Eight months down, all contributions made as intended.
As noted a few months back, the time you have the opportunity to buy plays a large determinant in your returns month to month. In the first ten days of February, global small companies moved up 6.7%. Guess when I had the opportunity to make my buy for the month? The 11th of February. That wasn’t quite the peak, but it was mostly downhill from there.
Frustrating, but unavoidable. Looking back over the last 8 months, if I’d lucked out with more monthly lows my return would look significantly better. In ten years will it matter? You’d certainly hope not!
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%
Portfolio End December: 5.07%
Portfolio End January: 4.95%
Portfolio End February: 3.94%
Increasing bond yields also played into the decline in the portfolio this month as bond prices fell in response. There’s quite the possibility I’m too heavy on bonds and I did ponder the idea of adding emerging markets this month. Fortunately, I didn’t, because if the buys I made this month were poor timing, an emerging market buy would have been even worse. It would have been a 7.5% decline in less than a month.
I wouldn’t have more than 10% in emerging markets for that reason I’ve just highlighted. I’m at the stage where one month’s contributions would be close to 10% of the portfolio, so given the decline in emerging markets and the current portfolio size, I may take the opportunity this month.
Until next month!
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.
