NET WORTH Q1 2020

Please note: Ultimately content in this post (and blog overall), is just my opinions, approach and/or thought process. This is personal information, and should not be counted on as financial advice. 

Well, what a few months it has been…. Like most people globally, I remember only a few weeks ago sitting in a bar, having a beer, shooting the breeze and talking with my mates about this novel coronavirus, or as it is now known globally Covid-19.

The share market was crowning at the top, pushing past previous records to enter new territory.  Albeit a little fool-hardly.  It took a few weeks for sentiment to change and the tragedy unfolding in Italy and Iran to start to make people really take a breath.

Seeing what was happening in China, was personal for me as there was a trip planned to Shanghai in May…  Well obviously that isn’t happening now.

And wow, how quickly things have changed since the beginning of March.

Countries across the world including Australia are now in some form of lockdown.  The US of A, is the next ‘hot spot’ for the virus and news changing almost every minute.

The share markets unsurprisingly don’t know how to react to the news each day, as it is evolving at such a rapid pace.  Some good news, some bad, some terrible…  It is and has been a rollercoaster.

Things that would have been ‘impossible’ and laughed out of a room now seem not just possible but do-able.  With the Liberal Party here in Australia announcing a JobKeeper Allowance of $1500/fortnight, with the aim of keeping as mainly people as possible ‘connected’ or ‘linked’ to their employer, rather than lining up for the dole.

What is happening on the share market?

As the governments around the world closed borders and tried to hibernate their economies, the share market collapsed.

The Down Jones Industrial Average, went off a cliff:

Movement of the DJIA between January 2017 and March 2020 (Source: Wikipedia)

As you can also see, the ASX 200 didn’t fair much better:

ASX 200 – Last 5 Yrs (Source: ASX)

The Wikipedia page for the 2020 Stock Market Crash has a decent timeline of events (linking for for future posterity).

The Federal Reserve in USA, and Reserve Bank here in Australia then stepped in to purchase more bonds and roll out more Quantitate Easing – the share market has since held (if not moved slightly into bull-mode again +20% in March).

I am not sure if we have actually stabilised yet, but as economies start to reopen again, albeit with some restrictions still… Will the market continue its run?  Or will something else knock the wind out of the sails?

My Q1 Update

Starting with overall Net Worth, firstly you can see a spike in Q419, this is due to me changing the mix of shares/bonds in portfolio.  Essentially the ‘plateau’ was me holding cash for a little over a month, while selling all my shares in SSO, IEM & PMGOLD. 

I then ‘swapped’ into VAS (Vanguard ASX300 Total Index) a month later.  And from December 19, you can see a sharp bump in overall net worth, as the stock market went on an absolute bull run in January.  And then abruptly dropped in February… 

This Net Worth graph, shows all my assets (including Super):

Total Net Worth
(start of tracking was only start of 2019, pre-2019 is estimate)

In this next chart, you can see the drop in Total Value (where I ‘cashed out’ as mentioned above) in October.

Investment Portfolio (excl Super & P2P)

This change in Q4 2019, was due to me analysing and trying to define my investment strategy.  Which saw me move to a move aggressive plan (ditching PMGOLD and IEM Bonds). 

Now the makeup of portfolio is four ETFs: VAS/AFI for Australian exposure and IEM/NDQ for International Exposure.

Share Price/Value of Stock in Portfolio

As you can see from this one, the lion share of my net worth is being held in Super/Pension.

And then the breakdown of Net Worth, excluding Super. 

In the below, you will see that Emerging Markets (this is IEM) and International (is NDQ).  At this stage, I have been buying more IEM recently as the price has dropped since I first bought it, whereas NDQ has continued to rise.

Breakdown by Asset

P2P Lending in the COVID-19 Shutdown

Due to the uncertainty in the market, I will be very interested to see how the P2P Lending Platforms go… I am still investing in them, and haven’t withdrawn any funds.

At time of writing, around 1/2 the loans I am selected in TruePillars are on loan deferment, meaning the business has agreed a repayment deferral.

Ratesetter has seen the interest rates for 1mth, 3yr and 5yr markets jump.  I am seeing +7%pa consistently now even for the 1mth market, which was getting as low as 2-3% in January…

I am not 100% sure why the jump…  

My assumption is two parts.  Firstly due to increased risk/uncertainty, and potentially people withdrawing their funds from the platform (I assume it is kind of like how Uber Surge Pricing works).

That is just my hypothesis though…  If someone knows, please let me know in the comments below! 

For now, I am holding firm.  Though most of the monthly investment $$$ is being rerouted into my shares though, with just the repayments being reinvested.

Wrap Up

So that is Q1 2020 in review… Very odd time and after a bit of panic, I feel most people are seeing opportunity.  Unfortunately not everyone can take advantage.

But hopefully the lock downs will be over soon, and we can get back to some level of normality soon… 

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