It turned out that February 2019 was a pretty bland month as far as the markets go. You could almost hear a breath of relief as the markets didn't repeat last year's pattern of a great January with a nerve wracking correction the very next month. In 2019, February went straight up.
We are starting to see some overbought conditions in equity markets (which shouldn't be surprising after the post-Christmas rally we've had). This is most noted in U.S. markets. We often see some buying exhaustion after these conditions. It could look like a sharp price pullback, or simply a pause in market appreciation.
There's a lot of talk going on about "bear market rallies", "bull traps", "Fed puts", and so on. These amount to vague, predictive statements. They are often made by people who sound very sure of themselves, despite a track record of their statements being likely to fare worse than a coin flip.
I think it is important to ignore this talk and focus on the facts. Right now the markets are going up—nearly across the board. Plus equities are in an uptrend across many metrics. That means most investors should be invested with the appropriate risk controls.
If you have tracked my weekly update posts, you will note I took a few new positions in February. This included KWEB, the Chinese Internet companies ETF, and DXJ, the hedged Japanese stock market ETF. I believe this is a reflection of the diversity of this uptrend we are in currently.
In February I held bonds in our registered accounts as per the Dual Momentum signal. I am currently holding both short-term and long-term bond ETFs.
In January, we finished the month with a total of $753,641 in our investment accounts. If you recall, we had a small gain of about +0.16 percent that month.
In February, we generated a negative monthly investment return of -2.86 percent on our portfolio. I added some money to RRSPs and our non-registered account.
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 February. We invest in TFSAs, RRSPs, and a non-registered joint margin account.
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 total year-to-date return on our investment positions, corrected for new contributions at the end of the 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: $739,105 ($745,462)
Monthly Net Worth Change: -$14,536
30x Rule Safe Annual Income: $24,637 ($24,849)
12-Month Investment Return: -1.35 percent
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 100 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.
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