2010 Portfolio

Dear All,

Another year and more predictions. Having been very poor at contributing to the Invested Forum I thought my New Years Resolution this year would be to post my Investment portfolio on a monthly basis and see what interesting discussions this might generate.

This investment portfolio is a real portfolio of what I have invested but does not include my Investment Property Portfolio. I have been shuffling funds for a few months and as you will see the portfolio is not balanced as I would like it yet. I used to be very 'Anglo-Saxon' equity centric (as I am originally from the UK), but now I am more Emerging market and Commodity invested. This is primarily because I consider my IP's to be 'safer' investments leaving my cash to be invested in higher risk assets. It is my portfolio, and the reason I say "my", is that everyone has different circumstances and investment strategies. This portfolio is not a recommendation to anyone on where or how to invest.

The table shows my current holdings and my 'planned' holdings ..... based on todays 'emotional' status and thus the 'planned' percentages will change a little over time.

I hope that I will update this on a monthly basis.

January 1st. 2010.

Current : Planned
Cash 20.1% : 1%
Australia Large 18.9% : 25%
Fixed Interest 12.6% : 1%
US Large 10.4% : 5%
UK Large 9.6% : 9%
ChinaHK 5.7% : 8%
Asia 4.5% : 4%
Precious Metals 3.5% : 5%
Oil Price 2.6% : 3%
Japan 2.1% : 0%
Europe Large 2.1% : 2%
India 1.8% : 3%
Metal Commodity 1.7% : 5%
Agri Commodity 1.6% : 3%
UK Small 1.4% : 3%
Brazil 0.7% : 4%
Energy Commodity 0.4% : 4%
Russia 0.3% : 2%
US Small 0.0% : 3%
Global Tech 0.0% : 0%
Australia Small 0.0% : 10%

Regards,
Gunnerguy.

 

GG
Are you investing in individual company shares?
How did you manage to diversify and buy in so many countries?

 

Portfolio Vehicles

My portfolio is invested in a number of Invernational ETF's (& mutual fund) using UK and Australian brokers. I also have a small smattering of individual shares. The ETF's cover country equity indicies and three commodity ETF's. For example one of the Australian ETF's is IBK from ishares that covers the BRIC countries and I have a mutual fund that covers/follows Asian indicies

GunnerGuy.

 

ok thanks,

I'm mostly invested in property.
I only have 5% of my investment portfolio in Aust. shares and 10% still in cash

My super was also in cash until recently but I bought a property with it so 80% of my super is now in property and the rest is shares and cash reserves.

2009 must have been a good year for you.
It was ok for me.
good luck in 2010

 

Hi GunnerGuy,

How are you going to rebalance that lot? Have you got some whiz bang software!

A while back, I did a manual rebalance. Not fun.

May you have a happy outcome for 2010.



Johny.

 

Rebalancing

I am a converted index fund investor (ETF's) after 18 years of being a share holder and mutual fund holder.

I added some Brazil and some China this week.

Although I would 'like' to be a 'passive' investor I will probably adjust and rebalance relatively frequently as I build up to the percentages that I want. These percentage, however, will likely change as I am unable to ignire my emotions. Generally I like INternational, emerging and some commodities and precious metals, rather than simply large cap anglo saxon equities.

Rebalancing will not be too hard as I simply have an excel spreadsheet and update it once a week (takes maybe 1 hour). I will probably never get to my ultimate percentages as I would always like to have some cash around in case there is a drop and a buying opportunity.

In the recent crash one has to remember that ALL equity markets suffered between 50% and 75%, even commodities. The only ones that survived were gold and some binds. Trying to create a diversified portfolio so hat some go p when others go done is a bit tricky unless you invest in cash, short, medium and long term bonds and fixed interest. As I said at the start of this thread I have something like 80% in investment propertis and I consider this my 'fixed income' portion of my protfolio. The assets in this list are my 'risky' assets.

Lets see how we go.

Thanks for all your comments so far. As I said my New Years resolution is to comment/contirbute to this forum regularly. Keep the comments and questions coming - wee will al learn as a result.

Later .....

GunnerGuy

 

Hey GunnerGuy,

Why are you getting out of Technology Stocks?


Johny.

 

Global Technology

When I started to put this diversified portfolio together I started from looking at the IFA.com website and then made some personal adjustments based on my 'other' assets, ie. IP's. From that I then literally sat down and thought about all the other sectors, countries, etc. and came up with a list. The list had like ...... 50 different sectors & countries that I was potentially interested in including 'US Defence sector', 'US Helthcare sector', 'Global Technology' ut when I started to build a portfolio it became obvious that I couldn't cove all the areas I would have liked to. I do believe that having a diversified portfolio is good, however owning say 50 different trusts/ETF's/Funds etc. would make the portfolio almost unmanagable. It may however be OK if you only wanted to rebalance on a yearly basis. My general plan is to have a diversified index based passive portfolio that I rebalance .... whenever I have time/would like to. Economies, countries, currencies, stock markets are always moving and situations change so I do have the generly idea of tracking my portfolio on a weekly basis but also adjusting the required percentages as I see fit based on Global/Market conditions, eg. Argentina has just devalued it's currency.
As for Global Tech. It is on my list but as time went by the amount I looked to invest became smaller and smaller. This was based on:

1. My personal expectation that the US dollar will weaken over the next few years so even if I make say 20% stock price gain in a year, if the currency drops by 25% I will loose out.

2. Also most funds I have access to mainly focus on NASDAQ and do not really give a global coverage. I was almost looking for a non US TEchnology fund. There are ome European Technology ones but can't find any Asian/Indian/Chinese focussed technology funds.

3. I am not sure (since I am not a fully fledged techy) which part of technology I am interested in, ie. semiconductors, mobile technology, biotechnology, infrastrusture, software. I think it is probably too late to invest in Microsoft/Google/Yahoo/AMD/Intel. Yes all these companies will continue to be cash cows but maybe not real growth companies in the future.

Pharmaceutical and bio-technology sectors wee also on interest to me.

Unfortunately one cannot cover all countries and all sectors that one would like but I do agree that Technology should be in there.

Gunnerguy

 

How are your properties holding up? Do you have any in Malaysia? Property in Australia is at an all time high. When do you think the bubble will burst?



Johny.

 

Emotions & ETF's

Well we are a month in to the year and my emotions are starting to get a little bit worried. The $US has turned in recent weeks, commodity prices have declined and many of my ETF's are on or below their 200 day moving average. Brazil and China have declined and things are not as rosy as they were 3-6 months ago. Personnaly I am taking a little bit off the table and waiting to see what happens. This is fine as it will save me a few dollars on the IP Loan since it will sit in the offset account.

Having had discussions with a couple of my extremely experienced market analysts and read some scary stuff (marketoracle.co.uk, financialsense.com, safehaven.com) I am thinking of reducing my risk exposure. Not sure how much or for how long but I have added cash (dollar cost averaging) over the past 18 months and think it is time to hold back a little.

Since the RBA did not increase rates this also suggests that they know something that we don't, and it is not simply about the problems of higher interest rates to the first time buyers who took the honeymoon rates and the $14,000 subsidy.

An interesting article on Australian Housing Market worth a read : www.marketoracle.co.uk/Article16958.html - enjoy.

Be careful out there - Investment profits are nice, however Wealth preservation also has its advantages.

GunnerGuy.

 

Birthday Update

Well I got spooked last week. Greece problems, and all that. Market seems a bit flat and there is still talk about a double dip recession Globally but maybe not in Australia. I did a lot of selling. I have kept my Australian stuff, added a bit of Gold, sold my Emerging Market stuff but definatelt want to go back in when my emotions are better.

Current Portfolio

February 19th. 2010.

Cash 40%
Australia Large 20.4%
Fixed Interest 12%
Precious Metals 5.4%
China/HK 5.2%
'Asia' 5%
US Large 3.8%
UK Large 3.7%
UK Small 1.3%
EnergyCommodity 1.2%
Europe Large 1%
India 0.8%
Brazil 0.2%
Russia 0.1%

As I try to focus on ETF's and I have been watching the 50 day and 200 day moving averages and many of these are now getting below the 200 day.

GunnerGuy.

 

"........ and many of these are now getting below the 200 day."

and...what are you going to do about it

 

Hi GunnerGuy,

You must of really been spooked, you've dumped 6 funds. Have you forgotten about your original 'planned' asset ratio? Were you taking on too much risk with your former portfolio? Perhaps a higher allocation to bonds to get you through the tough times.

You now have 40% in cash. In the future are you going to buy up big, or in parcels?

I've never been a gold buyer(no dividends). It strikes me as a fear commodity. So many people buy for tough times, but only get 10%. If times are really going to be that hard why not 90% gold?




Johny.

 

Gone Cautious

 

Diversify

My original December/January portfolio setup was, in hindsight, after the 'market' had gone up over 50% since March 2009. True it was developed as a long term portfolio, however I do think that going a 'bit' safe for a wee while for me at least is good. 40% cash, 12% fixed interest, and 20% in Oz shares (China & Asia trade opportunities, commodities etc.) is in my opinion a bit safe, but not scared and out of the market.

As for bonds, yes these may well save your capital, but they will also move when interest rates go up (ie. 'safe' Tresury bonds') and the resulting 'Commercial/Corporate bonds value will fall in order to gain their respective 'riskier' dividends.

Gold, yes no dividends, however it has given better investment returns over the last 10 years compared to certain/some/most equities.

Yes I will drip in and out in parcels. Still not a buy and hold market, especially now after the 2009 rises..... IMHO.

You would have to be a brave man to put everything in equities now, close your eyes and come back in 5 years, however as a gambling man I think that in 50% gain ie. 10% per year is achievable. Why don't I do this if I think we will get 50% in 5 years .... because I think I may be able to get more when buying in the dips.

GunnerGuy.

 

test

I wrote an update but it was not posted.

 

Hey GunnerGuy,

Whats happening in your neck of the world? Have you changed your portfolio lately? Its like a slippery slide at the moment in Oz! But I guess everything is being hammered at the moment.




Johny.

 

Portfolio Update

All,

I have not done well in updating the forum on my portfolio. I did make the New Years resolution of contributing more to this forum. I do visit on a weekly basis and read a lot of the posts but sadly do not contribute. Here is my 2 cents worth on how my investments have faired.

My current Net Assets comprise:

Four IP’s which combined have a LVR of 30%. I have a lot of equity in these and combined they are positively geared. Although the dollar value of the loans are high, the offset accounts are very cash rich. I set this up deliberately so that should I wish to invest in other assets like more houses or shares I would already have cash available on hand at an interest rate the same as my loans.

When managing my assets I ‘assume’ that my IP’s are ‘safe’ investments. Now before you all start telling me about property bubbles in Australia etc. (and I probably agree with you) the reason I consider them safe is because they have increased in value over 150% since I bought them 10 years ago, my LVR is low, and they all have good rental income. These are my ‘core’ asset holding that even if they drop by 50% my return on them should I sell them would be better than fixed interest/bonds/CPI.

My remaining assets, about 26% of net worth, are considered to have various levels of risk, which I am generally happy with and have a diversification as follows -

Cash 27%
Gold/Precious 14%
Australia Large 19%
Fixed Interest 8%
China/Hong Kong 8%
‘Asia’ 6%
UK Large 4%
US Large 4%
Energy Commodity 1.5%
Metal Commodity 1.5%
Oil Price 1.5%
Brazil 1.5%
Europe 1%
UK Small 1%
India 1%
Russia 0.5%
US Small 0.5%

On a Harry Browne portfolio basis this works out roughly as:

Cash 27%
Equities 46%
Precious/Commodities 19%
Bonds 8%

At the beginning of the year I was Bullish on equities and had a big planned diversification. My emotions have taken hold with the affects of interest rate rises, Greece, and Europe however I have dripped in to STW and GOLD in Australia. Also small amounts in Asia and China. Bought ETF’s in S.Korea, Taiwan. I want to stay low in US and UK/Europe. I do like the BRIC’s and want more of India. I was Bullish on commodities at the start of the year but they have come off a bit recently. I need to keep my focus on diversion and in my opinion just drip in slowly and at lows if one can see them as lows. I spend over 20 hours a week reading articles and opinions on Global economics, Elliot Wave, Krondrite waves, technical indicators, macro economics, currency fluctuations, housing bubbles, US jobs problems and Oz superTax …….. and overall I am closer to the doom and gloom theorists than the Growth media (CNN, CNBC, Wall Street, etc.). Changes in markets I believe can now occur quickly and violently as news breaks of the next unreported financial debacle. I use to believe in bottom up investing through financial analysis of accounts etc. however I don’t really believe anyones accounts anymore. I am an index investor with minimal true stock holdings. I believe in Gold in the long term and emerging markets. I also believe that there is a strong possibility that markets of all sorts can be manipulated by the big banks. Remember the ‘flash crash’ in the US a few weeks ago. But I am most worried that the ‘West’ will have a double dip recession when you read the housing numbers in the US and the unemployment.

So at the moment I am a little bit worried and hold a reasonable amount of cash. Happy to have my largest holdings in Australian ASX200 STW, some Gold and if prices increase I will probably continue to buy. Being patient with commodities and possibly waiting another 3-6 months before being I am comfortable to increasing my holdings. Adding to emerging markets. Basically slowly, slowly, catchy monkey, drip, drip, drip. I planned to be a passive investor for 2010 onwards, however I do adjust my holdings probably on a monthly basis or more with a small amount of ‘gambling money’ used for shorting or ultra ETF’s.

One big plan in the next 4-6 months is to reduce IP’s from 4 down to 2 so I am not 74% in housing and increase my diversification away from houses. With my low LVR I will probably be far too cash rich in 4-6 months and have to decide what to do. Not sure yet but with possibly job changes for me and kids schooling I think overall having more cash around will make me feel more comfortable.

Enough rambling for the moment.

All the best.
GunnerGuy

 

Hi GunnerGuy

Your overall weighting hasn't change That much since your last posting, except maybe cash, precious metals, FI and china.

How do you get coverage of India alone? I have some BRICs funds, but I want to specialise.





Johny.