“Predicting the market is not the key to wealth; being prepared for whichever direction it goes is.”Robert Kiyosaki
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.
Now, in these troublesome market conditions, you clearly see investors heading toward the usual safe havens. Gold price has hit a 7-year high and momentarily breached $1,600/oz in January, with no end of the rally in sight. Also treasury bonds had a good month, with money flowing into this asset class. Fed, with Jerome Powell in the lead role, left the interest rates unchanged, driving down yields of the 10-year US Treasury bonds and thereby driving up prices of the bonds.
With all these movements, I am glad to have chosen to follow the All Seasons Portfolio strategy. As Robert Kiyosaki was quoted at the beginning of this post, it is endlessly difficult to time and predict the market, but you should rather be prepared for all the ups and downs.
Portfolio Update – January 2020
As mentioned at the beginning of this post, I have done some adjustments to my portfolio. That could be an understatement – I have given the portfolio a proper makeover.
I have slimmed down the amount of ETFs down to 6 – which is one for each asset class. In the process, I also took the opportunity to adjust the allocation, so now I am really zoomed in on what I am looking for. For most assets, the discrepancies are due to non-even ETF prices, for example that it is difficult to get it exactly right when one unit of an ETF is €110. For Gold and Commodities, I left them as they were to avoid further trading costs. This means I am somewhat overweighted in Gold, and a little too short of Commodities.
So all in all, you could say that I start this year with a proper rebalancing, and as you know, that is a key part of the All Seasons Portfolio Strategy.
With this rebuilding process, the portfolio splits in EUR has been adjusted somewhat as well. Corporate Bonds has fallen away completely, while Equity has increased a lot.
Total Portfolio development is still strong. This month, it has been helped massively by the great bump up in gold price. Commodities have also jumped over the zero line, so now almost all my assets have seen positive development since inception.
I’ll keep the Corporate Bonds line there for a while, but I think that this might fall away later if it will bee too irrelevant to show a line going completely sideways.
In a few months, I will also start separating the development into two graphs: one showing since the beginning, and one showing 2020 figures. This will enhance the perception of the differences in development for starting with adding an ETF from zero, when compared to beginning with a bucket of money to allocate correctly from day 1.
Dividends were good in January, but are mostly attributable to assets that I sold. I doubt they will be this consistent going forward, as only 2 of my 6 ETF are distributing.
This month, the total table of my holdings will be quite extensive (sorry for that) just to illustrate what exactly I have done in my portfolio. I have included the ETFs that I have sold. From February 2020, this will be dropped down to only 6 ETFs.
|ETF||Class||ISIN||December 31, 2019||January 31, 2020|
|iShares Global Inflation Linked Govt Bond UCITS ETF||TIPS||IE00B3B8PX14||€0||€456.69|
|iShares USD TIPS UCITS ETF||TIPS||IE00B1FZSC47||€392.66||€0|
|Vanguard EUR Corporate Bond UCITS ETF||Corporate Bonds||IE00BZ163G84||€377.30||€0|
|iShares EUR Govt Bond 3-5yr UCITS ETF||Govt Bond Mid||IE00B1FZS681||€173.49||€0|
|Invesco US Treasury 3-7 Year UCITS ETF||Govt Bond Mid||IE00BF2FNQ44||€259.49||€380.95|
|iShares JP Morgan EM Local Government Bond UCITS ETF||Govt Bond Long||IE00B5M4WH52||€388.78||€0|
|iShares USD Treasury Bond 7-10yr UCITS ETF||Govt Bond Long||IE00B1FZS798||€362.02||€0|
|iShares USD Treasury Bond 20+yr UCITS ETF||Govt Bond Long||IE00BSKRJZ44||€267.86||€0|
|iShares Global Govt Bond UCITS ETF||Govt Bond Long||IE00B3F81K65||€0||€1,122.66|
|Invesco Bloomberg Commodity UCITS ETF||Commodities||IE00BD6FTQ80||€307.08||€316.49|
|Xtrackers Physical Gold ETC||Gold||GB00B5840F36||€444.51||€513.92|
|Vanguard FTSE All-World UCITS ETF||Equity||IE00B3RBWM25||€0||€1,081.02|
|SPDR MSCI Europe Small Cap Value Weighted UCITS ETF||Equity||IE00BSPLC298||€191.75||€0|
|SPDR MSCI USA Small Cap Value Weighted UCITS ETF||Equity||IE00BSPLC413||€488.18||€0|
In other news, I have in January also implemented a page here showing my portfolio in real time. As Google Finance is not always so reliable, it can take a while to load, and if some data set does not load at all from Bloomberg’s website, many functions of that page do not work at all. Quite irritating to be honest, but hey, at least it shows more than I could show before. Check it out at My Portfolio and let me know what you think.
I have also improved the ETF Portfolio Inspiration site, and have started to add portfolios depending on whether you prefer accumulating or distributing ETFs. This work is not done yet, but I’ll finalize it when it calm down a bit at my job. Hopefully soon though.
This concludes all I had to share with you for now. How is your portfolio holding up now during Corona times? Numbers in the blacks? Love to hear about your experiences and lessons learned as well.
Until next time,