Jan ’25: Trump 2.0 begins

Was it just me, or was the media relentless in January?

We had a remarkable fracas about the so-called “Pakistani grooming gangs” scandal here in the UK, with Elon Musk weighing in. At the time it seemed remarkable but one month later, as I write this, I am pleased to say I can’t remember the details.

Of course January saw President Trump inaugurated. Which was something of a Spinal Tap moment because, if we thought his media volume level was loud beforehand, it has ramped up to 11/10 subsequently.

On the eve of the inauguration, we saw the Gaza ceasefire. One month later, the ceasefire has held – which is something I suppose. The Israelis are adamant this isn’t a peace – presumably as the Koreans were too back in 1953 – and the mood remains febrile.

Very sadly LA saw the most expensively damaging forest fires on US record. I am a huge fan of LA, and was horrified to hear the fire reached only a few metres away from the Getty Museum – one of my favourite buildings. Thankfully it appears to have been one of the best designed buildings too.

Here in the UK, aside from the Musk politics nonsense, the main theme has been economic growth – or rather the lack of it. The chancellor Reeves has come out fighting, with a raft of pretty proactive announcements such as supporting a third runway at LHR, green lighting the “positive economic outlook – “Ox-Cam arc”, and so on. I take her less and less seriously, but await Labour’s proposed planning reforms with interest.

Market performance

The markets seem to like Donald Trump. Trump’s inaction over his promised tariffs proved to be a tonic, adding to the cocktail of animal spirits/deregulation that Trump appears to represent. US equities rose over 3%, and the USD rose nearly 2%, so in GBP terms USD equities were up over 5%. International (i.e. non-US) equities rose too. Notably FTSE was up over 6%, the strongest month for over 2 years. Bonds were more of a mixed bag, and the GBP fell very slightly.

My weighted benchmark, in constant currency, rose 4.4%, about the same as the VWRL ETF. Currencies rose 1.1% against the GBP, meaning my benchmark rose 5.6%.

Developments in portfolio

January saw quite a bit of ‘tinkering’ with the portfolio.

I decided it might be prudent to reduce my USA exposure modestly. I’m not changing my target allocation, but I am trimming slightly and freeing up cash (/ reducing my loan). In case we get a correction I want a bit of spare firepower.

This has meant exiting two US positions completely. Archer Daniels was bought ‘on a dip’, when its internal fraud event was revealed, and hasn’t moved much since. It’s a dividend champion, but low growth, and the yield isn’t anything to write home about. Separately, I figured it is time to exit another dividend champion, 3M, which I had 24 hours before it released market-beating numbers – leaving me nursing an opportunity cost. Them’s the risks, with tinkering.

While I am happy to sit on the cash freed up, I also want to redeploy a bit of that cash and my UK equities are underweight. I’ve opened two new positions – Admiral Insurance (confusing, the same ticker ADM as Archer Daniels!) and IG Group. Both are decent financial services businesses with something that I like about them.

I had a directly held UK Gilt mature in January, so have rejigged my Gilt ladder a little bit as well. I still have a small £10k clip of cash waiting for a suitable short term Gilt auction.

Portfolio performance

My portfolio rose 4.2%. This was a slight underperformance against the benchmark, and was pretty consistent across my various accounts.

My portfolio ended the month slightly underweight on US Equities, and slightly overweight on International Equities. My leverage is very slightly better than target.

Appendix: Press clippings