What a mess this blog has got us into – my Aug ’15 investment returns

I started this blog barely three months ago, and no sooner have I started it than my portfolio has just seen two of the worst months since I started tracking it systematically over three years ago.  June saw my invested portfolio drop almost 4%; I had a partial rebound in July, but now August has seen me drop by 4.4%.  My annualised percentage over 2.5 years has dropped from 12% to 9.8%, my maximum drawdown (peak to trough) is now -6%, and my Sharpe ratio (a measure of return for a constant level of risk/volatility) has dropped from almost 2 to close to 1.  Maybe my new blog has jinxed the global markets….

… and if it has, maybe I should start another blog.

In fact I am pretty thrilled with August.  My invested portfolio is down 4.4%, yes, but in fact this is great news for two reasons.

First of all, the overall market (weighted by my target allocation) is down over 6% (equities in Australia, USA, and ROW down between 8 and 11%!), so I am outperforming.  I wish I could give give fantastic reasons why I am sure to outperform, and I can’t, but in general terms I outperform more frequently than I underperform and I’m happy that this happened in such a volatile month.

It was certainly yet another great month to be in bonds.  UK bonds fell by about 1.5%, USA bonds by 0.1% and ROW by about 0.6%; in the scheme of things these were good things to have.

In addition, my active positions generally fared better than the passive market – largely because I tend to be underweight on commodity stocks, Asia, and such like.

The second reason I’m pretty chuffed with my 4.4% dip in August?  Well, the wider market may be down by more than 6%, but almost every company in it is worth, in my view, the same as it was worth a month ago.  Which means that Mr Market is offering me a 6% special offer.  Happy days.  If only I had more money in my wallet. I accept that some particularly Chinese-focused businesses (e.g. HSBC, Prudential, Aberdeen Asset Management) now look less valuable than they did a few weeks ago. Maybe too the German automobile companies.  But 3M?  P&G? Bank of Nova Scotia?  Come off it.  A bunch of blue chip S&P 500 companies, even some Dividend Champions, are yielding 3.5% or better right now.  So I’m trying to fill my boots, and as I hope to have a few more decades left in this game, long may these conditions continue.

3 thoughts on “What a mess this blog has got us into – my Aug ’15 investment returns”

  1. I couldn’t agree more. Looking forward to traditional September volatility for more opportunities to pick up some great stocks on what is essentially the sale of the year!



  2. Im with you on this – as you say I just wish I had more ready cash! There are some cracking options out there on a discount right now, and with drip feeding I can get some nice values, lets see how this mornings market opens!


  3. Hey FVL,

    This will be the first market dip I’ve seen in my albeit short investment career so I was wondering how I’d cope with the recent turbulence. So far so good, all the rhetoric that’s been beaten into me about staying the course and waiting it out seems to have stuck and I’ve haven’t had any twitches to sell.

    That’s some great looking returns considering everything that’s been happening. I’ve only just started reading your blog so I’ll be having a good old nosey through to see how you pick your assets allocation and companies. I’m in beginner index fund myself so no beating the market for me. I’ll just have to wait for a market rebound at some point in the future. Unless it want’s to stay low for the next 15 years, that’d suit me fine!



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