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.

Comments & Questions

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Net Worth Update: December 2018

Monthly Summary

December saw a continuation of the market declines and market volatility that we are starting to get used to. The S&P 500 hit new lows for the year, taking out the previous low of 2532 in February 2018.

Despite the falling pattern over the past three months, we're still just in a "market correction" as measured on the S&P 500 and MSCI ACWI (USD). However, at this point no investor can ignore that things are looking more dangerous. There is hardly a leading stock remaining that is making new highs.

If the U.S. market holds the uptrend since 2009, we're in a fantastic buying position. But be careful, the medium-term trend is down and things can get a lot worse in a hurry in highly volatile markets. Plus, a market with the valuations we've seen this year can take years to unwind.

While emerging markets seem to be holding a little bit above the October bottom, the MSCI EAFE developed countries are sinking fast. They are now at prices not seen since early 2017! That's two whole years of zero returns.

This past month I traveled with my wife to see our families over 1,000 km away. We're planning some skiing this week and have enjoyed a great time eating and drinking and celebrating this time of year.

We also spent a good portion of our evenings and weekends in December catching up with many of our friends. Parties, potlucks, chilly outdoor time, and some modest gift giving. I openly admit I've got a Grinch element in me when it comes to gifts.

In December I still carried a healthy allocation to U.S. stocks as per the Dual Momentum signal. Even the still-falling Canadian dollar couldn't save me this month so I saw a decent loss there.

In our non-registered account, I have exposure to gold and silver on the upside. I'm also betting against U.S. Real Estate and Natural Gas with long-dated put options. My cash position is in U.S. dollars and there is a lot of cash sitting there waiting to pounce on good opportunities.

In November, we finished the month with a total of $735,222 in our investment accounts. If you recall, we had a decent gain in excess of 1 percent that month.

December generated a positive monthly investment return of +0.71 percent on our portfolio.

Given that most of our portfolio is in cash, I didn't bother contributing to our non-registered account this month. I am holding the money in the chequing account to fill our TFSAs this month. But I will still include my usual contribution amount in my net worth 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 December. 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:  $745,462  ($670,856)
Monthly Net Worth Change:  +$10,240
30x Rule Safe Annual Income:  $24,849  ($22,362)
YTD Investment Return:  +0.44 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 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.