Net Worth Update: April 2019

Monthly Summary

April 2019 saw a continuation of the upside in stocks. The S&P 500 made new highs which is typically a very positive signal for stocks. U.S. small caps have not been able to keep up, still lingering well below their all-time highs. Emerging markets continue to show strength, coming strongly out of their 2018 slump.

With the changes I made to trading the VIX, I saw a nice profit this past month. Time will tell, but I may be onto something with the modified strategy I am using here. I am still trading VIX with small positions until I have a better handle on the performance.

This past month I have continued to do a lot of work with all my models, putting a lot of time into their continued development as I try improve my investing and create more dynamic systems. I took some time away from my day job in April and it has been extremely productive. My day job in the public sector is fairly demanding and follows a shift work schedule, so it can be limiting in the amount of time I can dedicate to my financial projects.

In April 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 March, we finished the month with a total of $718,617 in our investment accounts. If you recall, we had a loss of -2.77 percent that month.

This past month I had to take a little money out of our investment account to pay for a tax bill. I don't like to give the government an interest free loan, so my goal is to always owe some money in April. This naturally took a little bite out of our net worth numbers. However, we generated a positive monthly investment return of +3.42 percent on our portfolio.

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 April. 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: $738,168  ($745,462)
Monthly Net Worth Change: +$19,551
30x Rule Safe Annual Income: $24,606  ($24,849)
12-Month Investment Return: +3.37 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.

Comments & Questions

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4 Replies to “Net Worth Update: April 2019”

  1. Do you follow DM in both your RRSP and TFSA accounts or do you differ approaches between the accounts to reduce correlation? Also do you, or plan to, invest your TFSA more aggressively than your RRSP as growth in the former is tax-free?

    1. Daren (Editor) says:

      Both RRSP and TFSA are invested exactly the same way in a Dual Momentum strategy. I don’t personally practice the idea of investing more aggressively in TFSA, rather I look at total net worth and invest very aggressively at times in both accounts. My level of aggression (leverage) in these accounts is a bit of a judgement call based on risk/reward given overall economic conditions. The standard is holding the recommended signal in a standard ETF. If the risk/reward situation is very positive I am happy to invest more in leveraged ETFs as well.

  2. So at times you may have an allocation above 100% equities as a portion of your portfolio in your registered accounts will be in a leveraged ETF.

    Have you ever considered moving your registered accounts to Interactive Brokers as well so you could use margin to increase exposure instead of leveraged ETF’s? Isn’t there a higher risk associated with leveraged ETF’s – can’t recall the exact reason – perhaps the larger drawdowns or the daily rebalancing within the ETF?

    1. Daren (Editor) says:

      I wouldn’t use margin in a registered account because the interest rates are generally higher and not deductible from taxes. Leveraged ETFs are a better option, when used appropriately of course. The academically driven fears of daily rebalanced leveraged ETFs is largely unbased. Yes, it is crazy to put 100 percent of your portfolio in a 3x leveraged ETF. It is not crazy at all for an aggessive, knowledgeable investor to put 25 percent of your portfolio in a 3x leveraged ETF and 75 percent in a regular ETF in order to target ~150 percent market exposure (example numbers only).

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