Net Worth Update: June 2019

Monthly Summary

In June 2019 we saw another big shift for stocks. The S&P 500 seemed to be forming a downtrend at the beginning of the month. Then, as we've seen so many times before, it turned around aggressively and has been making a hell of a run in more recent weeks. Things got exciting for investors after the Fed meeting; even the tiniest words are taken as indicators of monetary policy direction.

I think the Fed has been pretty clear since the late 1980s. They will try to save financial markets and equity valuations every time there are signs of valuation risk. The problem is that it works until it doesn't. We've had two of the four worst corrections in the past 100 years under this policy action. We've also had the two longest bull markets, roughly doubling the length of prior long bull runs.

In my investment account I've opened new leveraged positions throughout the month as trends changed once again. Emerging markets and gold are particularly notable for their change in direction. In the emerging world I've jumped into Brazilian stocks (again), Chinese stocks, and Indian stocks.

A trade I definitely missed was long-duration Treasury bonds. First, from last October through May, they were inversely correlated to equities and would have made a nice hedge to the losing periods in that time. Now they are correlated with stocks, complementing returns even more. Crazy! My large short-term bond holding had similar moves, but the intensity was naturally much more subdued.

In June I continued to hold U.S. stocks in our registered accounts as per the Dual Momentum signal. My registered accounts make up a little less than half of our total investment account values while the rest is invested in short-term bonds and a trend strategy which I share weekly.

In my trend investing account I made a number of trades, getting into gold, European stocks, Brazilian stocks, Indian stocks, and Chinese stocks.

In May, we finished the month with a total of $666,012 in our investment accounts. If you recall, we had a steep loss of -9.78 percent that month.

This past month I held off on new contributions again. Our cash flow has gone a little crazy as we are setting up accounts for our move, I quit my job, and I want to make sure we have enough cash on hand to close our obligations in Canada before we move.

We saw a positive monthly investment return of +2.42 percent on our portfolio. We are about 9.5 percent off of our portfolio highs.

I hope through sharing our real numbers you will be inspired to start saving and investing young—it pays!

The Current Numbers

Here are our current Investment Assets as of the last trading day in June. We invest in TFSAs, RRSPs, and a non-registered joint margin account. You can keep track of our total investment assets and returns on the About Daren page.

We use a version of Dual Momentum and a moving average/breakout trend strategy to determine what we buy and when we sell our positions. I often employ leverage in positions, so our results tend to swing a bit more each way than the underlying indices.

January 1 of the current year is in brackets to help illustrate the change during the current year. Net Worth Change reflects the total increase/decrease of this past month including new contributions.

The Investment Return is the gross 12-month return on our investment positions, corrected for new contributions at the end of each month. Due to the end-of-month adjustment, the true rate of return on a daily adjustment basis would be slightly different dependent on the intra-month return on the new contribution.

Total Investments: $682,116  ($745,462)
Monthly Net Worth Change: +$16,104
30x Rule Safe Annual Income: $22,737  ($24,849)
12-Month Investment Return: -5.21 percent

Background Story

My wife and I are in our late-20s. I am a former law enforcement officer who is currently taking a break from the world of work. My wife is a public school teacher. We don't earn enormous salaries, but by keeping our spending under control we save a large portion of our incomes each month.

Our Investment Assets are completely the result of our own hard work and the returns we've seen on our investments; we have not received any gifts or won any lotteries.

While we both worked in pension careers, for this purpose we don't include pension values in our net worth nor pension contributions in our savings. Our investment assets and contributions are from our net paycheques.

We invest primarily with index ETFs, LEAPS options, and futures contracts using a dual strategy portfolio that I personally developed and maintain. To keep our investing costs as low as possible, I use Questrade and Interactive Brokers as my online brokerages. Questrade is my go-to choice for registered accounts. Interactive Brokers offers powerful tools, low commissions, and low margin interest for our joint margin non-registered account.

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Net Worth Update: May 2019

Monthly Summary

May 2019 saw a definite shift in sentiment for stocks. The S&P 500 made a new high on the first of the month, but has come down since then. The breakout at the end of April is looking more like a false breakout—barely pushing past the September 2018 high and then falling quite rapidly. In the technical parlance this can be the start of a double top pattern. Normally this is indicative of increased risk for further downside in stocks. Some key areas to watch in the S&P 500 are 2650-2600 and 2400-2350.

In other market categories, U.S. small caps and developed markets are looker weaker every day, emerging markets have totally broken down, Treasury bonds are rallying big time, and even gold is starting to look alive with a push over $1,300 per ounce.

Something very interesting to see right now is the CNN Fear & Greed Index.

Credit: CNN Business

I'm amazed that investor sentiment has shifted so quickly. We are less than 10 percent off all-time highs (on U.S. Large Cap stocks) and investors are on the verge of completely freaking out. To me this is either an indication that investors are extremely fragile or this index is a gross miscalculation of what investors are really thinking.

In May I continued to hold U.S. stocks in our registered accounts as per the Dual Momentum signal. My registered accounts make up a little less than half of our total investment account values while the rest is invested in short-term bonds and a trend strategy which I share weekly.

In my trend investing account I made a number of trades. The market is in the middle of a shift in trend directions.

In April, we finished the month with a total of $738,168 in our investment accounts. If you recall, we had a gain of +3.42 percent that month.

This past month I held off on new contributions. Our portfolio was down quite a bit, a combination of falling markets and leverage with exits on many positions near the end of the month. We saw a negative monthly investment return of -9.78 percent on our portfolio. We are about 12 percent off of our portfolio highs.

I hope through sharing our real numbers you will be inspired to start saving and investing young—it pays!

The Current Numbers

Here are our current Investment Assets as of the last trading day in May. We invest in TFSAs, RRSPs, and a non-registered joint margin account. You can keep track of our total investment assets and returns on the About Daren page.

We use a version of Dual Momentum and a moving average/breakout trend strategy to determine what we buy and when we sell our positions. I often employ leverage in positions, so our results tend to swing a bit more each way than the underlying indices.

January 1 of the current year is in brackets to help illustrate the change during the current year. Net Worth Change reflects the total increase/decrease of this past month including new contributions.

The Investment Return is the gross 12-month return on our investment positions, corrected for new contributions at the end of each month. Due to the end-of-month adjustment, the true rate of return on a daily adjustment basis would be slightly different dependent on the intra-month return on the new contribution.

Total Investments: $666,012  ($745,462)
Monthly Net Worth Change: -$72,156
30x Rule Safe Annual Income: $22,200  ($24,849)
12-Month Investment Return: -6.79 percent

Background Story

My wife and I are late-20s professionals working in the public sector. We don't earn enormous salaries, but by keeping our spending under control we save a large portion of our incomes each month.

Our Investment Assets are one hundred percent the result of our own hard work and the return on investments; we have not received any gifts or won any lotteries.

While we both work in pension careers, for this purpose we don't include pension values in our net worth nor pension contributions in our savings. Our investment assets and contributions are from our net paycheques.

We invest primarily with index ETFs, LEAPS options, and futures contracts using a dual strategy portfolio that I personally developed and maintain. To keep our investing costs as low as possible, I use Questrade and Interactive Brokers as my online brokerages. Questrade is my go-to choice for registered accounts. Interactive Brokers offers powerful tools, low commissions, and low margin interest for our joint margin non-registered account.

Comments & Questions

All comments are moderated before being posted for public viewing. Please don't send in multiple comments if yours doesn't appear right away. It can take up to 24 hours before comments are posted.

Comments containing links or "trolling" will not be posted. Comments with profane language or those which reveal personal information will be edited by moderator.