Investment updates July 2020
We are well into a crazy year, by now its a good time to examine how my investments are doing. Hey so if you are reading this from the future… as the title states: This will be a brief rundown of investments in the jaw dropping year of 2020.
In midst of a pandemic which pricked the stock market bubble to finally correct itself a bit. A couple months later an online video surfaced that sparked another civil rights movements, all leading up to the November American elections. It’s pretty unfathomable how so much can happen in one a particular year. Now in this day an age it is all very much visible and easily accessible via the internet.
Enough of that let’s see the graph:
Actual numbers removed for ahem privacy
Investing Strategy:
As much as a numbers and systems kind of guy I don’t have the time or attention to be sifting through individual companies financial statements or have the tolerance and emotional stability to watch the news every waking hour. We all can agree news is designed to grab your attention. The best way to grab your attention is through fear mongering.
There is value going with the way of Value Investing here, but this isn’t the method I used to structure my current investment portfolios. When I have some extra time to do my research and $$ that I am ok parting with I would invest that into some blue chip stocks.
Instead, what I practice is as I described earlier this year when the market went bonkers is dollar cost averaging over index funds. I have systematically setup two process/habits when it comes to my invesments:
- I set a frequency over when I invest. My cadence is the first of every new month. This becomes a habit.
- The amount invested is always the same, no less, maybe more when my income rises. This puts the practice of “paying yourself first” before my mandatory and discretionary expenses
- These investments are made in the mindset that I will hold onto these until retirement time. IE: when my modes of passive income can cover all my expenses. Therefore being able to leave mandatory employment with a breath of ease.
So, by applying these principles over Index Funds/ETFs I don’t need to watch the world closely. I didn’t hesitate to sell anything off when the market responded to the first wave of the pandemic. (Granted this only works while I have a means of work and income).
Trends
With my two accounts I hold onto a different spread of index funds. Basically they will mimic the stock market. This isn’t a strategy to win big. Sorry for all the folks who want to make quick $$. Starting September was when I started tracking the amount and it steadily increased with my monthly contributions and following the market.
*Please ignore the sharp dip at the beginning of January. I was finishing the processing of moving my accounts over, before then I had two of the same account and wanted to consolidate them.
We see a slighter dip in April (When Rona hit). Looking at the raw graph, it doesn’t look much hey? With my habitual contributions and resistance to make any panic decisions I am well on my way.
Ending thoughts
I am glad to see that with deliberate action, habitual practice and oversight over my personal financial situation that I am in a comfortable place. However through this rough patch I have come to realize that the stock market is not a metric of how to economy or society is doing. In fact it feels weird… There are permanent job losses, business closures, consumer’s preferences have shifted and the way people work and live have fundamentally changed.
In the dumbest terms… Western society is in a bad state, but it doesn’t reflect in the stock market. Economics is only one metric to gauge society and I feel too many people (Myself included) view the well-being of a country in those lens. Some experts say that the West is in a crisis of meaning.
Part of why I pursue the FIRE path is to determine meaning and whats most important in my life. I freely advocate this philosophy to everyone as a reminder to live intentionally, audit their own behaviours and biases on money and figure out what money means to us when it comes to happiness and meaning.
It is a thought that has been going in my head for the last little while. I am reaching out to you and others just to get the ideas across and worked out. I can’t quite work this out properly in my head nor in words of this intuition.