July 2019: 3rd best month yetPosted: 2019-08-04
Boris is bashing the pound, Trump is bashing the global economy. Who’d invest in anything, in this environment?
Well, when the Brexiteers pummel the pound, us globally diversified investors tend to do alright – provided we measure our progress in pounds! And FTSE-100 does alright too. This month was no exception; the GBP fell over 4% versus the USD, and FTSE rose over 2% partly as a consequence.
Bonds went up too, particularly in Europe (inc UK, obvs) – for reasons I’m not sure about.
Elsewhere was a bit more of a mixed bag – Oz equities steamed ahead, European/Asian equities sagged, the US shuffled forward.
Currency movements alone moved the markets I’m in up 2.7%, in GBP terms. Though the UK FTSE rose over 2%, my UK equity weighting is relatively low, so the diversified markets I’m in rose ‘only’ 1.1% in their local currencies during July (more thanks to bonds, than equities!). Combining the two effects means my market benchmark was a gain of 3.9% in July. Such months don’t happen often.
For the record, and despite my ‘what am I doing? nothing’ post a couple of weeks ago, I have made a very tiny tweak to my portfolio allocation – to reduce my target equities exposure by 1% (93% ->92%, UK equities 24%->23%), and my gearing by 1% of the portfolio (i.e. a relative drop of almost 10%, from 13% to 12%).
How did I do, with markets rising almost 4%? In fact my unitised return was a gain of 4.8%, in one month. That’s the third best month since I started tracking monthly gains, 67 months ago.
World equity markets have risen almost a quarter this year so far (see chart below). The US global bond aggregate has risen 12% too. What a year to be alive.