Month: January 2016

Housing, pt 9: three sets of bad news

FIRE v London9 Comments

In the ongoing saga which is my attempt to raise an absurd amount of cash to buy a few hundred square meters of Dream Home in London, I have had three bits of bad news this week.

At the start of last week I thought that I had pretty much sold everything I needed to sell.  I’d only just become a ‘forced seller’, which saw me liquidating for example some FTSE-100 stocks at a FTSE of around 5900 – around 5% below the level I entered this process at.  I had three things to do: collect cash from assorted bank accounts, confirm my margin loan, and sell one particular asset.

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Stock market bloodbath?

FIRE v London1 Comment

I’ve been paying close attention to equity markets over recent weeks, as I rebalance my portfolio to help me to buy a house.  I’m struck by how badly numerous stocks have done since their 2015 highs.

The major markets overall are essentially flat on a year ago (UK down 1%, US up 1%, Australia up 3%).

But calling 2015 flat ignores the fact that during the year we were treated to some significant gains, before sharp drops in August and December.  FTSE-100 breached 7100 (now at 5960), S&P got to 2130 (now 1923), ASX-200 rose 10% to almost 6000 (now 4925) and DAX reached 12,400 (now 10,000). Overall then the markets are 15-20% down from their peak. This decline is between a third and half of the declines experienced in 1987, 2000-2 and 2008-9 (the UK copped it worst in 2000 and the US’s worst bath was 2008-9).

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Revising my 2016 margin loan goal

FIRE v London5 Comments

I posted recently about my proposed 2016 goals for my portfolio.  On reflection, I think I need to rewrite the first goal – about the loan that I am taking out against my portfolio.

In my article I suggested the goal about my portfolio loan was: “Continually reduce my margin loan’s Loan-To-Value (LTV) ratio“.  On reflection, I don’t think this goal works, as the market’s recent declines have illustrated.

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