chip stocks faded.
There are two positions I am considering what to do as far as holding or selling – MCD (getting too small, stock underperforming and mixed outlook) and PEP (has become a perennial underperformer).
Sector perspective
The table below illustrates the sector breakdown of my stock portfolio. In this table, XLE (energy ETF) is included in the “Energy” sector, and several gold ETFs are included in the “Materials” sector. The right-most column provides the individual stocks and ETF holdings at the end of September, so you can see the entire list of names I own.
Information technology is the largest sector for me. It might appear overweight, but it is less than the sector’s concentration in the S&P 500 index on September 30, which was 33.3%. I am overweight Financials and Energy, and underweight Industrials, Real Estate and Consumer Discretionary (vis-à-vis the S&P 500 index weightings).
Although I added TSM (new position) in the third quarter, and added to MSFT and NVDA earlier this year, most of the increase in my sector concentration has occurred due to price action in the shares I own, which has been true across a broad array of technology names. For example, CSCO is up 41% YtD, ASML 69%, and AAPL 23%. I reduced holdings in CSCO (concentration risk) and AAPL (I think it’s expensive) so far in 2026, but it mattered little as far as my concentration in technology-related shares more broadly.
I also added to Healthcare (JNJ) and Consumer Staples (PG) sectors, viewing both as more defensive in difficult times.
Hedges and options
At the end of the quarter, I held a series of QQQ puts expiring in December, March (2027) and June (2027). For what it’s worth, all are well out of the money. These are modest positions covering only a small portion of my stock portfolio, but I keep them as partial insurance and for peace-of-mind. They act as a drag on the performance of my portfolio, but I view them as a modest cost to stay fully invested in stocks. At the end of the quarter, I also owned puts on TSLA and CRWD. I started these positions in late August, and they initially worked well, but not so much so since mid-September or so. Both of these wildly over-valued stocks keep going in the wrong direction (up), driven by retail flows and meme-like behavior. So much for old-school valuation work, which is useless for names that have support of the X / Reddit cohort.
Fixed Income and Cash
The table below illustrates my fixed income portfolio by major buckets, including cash / cash equivalents (UST bills), corporate bonds (IG and HY), and government bonds.
At 13.3% of my total portfolio, cash and cash equivalents is unusually high at the end of the quarter mainly for reasons I have explained earlier. Fixed income generates a meaningful portion of my current return, but unfortunately, increasing yields have negatively affected the performance of this segment of my portfolio this year.
Conclusion
In the first three quarters of 2026, I have slightly outperformed the weighted-average mix that my portfolio would suggest on a pro forma basis, mainly because I continue to own a handful of winners in the technology arena. I have been reducing around the edges into strength on some of the tech names that have gotten expensive, and shifted into existing stocks that are in more defensive sectors. I am not afraid to add to beaten-down names that I believe in, or to invest in other areas in which I think there will be long-term growth as a driving macro-trend. Nonetheless, I intend to stay relatively defensive for now given the four-year run in stock prices.
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