I have a distinct feeling of deja vu, regarding the February markets.
Just like January, my new real-time portfolio tracker showed – erm, assuming I kept regular track of it which of course I shouldn’t – steady climbs in the month. Just after half way through the month I was up almost 4% on the start of the month. In 3 weeks.
And, just like January, the month end gods poured cold water on those mid month returns. In January, the deluge left me underwater. In February, it was – almost literally – a wash. The graph looks like two camel humps, each hump ending up at the neckline. My final result was within my tracking margin of error – certainly given that some of my accounts don’t give me online access.
Beyond the markets, the most memorable stories were about vaccines, the end of lockdown, and relative comparisons. Relative comparisons between Israel, the UK, the EU, and so forth. Relative comparisons between the Astra vaccine, the Pfizer vaccine, and more. Thankfully, early data appears to corroborate one’s intuition that, if vaccines stop the serious cases, then they also reduce covid-19 transmission dramatically. Truly, spring is on the way.
The market movements for February are shown below. The pound, and FTSE, both gained slightly. Bonds fall sharply at the end of month, especially UK gilts, which in turn led to an equity ‘correction’ – in particular for tech stocks. At my 91:21 weighting, my markets lost about 0.4% on the month. The USD/Euro/AUS, at my 51%:21%:6% exposure, lost me 1.3% too. So the blended market movement saw a drop of 1.7%. Against that, my February result of +0.1% looks relatively strong.
I had a very quiet month in the portfolio. My much streamlined portfolio leaves me with a lot less admin – I can feel that already. My opportunities to further streamline are broadly on hold until I have a chance to top up my smallest ISA in about a month’s time. As I write this, the budget has confirmed no looming change to CGT rates after all – which takes some of the time pressure off nicely.
Dividends – green shoots of growth
Further signs of spring are showing up in the dividend garden. February saw a small but welcome increase over the past two Februaries. As my ‘@weenie graph‘ shows below, it was the first month to show that sort of like-for-like increase since lockdown began 11 months ago.
The bottom line
I remain modestly tactically overweight on cash (/underweight on my margin loan) and very mildly underweight on equities.
I may endeavour to make a couple more portfolio trims in this, the last month of the UK’s tax year, but otherwise I am sitting tight waiting for the start of the next tax year.