All investments carry risk. Historic performance does not guarantee future gains. No content on this website constitutes financial advice, but are only my personal reflections and descriptions of my experiences.

Portfolio Update – February 2020 – Coping financially after the corona virus

  • Corona update: All Seasons Portfolio development was -3.46% 21 Feb to 6 Mar, compared to -14.33 All-World Stocks
  • Bonds helping to avoid the worst drawdown
  • Stocks, gold and commodities in negative territories, while gold has gained back some losses during the beginning of March
  • All Seasons Portfolio Strategy shows its value during shaky markets; it is good to diversify across asset classes to decrease portfolio risk
  • After these few weeks, my confidence in the strategy remains strong

Hi and welcome back,

Let's cut to the chase straight away - it is during special circumstance that I write this month's portfolio update. February har been a rocky month all over the world and asset types. I am sure you have felt the effects of the spread of the corona virus Covid19 in your portfolio. I guess that you are also very curious about how the All Seasons Portfolio has performed during a time when the VIX index, which measures market volatility, has reached 54 (so far)?

Have you been at all curious how the All Seasons Portfolio strategy has worked out in the middle of the corona outbreak and the worries on the financial markets? Luckily, that is what I have set out to answer this month.

Considering that the All Seasons Portfolio is designed with the thought in mind that it should withstand the volatility on the stock market, my portfolio should have fared quite well? That is what I will answer in this month's portfolio update.

The layout of today's post will be that first, we will look at the past two weeks specifically how the All Seasons Portfolio has managed the risks of the corona outbreak and the volatility on the markets. We'll go through each asset classes and look into the day-by-day development of my All Seasons Portfolio. Lastly, we will look at the month-by-month portfolio updates as we always do.

Read more to find out how my portfolio has been impacted by the bear market caused by the corona virus.

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Portfolio Update – January 2020

Welcome back to a new great year with the All Seasons Portfolio Strategy!

January has been exciting in my portfolio. It now looks totally different. Well, I still employ the same strategy as always, but I have simplified - a lot. I have cut down the amount of ETFs from 12 to 6 and all with an All-World focus. I think this will make my portfolio simpler, but also for you, it will be easier to follow what I do and see the benefits of the All Seasons Portfolio Strategy. But more on this to come further down.

January has had som peculiar weather here in Stockholm. We still haven't seen winter at all so far. Usually, we have snow and ice here, but it has been very warm for the season. Even if the cold weather can sometimes be cruel and feel harsh, it is still quite enjoyable somehow. And the snow makes the otherwise dark days feel brighter.

On the markets, we are heavily impacted by the Corona virus worry. Today, when I write this on Monday 3 February, Shanghai stock exchange fell by 9% after having been closed for the week following the Chinese new years. Also Western stock markets have been impacted negatively these past weeks, also bringing oil prices down. Citibank sees further price declines toward $50 per barrel.

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Year in Review – Summary of 2019

It is a new decennium, and we close the books of 2019 as we leave yet another year behind us. New Year is an excellent time to pause for a minute and reflect over the past 12 months. For me, it is also a great opportunity to take a look of how my All Seasons Portfolio performed this first year, and, most importantly, what I have learned in the process.

The structure for this post, is to first have a quick recap month by month from January to December of my investments, and after that, we will close the chapter of 2019 with some lessons learned, and new thoughts for the year to come.

I did not do any rebalancing this first year, as I only added funds by buying ETFs in asset classes where I was underweighted. Despite this, the profits turned out pretty well this first year, and well in line with the theory. In theory, the All Seasons Portfolio should yield about 4-5% per year as standard, and then by rebalancing, this yield will be topped with 1-2% more, providing a low risk return of about 7%. That is very much in line with the stock markets average return over time.

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Portfolio Update – December 2019

  • Total Portfolio value: € 3,745.64
  • YTD development: +5.28%
  • MoM development: +1.28% from € 3,698.28
  • Current average fee: 0.25% p.a.

I hope that you had a good and joyful end to 2019, and a perfect start of 2020! Feels amazing, doesn't it, with a new year and a new decade? For me, this marks the first 12-month anniversary of this blog and my All Seasons Portfolio, for which I took my first shaky steps in December 2018. And look where we are now!

My year is actually of to a rocky start (a case of food poisoning, leaving out all the details), but the year can only get better from there. I am slowly but surely growing the reader count of this blog, for which I am ever so grateful. And my portfolio is actually performing decently as well.

The end of 2019 felt quite uneventful, but that might only be that everything happens at once now in 2020 with the American assassination of Qasem Suleimani, the Iranian general (spoilers), but all in all, investors and markets were in a good mood in December.

However, leading indicators of economic growth show a lack of growth going forward and that companies' profits aren't really increasing at the same pace as their stock prices. I guess we will see more of the results of such tendencies during 2020. Good that we have prepared with a risk adjusted portfolio such as the All Seasons Portfolio.

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Insight – Why would anyone in their right mind buy Government Bonds with negative yield?!

  • Yields are low and negative due to central banks' efforts to spur on the economic growth
  • There are still buyers of assets with negative yield, such as institutional investors
  • Government bonds are a liquid asset held instead of cash or other assets with risk for decrease in value, such as stocks in a bear market
  • Government Bonds make up 55% of the All Seasons Portfolio, and at the bottom, I summarize my ETFs

Soon, I have one full year’s history of the All Seasons Portfolio since starting in December last year with my first investment. I have come a long way since, starting from zero and now having accumulated a portfolio valued at EUR 3,700 in only 11 months. The main takeaway, which you should adopt, is to be disciplined and to continuously set aside an amount every month to invest. That will quickly accumulate, and you will also have that money working for you with compound interest.

As I already mentioned in the relevant blog post, in November, I made an addition on the Long-Term Government Bond part of the portfolio. This time, I purchased the iShares $ Treasury Bond 20+yr UCITS ETF USD (Dist) (EUR).

When posting about buying government bond ETFs during this first year, one particular question has always been brought up. It is a very valid question considering the current market conditions with low and negative interest rates. Why should you include government bonds in the portfolio, who in their right mind buys and holds bonds with negative interest and why do they do so?

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Portfolio Update – November 2019

  • New investment: Long-Term Government Bonds
  • Average portfolio fee: 0.25% p.a.
  • +3.95% YTD growth (up from 4.17% in September)
  • Total portfolio value EUR 3,698.28
  • Request for input for a coming post on investing in bonds with negative yield

Welcome back to a new update of my All Seasons Portfolio built by ETFs available outside the US. This time, with an update on the November 2019 development.

Outside, winter is making its first appearance here in Sweden with cold weather and some days with snow fall. That good enough reason to keep warm inside and binge watch TV series or read, and prepare for Christmas.

It reminds me that I have soon completed a full year since starting with the All Seasons Portfolio strategy. 21 December 2018 I wrote my first post on how to get started with the All Seasons Portfolio. This past year has taught me a tonne, and I will write a special blog post on the most important teachings and summarizing the first year.

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