Net Worth Update: January 2019

Monthly Summary

January started off the year with another volatile month, but this time moving up all the way. Since Christmas, global stock markets have moved only up and almost all in unison. It shows an impressive start to the year, almost reminding me of January 2018.

At this point I think it's very difficult to say if the market is going to rip upwards and make new highs, or if this is simply a strong short-term rally and markets will slide down once again. Either way, things are somewhat exciting and this is certainly making the talking heads spin.

I think it's important to note that the S&P 500 and MSCI ACWI have not actually gone into traditional "bear market" territory. The correction was steep, but I don't think we can consider it a major event. The economy seems to be strong, interest rates are moving up, and confidence is still quite high.

As I shared in a prior post, I took a position in Emerging Markets as they rebounded. From January 2018, Emerging Markets as a whole fell -27 percent in U.S. dollar terms. Some of the individual markets fell much more. It will be interesting to see where these markets go over the next year.

I've also taken positions in a number of other areas: upside in Brazil stocks and the Brazilian real, upside in U.S. small caps, upside in the South African rand, upside in the Mexican peso, and downside in medium term volatility. With lots of changing signals, it's been an active month for me.

In January I purchased bonds in our registered accounts as per the Dual Momentum signal. I split my purchase between short-term and long-term bond ETFs. Also, I'm sticking with Canadian-listed ETFs for the time being.

In our non-registered account, I have exposure to gold and silver, Brazilian stocks, the real, the rand, the Mexican peso, U.S. small caps, emerging markets, and downside volatility.

My cash position is in U.S. dollars and there is still a significant amount of unused cash that I can access for more trading opportunities.

In December, we finished the month with a total of $745,462 in our investment accounts. If you recall, we had a decent gain of about +0.7 percent that month.

In January, we generated a positive monthly investment return of +0.16 percent on our portfolio. We also filled both of our TFSAs, although I will only count part of the contribution in this month as we already accounted for some of it in December's numbers.

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 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:  $753,641  ($745,462)
Monthly Net Worth Change:  +$8,179
30x Rule Safe Annual Income:  $25,121  ($24,849)
YTD Investment Return:  +0.16 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 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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