Net Worth Update: January 2018

Monthly Summary

2018 has started off with a bang! This past month we were quick to top up both of our Questrade TFSA accounts ($5,500 in each one). The stock markets have roared ahead this month as well.

I had to laugh when people started calling the next correction after just two consecutive down days near the end of a really profitable month. Who knows, January 26, 2018 might be the peak of the 2009-?2018? stock market run... but it's absolutely nuts to make that prediction after just two down days. Right now, all anyone can say with certainty is the trend is most definitely UP!

Thinking about the mini-panic and doom forecasts of the past few days, I realize our portfolio has never gone through a major downturn yet. Our biggest drawdown was around 16% in the 2015 market correction. (I started investing after the 2007-2009 crash and our investments were tiny in the 2011 correction.)

In the past few months, I've done a lot of market research, back-testing, and fine-tuning our investment strategy. I am confident that we can handle pretty much anything that comes our way.

Having predetermined selling points is very important in our strategy. Our portfolio is running very hot right now with nearly every position using 2x leveraged index ETFs or purchasing ETF positions using 2:1 initial margin.

I stuck my pledge not to dive into my investment accounts more than twice this month. However, I realize I'll probably need to log into my accounts once a week.

With the big upwards move of the past month, my stops got a little too far away from the price. By the end of the third week of January, my positions were up around 10% on average and I had not adjusted my stops up at all. That's a bit silly, but nothing a weekly update can't fix.

The move to Interactive Brokers has gone very smooth so far. The transfer of our positions was easy and I am enjoying IB's more technically advanced systems. I only placed one order so far, but I was happy with the order system, speed of the execution, and the price.

I can't comment on the tax situation yet as I have not received my tax slips for 2017 in my Questrade account. That said, I did an in-kind transfer using the ATON system, so there shouldn't be any tax issues.

After the transfer, I was able to update my position cost on the Interactive Brokers site, so proper reporting should not be a problem when I sell the transferred positions.

In December 2017, we finished the month with a total of $670,856 in our investment accounts. That was up a massive $230,000 for the year with a 35% investment return. The larger the accounts grow, the bigger the impact of the investment returns. At this point our monthly contributions seem to barely make a dent, but I recognize they are still important!

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 January. We invest in TFSAs, RRSPs, and a joint margin Account. We use a trend investing strategy to determine what we buy and when we sell our ETF positions.

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:  $739,108  ($670,856)
Net Worth Change:  +$68,252
30x Rule Safe Annual Income:  $24,637  ($22,362)
YTD Investment Return:  +8.53%

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 100% 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 using a trend strategy 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 account.

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