Five months in and contributions have not been altered. This is a positive, as it should be noted I also still have a bunch of stocks in a broking account. These have been performing very strongly. I don’t place this down to any skill, equity markets are hot and that’s the result. There’s always that lure of diverting contributions to the heat. The long term goal is to have no individual stock holdings. After every one is liquidated, they will make their way into this portfolio.
Progress after contributions. These are cumulative.
Portfolio End July: -0.44%
Portfolio End August: 1.03%
Portfolio End September: 0.46%
Portfolio End October: -0.14%
Portfolio End November: 5.15%
I noted last month I was having some frustrations with being caught buying at market peaks quite often. And when I say market peaks, monthly market peaks. A buy a week either side would have left me in a better position.
This month I was caught out. I had this on my mind. I didn’t want to pay what I thought was over the odds for the MSCI World fund. As a result, I found myself moving and shifting orders over a couple of cents. This went on for two days as the market moved away from me. I finally just bought and the market kept moving up. In contrast, it’s easy to buy a bond fund as you know it’s not moving much, while in the MSCI small fund I placed a limit order around the low of a particular day, it was hit and then the market promptly shifted upward.
This highlights the pitfalls of not having someone execute trades on your behalf or not having the function available that allocates the money as soon as the contribution arrives in the account.
Some of these guessing games can be put down to the arbitrary nature of month end measurement of analysis. You don’t live your life by the end of the month. Your contributions aren’t always made on a specific day. You likely won’t be liquidating a position on any of the 12 days that end a month. Yet here I am measuring according to the calendar.
To highlight the futility of it, last month I was moaning about poor buy times which dragged my end of month figure down. A couple of days later the portfolio is in the green.
What can you do, eh?
Disclaimer: The discipline project is a personal endeavour and should not be constituted as a financial strategy that anyone should follow. It is more a study in repetition and shutting out the noise in pursuing a financial goal, than any focus on portfolio construction. Anyone looking to build a portfolio should seek financial advice to find out which strategy is right for them, if you are seeking financial advice then you should consider one of Australia’s best financial advisors who may be able to help you identify your goals and put in place a reliable strategy to pursue them.
