Portfolio Update – January 2021 – What the Gamestop frenzy can teach the sensible investor

It is with a great portion of excitement that I have now sat down to finish up the first monthly portfolio update of 2021!

Good to have you here with me to review the month. In this new year, most of these monthly updates will remain familiar, but I have included some new features. Mainly, I have added a few more graphs in the portfolio review segment, which in more details shows the daily performance of my portfolio (also with comparison against the S&P 500) on a rolling 3-month period. I hope this will be a helpful tool for you when contemplating replicating a risk parity strategy.

The greatest news that has made the most headlines in January (besides the Capitoleum protests) has obviously been the short/gamma squeeze in GME and other heavily short stocks, as constructed by a group of Redditors in the subreddit r/WallStreetBets.

I am confident that you have not missed this, and perhaps you are already tired of that mania, which has already reached beyond its apex. I will not go into detail reviewing the occurrence itself, as that has already been covered by literally everyone - finance media and independent bloggers alike.

But even though the mania is not really related to the All Seasons Portfolio strategy - or even sensible investing at all for that matter - there are still elements that can be useful for the investor who is better at managing risk. I will therefore not ignore the short squeeze all together but I will focus on a few points that I have identified as important reminders for both sensible investors and FOMO traders.

Continue Reading Portfolio Update – January 2021 – What the Gamestop frenzy can teach the sensible investor

Portfolio Update – October 2020 – U.S. Elections and Risk Off

  • Monthly portfolio update: Election jitters and a risk off sentiment in markets toward late October brought down most asset classes. Most losses have been recovered since.
  • Diversified risk parity strategies such as the All Seasons Portfolio will bring stability to uncertain times ahead
  • Book tip: The Permanent Portfolio: Harry Browne's Long-Term Investment Strategy (link at the bottom of the post)
  • In case you missed it: My latest article about How VIX ETFs can improve portfolio performance and stability in volatile environments (Now available exclusively on Patreon; to be posted on this blog in late November 2020)

Hello, and great to have you back for a new portfolio update.

I hope that in these challenging times, you are staying positive and testing negative.

I can barely believe we are already in November - the darkest and gloomiest month of the year (here in Sweden it will now be cloudy, windy and murky for the next 2-3 weeks at least). And on top of it, the Covid-19 virus soon celebrates its 1 year birthday, and we are on the ninth month of working from home here, with renewed lockdowns all across Europe. It seems hard to find things to cherish about, but we'll need to try our hardest to not let that affect us too much. I have just received a delivery from Amazon for two books on risk parity, which I will be burying myself in while autumn storms blow outside.

This past week I have spend a lot of my time in analysing how investing in VIX (CBOE's Volatility Index) through a VIX ETF would have impacted a risk parity portfolio in the spring of 2020 and the Covid-19 crisis. As you may recall, all asset classes (including government bonds and gold) declined for 10 days in March, so I looked into if there were any asset class available that could have offset the losses in a distressed market.

Continue Reading Portfolio Update – October 2020 – U.S. Elections and Risk Off

Portfolio Update – September 2020 – Which is the Best Commodity Index?

  • Monthly portfolio update: Fairly stable month (again): bonds recover, while other assets decrease slightly
  • Book tip: Hot Commodities by Jim Rogers (link at the bottom of the post)
  • In case you missed it: Where does Real Estate fit in the All Seasons Portfolio? (post from 12 September 2020)

Hello, and great to have you back for a new portfolio update.

I know that I am slightly delayed with publishing this post, as I usually spend a few hours over the first weekend of each month to write my thoughts and review the portfolio performance. This weekend, however, I just moved to a new flat, and found it hard to find the necessary time to write the update.

Anyway, in September I made some changes in the portfolio. Not big ones, but mainly moving assets from one exchange to another, from LSE to Xetra, mainly for cost optimisation and to get rid of ETFs denominated in USD.

This move only included my gold and commodities ETFs. The gold exposure remains the same (physically-backed, but only a different issuer: Xetra-Gold), but for my commodities, I have changed the underlying tracked index from Bloomberg Commodity Index (BCOM) to Rogers International Commodity Index (RICI).

As the special topic for this post, let me elaborate a but more on commodities indicies before reviewing my portfolio. It turned out to a slightly longer text than first anticipated, but well worth the read, so buckle up.

Continue Reading Portfolio Update – September 2020 – Which is the Best Commodity Index?

Insight – Where does Real Estate investing fit in the All Seasons Portfolio?

In this rather lengthy post, the following topics will be discussed:

  • In what economical environments are real estate biased to perform well (economic growth and inflation)?
  • Five ways of investing in real estate, regardless how much money you have
  • How to adjust your balanced portfolio when including real estate - a template for adjusting portfolios regardless of new asset class
  • A list of resources with some of the best books on real estate investing

There are numerous opportunities and strategies for making money by investing. The ultimate goal is always to achieve a combination of positive cash flow and value appreciation of your owned asset. It is just a matter of preferred strategy for the investor which dictates how you can grow your wealth.

With the All Seasons Portfolio strategy, you can achieve profits but with less volatility than on the stock market. This is achieved by having a balanced portfolio that is diversified between asset classes. Typically, those asset classes are stocks, long-term government bonds, inflation-linked bonds, gold and commodities, with the following allocation between them.

There are of course many more asset classes available than the five listed above. One extremely important such asset class is real estate, which is a popular investment object among investors. It is so attractive, because it offers profits in two ways: value appreciation of the property, as well as monthly cash flow from rental income.

In this deep dive article, we will be looking more closely at real estate investing - how you can get exposure to it and with how much capital - and how it fits into an All Seasons Portfolio. Let us first begin with the latter of these two topics by answering the question of what economic biases real estate have.

Continue Reading Insight – Where does Real Estate investing fit in the All Seasons Portfolio?

Insight – What Assets Should You Invest In To Protect Your Portfolio Against Inflation?

The Covid-19 coronavirus has rocked the boat during the first half of 2020 and made a huge dent on financial markets and on the growth of the economy. We are still only in the beginning phases of the turmoil, and it is only in the future that we will truly get a picture of all consequences and how the virus will affect the world economy and global trade. 

In this article, we will be taking a closer look at what actions central banks and governments have taken to stimulate the economy; how such stimulus may affect inflation; what asset you can invest in to be protected against inflation; and how such assets fit in the All Seasons Portfolio Strategy.

Even though many things are uncertain, a couple of things we do already know for sure though, and that is that many are likely to lose their jobs and that many companies are likely to have no choice than to file for bankruptcy. This would have devastating consequences for the economy in many countries, but even more so for the people affected by the growing unemployment rates.In a response to the potential crisis and alleviate the harmful impacts, governments and central banks have acted quickly and they have acted strongly. 

Continue Reading Insight – What Assets Should You Invest In To Protect Your Portfolio Against Inflation?

Portfolio Update – May 2020 – What happens now? Uncertainty after Covid-19

  • Summary of April 2020 in the economy
  • The most important lessons from the coronavirus crisis to remember and to prepare for future crises
  • My All Seasons Portfolio is up 3.93% month by month. Total value now over EUR 4,000
  • Bought Stocks and Commodities this month, and switched Long-Term Government Bonds ETF to US Treasuries instead of global bonds

Welcome back for another monthly update of the All Seasons Portfolio blog. This time around, we have had to digest another month in lock down and April 2020 could perhaps be remembered for us all wanting to forget it.

Anyway, I hope that both you and your families and loved ones have stayed in good health, and that you haven't been too restless at home.

On my end, things have been hectic at work with long days, which is not surprising when you work with loans to corporates. These are interesting times but I am holding up. Hope we will soon be seeing an end of the tunnel. However, I am very pleased and humbled to still have job, as I know not everyone have been that lucky. And at least in Sweden, we have been able to exercise outside, but if our government have employed the right strategy through the outbreak, I am not the right person to take a stance on. All I know is that I have been working from home the past 8 weeks and been avoiding to go to the bars (which cannot be said for all my countrymen). Just hoping that we all will soon be able to get these crazy times behind us.

These are crazy times in our daily lives and for the economy, it has not been uneventful on the financial markets either. It feels quite difficult to summarize everything that goes on when so much happens. It also feels like there is so much going on that you lose the sense of time, like did the WTI crude oil flash crash happen 3 weeks ago or 3 months ago? It seems s hard to keep track of time when stuck at home.

Continue Reading Portfolio Update – May 2020 – What happens now? Uncertainty after Covid-19