Investment Portfolio March 2019

Our Approach

I review our investment portfolio on a periodic basis. Usually once a quarter. I don’t see a lot of point in reviewing any more often. It just leads to the temptation “to do something” which, in my experience, has usually meant I’ve sold something about to go up or bought something that crashes to zero.

Our investment approach is fairly simple. After almost 2 decades of investing, I realize a few things. Firstly, I’m no good at trading. The more I leave it alone, the richer I am. Secondly, investments into asset classes matters far more that individual investments in a well diversified portfolio. Thirdly, cost is all you can control and fourth, markets are mean reverting. These four principles drive our investment approach.

Target Allocation

We set our target allocation to be fairly aggressive. It does contain some fixed income and cash, but in the main we target equities. As can be seen from the graph below, currently my actual allocation is massively off compared to target. This is due to the redundancy payments received in March that I am going to keep mostly in cash and liquidity purposes.

Current Market

My approach to making new investments is quite simple. I am a firm believer that markets are mean reverting. They may trend for a while; days, weeks or even years, but eventually they return to their long run average.

3 Month ETF returns

The 3 month returns for all US listed ETFs is above. This quarter THERE IS NOTHING! that I can invest in. Everything went up, apart from inverse and volatility ETFs which of course went down. I exclude both those products from my investment universe, leaving nothing at all to invest in……

This is a little unusual. Most of the time there is something that’s in the red. Not sure if this harbors something bigger on the horizon, but it is unusual.

Unfortunately, the data for the Australian market isn’t as easy to come by, so I have to use the US as a proxy. Its not great, but for now its all I’ve got.

Current Investment

Our current investments are mostly cash. We did make a few small investments.

Investments made during March 2019

InvestmentAmount $Comment
Raiz122The robo investment app we use. Rounds up spending accounts into investments
Brickx220Fractional investment into Australian residential property.
ASX:STW1,994Added investment into an ASX200 ETF
Ratesetter - 3 year loan300crowdfunded loans. Mostly short term, 30 day, but this one was longer term for income.

Jim Smith

James Smith is a personal finance expert with over 20 years experience. He believe that money should not be stressful. By using the Stress Free Money pyramid it helps everyone achieve their financial dreams.

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