insight – Page 2 – 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.

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

Post author:Nicholas
Post published:July 19, 2020
Post category:Insights
Post comments:9 Comments
Reading time:31 mins read

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.

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?

I use the low-cost broker DEGIRO - one of Europe's leading online brokers - for my All Seasons Portfolio. To build your own All Seasons Portfolio, on DEGIRO you can find a great variety of ETFs listed on for example Xetra, LSE, Euronext, and Borsa Italiana. This even includes a selection of 200 commission-free ETFs (conditions apply)! Open an account and familiarize yourself with the platform today!

What is the All Seasons Portfolio Strategy and how am I implementing it? In theory, this strategy allows you continuous capital gains but limits the downside and big losses. Click here to find out more and read about how I will actually implement the strategy in practice to achieve the profits but avoiding much of the drawdowns.