Bonds – Page 3 – All Seasons Portfolio

Correction of my Portfolio – Ditching Intermediate-Term Bonds

Post author:Nicholas
Post published:August 3, 2020
Post category:Insights
Post comments:3 Comments
Reading time:11 mins read

It is time for a kind of blog post that I hope will be as few in number as possible, but which I fear are inevitable from time to time. I have corrected a mistake, and want to tell you about it.

In my All Seasons Portfolio, I have until 20 July 2020 (the time of writing this post) held a certain amount if intermediate-term treasury bonds, i.e. bond with a duration of less than 10 years. I have held this in addition to my long-term bonds (20+ years) as part of the bonds portion of the portfolio. The splits have been 10% intermediate-term bonds and 30% long-term bonds, out of the whole portfolio.

As I have come across new and better information, I have chosen to reconsider the decision to hold intermediate-term bonds. They are not a bad investment as such – on the contrary, they are good when considering the risk-adjusted return – but they do not suit the All Seasons Portfolio Strategy.

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

Post author:Nicholas
Post published:March 8, 2020
Post category:Monthly Update
Post comments:0 Comments
Reading time:17 mins read

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.

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

Post author:Nicholas
Post published:December 21, 2019
Post category:Insights
Post comments:13 Comments
Reading time:30 mins read

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?