January saw my net worth increase by 1.1%, with poor investment & pension performance offset by reasonable savings and an increase in my property value.
The value of my investment portfolio was down over 2% following sharp decreases in equities markets late in the month. Purchases were limited to standing monthly purchases of the HK and China indices. The recent movements in emerging markets equities and currencies are of concern, but i'm letting the dust settle on the recent falls before considering new purchases.
My pension fund unit values fell around 1%. Having started the month positively, values dropped significantly towards the end of the month
Property rental income was steady. I also increased the value i hold the property at given continued strength in the local market. My valuation is still lagging the actual market to maintain a conservative view.
Cash balances decreased following the payment of most of my income tax bill which was fully provided for. Savings were slightly below average as a number of Christmas and travel costs at the end of the year fell into January.
Year to date net worth growth: 1.1%
Year to date savings rate: 46%
Friday, 31 January 2014
Thursday, 16 January 2014
2013 Annual Review
Looking back, 2013 was a very successful year financially. With headline figures of 39.5% net worth growth and a 69% savings rate, it has been my best year yet.
Asset performance:
My property investment continued to yield reliable high income, and the property value continued to appreciate. In 2013 (and going back long before) this continued to be my best performing asset.
My pension funds appreciated, with unit values increasing around 15% on top of continued monthly contributions. This benefited particularly from the exceptional UK and US stock market performance.
My investment portfolio grew materially with regular investments, but had mixed performance with developed equities outperforming emerging markets. Although many investments appreciated and paid regular high dividends, falling metals and some adverse fx movements saw the overall performance stay fairly flat.
Cash grew materially, both in dollar terms and as a proportion of total assets. This was a result of a high savings rate and a couple of big one offs. I did manage to maintain a reasonable cash yield over 2%.
Performance against 2013 objectives:
1) Reduce cash balances towards my medium term target of 20% of total assets.
FAIL, although i did continue to build up my investment portfolio to a reasonable size and maintain a healthy cash yield. I really need to give some thought as to my target asset allocation, as the more this builds up, the greater the effort will be to re-balance.
2) Maintain investment discipline.
Overall, i am happy with my performance here. 2013 was by far my most active year in the markets and i have built a portfolio that largely meets my investment objectives. One blemish early on saw a loss realised on some more risky pref shares from chasing yield.
3) Achieve a high savings rate.
This was a major success, and achieved whilst not making a conscious effort to hold back on any particular expenses. I expect this to drop in 2014, but still stay well above my target floor of 50%.
4) Improve fitness.
This was broadly flat, with ups and downs during the year. My gym membership was renewed and I will re-focus for the new year.
5) Improve work/life balance.
2013 was a very tough year for work, and whilst this started quite badly, i felt it did improve towards the end of the year. Realistically work will stay challenging going forward, but i feel i am doing a better job of making the most of time away from work.
Overall, i'm happy with what i achieved in 2013. That said, there are a number of things i'd like to work on in 2014 which i'll cover in a separate post.
Asset performance:
My property investment continued to yield reliable high income, and the property value continued to appreciate. In 2013 (and going back long before) this continued to be my best performing asset.
My pension funds appreciated, with unit values increasing around 15% on top of continued monthly contributions. This benefited particularly from the exceptional UK and US stock market performance.
My investment portfolio grew materially with regular investments, but had mixed performance with developed equities outperforming emerging markets. Although many investments appreciated and paid regular high dividends, falling metals and some adverse fx movements saw the overall performance stay fairly flat.
Cash grew materially, both in dollar terms and as a proportion of total assets. This was a result of a high savings rate and a couple of big one offs. I did manage to maintain a reasonable cash yield over 2%.
Performance against 2013 objectives:
1) Reduce cash balances towards my medium term target of 20% of total assets.
FAIL, although i did continue to build up my investment portfolio to a reasonable size and maintain a healthy cash yield. I really need to give some thought as to my target asset allocation, as the more this builds up, the greater the effort will be to re-balance.
2) Maintain investment discipline.
Overall, i am happy with my performance here. 2013 was by far my most active year in the markets and i have built a portfolio that largely meets my investment objectives. One blemish early on saw a loss realised on some more risky pref shares from chasing yield.
3) Achieve a high savings rate.
This was a major success, and achieved whilst not making a conscious effort to hold back on any particular expenses. I expect this to drop in 2014, but still stay well above my target floor of 50%.
4) Improve fitness.
This was broadly flat, with ups and downs during the year. My gym membership was renewed and I will re-focus for the new year.
5) Improve work/life balance.
2013 was a very tough year for work, and whilst this started quite badly, i felt it did improve towards the end of the year. Realistically work will stay challenging going forward, but i feel i am doing a better job of making the most of time away from work.
Overall, i'm happy with what i achieved in 2013. That said, there are a number of things i'd like to work on in 2014 which i'll cover in a separate post.
Sunday, 22 December 2013
December 2013 Review
I'm closing the month a few days early before some festive travel. I'll do some more detailed analysis of 2013 in January, along with planning for the new year. Wishing you all a Merry Christmas and a Happy New Year!
December saw my net worth increase by 0.6%, with good savings offset by weaker investment performance.
The value of my investment portfolio was down over 1% following decreases in many equities markets along with some adverse fx movements. Purchases were limited to standing monthly purchases of the HK and China indices. Dividends were healthy, as they have been for the past 4 months. The critical mass of regular dividend paying ETFs is starting to contribute a reliable (albeit small at this stage) income stream.
My pension fund unit values fell around 1% during the month in line with global equities.
Property rental income was back to normal with no further expenses.
Cash balances increased with minimal investments and a good savings rate. I'm expecting most of my Christmas costs to come through in January.
Year to date net worth growth: 39.5%
Year to date savings rate: 69%
December saw my net worth increase by 0.6%, with good savings offset by weaker investment performance.
The value of my investment portfolio was down over 1% following decreases in many equities markets along with some adverse fx movements. Purchases were limited to standing monthly purchases of the HK and China indices. Dividends were healthy, as they have been for the past 4 months. The critical mass of regular dividend paying ETFs is starting to contribute a reliable (albeit small at this stage) income stream.
My pension fund unit values fell around 1% during the month in line with global equities.
Property rental income was back to normal with no further expenses.
Cash balances increased with minimal investments and a good savings rate. I'm expecting most of my Christmas costs to come through in January.
Year to date net worth growth: 39.5%
Year to date savings rate: 69%
Tuesday, 10 December 2013
Adverse fx movements, or are they..
Over the past 6 weeks or so i've noticed the unit value of a number of my ETFs declining, without seeing the same degree of falls in the underlying equities markets. This has been particularly apparent in asia pacific and emerging markets ETFs, which have dropped more materially.
However, a lot of the fall seems to be due to foreign exchange movements rather than underlying equities performance, with a double whammy of a number of currencies weakening against the USD, and GBP (many of my ETF investments are UK listed and GBP denominated) rising against USD. So for example, when i view the performance of my asia pacific property & high dividend ETFs in GBP, the value is down quite a lot recently.
This isn't a big concern for me for a few reasons:
- firstly i plan to hold long term so try not to focus too much on day to day price movements as long as the fundamentals remain solid
- although the investment values in GBP are falling, the value of the investments in their underlying currency are actually holding up well
- i am looking to reduce GBP exposure over time, so the fx movements will actually be favourable for investing in other currencies should i choose to sell GBP and buy USD, HKD or AUD for example.
The caveat to all this is the magnitude of the movements. Whilst i am comfortable with the size of the recent trend i would be concerned if this was the tip of a longer term and larger shift in the markets that could materially alter the overall value of my assets.
The other big unknown looking into 2014 is what impact QE tapering will have on global fx and equities markets and when we'll start to see this feeding through.
I'll pay closer attention to fx movements over the coming weeks and may look to re-balance if opportunities arise.
However, a lot of the fall seems to be due to foreign exchange movements rather than underlying equities performance, with a double whammy of a number of currencies weakening against the USD, and GBP (many of my ETF investments are UK listed and GBP denominated) rising against USD. So for example, when i view the performance of my asia pacific property & high dividend ETFs in GBP, the value is down quite a lot recently.
This isn't a big concern for me for a few reasons:
- firstly i plan to hold long term so try not to focus too much on day to day price movements as long as the fundamentals remain solid
- although the investment values in GBP are falling, the value of the investments in their underlying currency are actually holding up well
- i am looking to reduce GBP exposure over time, so the fx movements will actually be favourable for investing in other currencies should i choose to sell GBP and buy USD, HKD or AUD for example.
The caveat to all this is the magnitude of the movements. Whilst i am comfortable with the size of the recent trend i would be concerned if this was the tip of a longer term and larger shift in the markets that could materially alter the overall value of my assets.
The other big unknown looking into 2014 is what impact QE tapering will have on global fx and equities markets and when we'll start to see this feeding through.
I'll pay closer attention to fx movements over the coming weeks and may look to re-balance if opportunities arise.
Saturday, 30 November 2013
November 2013 Review
November saw my net worth increase by 0.9%, with a lower than average savings rate and weaker investment performance.
The value of my investment portfolio was down around 1% following a very strong October, with emerging markets and metals falling. New purchases for the month included more units of the Emerging Markets High Dividend ETF (SEDY.L) and a small amount of gold.
My pension fund unit values were fairly flat for the month.
Property rental income was lower following a few repairs needed at the start of a new tenancy.
Cash balances were fairly flat with new investments offsetting monthly savings. Income was a little lower than average and expenses were higher, including my annual gym membership paid in one go.
Year to date net worth growth: 38.6%
Year to date savings rate: 70%
The value of my investment portfolio was down around 1% following a very strong October, with emerging markets and metals falling. New purchases for the month included more units of the Emerging Markets High Dividend ETF (SEDY.L) and a small amount of gold.
My pension fund unit values were fairly flat for the month.
Property rental income was lower following a few repairs needed at the start of a new tenancy.
Cash balances were fairly flat with new investments offsetting monthly savings. Income was a little lower than average and expenses were higher, including my annual gym membership paid in one go.
Year to date net worth growth: 38.6%
Year to date savings rate: 70%
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