January media seemed dominated by Greenland and Davos. As part of my efforts to avoid amplifying unstable narcissistic media-whore leaders, I haven’t got much to comment about. London has been pretty wet and miserable, as is January’s reputation.
Meanwhile, markets were up quite a bit in January, for those of us measuring in GBP. This is despite widespread mayhem over Greenland – which the markets shugged off – albeit with a mid-month wobble.
My target allocation’s markets grew 2.4% on a constant currency basis. But their currencies fell by 1.4%, meaning my benchmark rose 1.0%. Against that my actual portfolio was flat. I am a little bit underweight USA equities, and a little bit overweight International equities, which in theory is not a bad tactical position to be in. In any case, I took a couple of hits on larger individual holdings.
Tweaking the portfolio
I made a few changes to my portfolio in January. One of the more significant was moving all my fixed income ETFs held with IB into their own subaccount. I have been meaning to do this for a while but the move gives me better optics into my various asset types and how much money they spit out / return.
I have also sold one of my Swiss equity holdings. The Swiss withholding tax arrangements aren’t properly supported by my brokers – so I don’t get a full tax credit for them – and moreover with ii you can’t actually trade CHF or Swiss equities online. I’m getting rid, of an ii holding at least.
I also can’t escape the conclusion that I would do as well, if not better, if my portfolio had only two holdings in it – VWRL and VGOV, for instance. I’m a long way from that, but I’m determined to track steadily closer to this ideal this year. My unsheltered accounts – which contain around 68 unique holdings – are harder to simplify because they incur capital gains, and most of my accounts do only have one holding per asset class. But for my tax sheltered accounts = with 27 unique holdings – in theory I could drop right down to two holdings tomorrow. Watch this space.
Death & taxes
January is tax payment month in the UK. My tax bill was slightly lower than I was dreading. I have funded it by borrowing from my margin loan – not for the first time – which remains slightly smaller than my target allocation would suggest.
Two more months of this tax year remain. I have been looking at opportunities for tax loss harvesting – few and far between sadly given the widespread gains across the portfolio.
Appendix: Press clippings
FIRE v London 
Thank you for a great update, as always.
You might like to consider a factor ETF such as global enhanced value (IWVG) in combination with your existing global equity ETFs. This would balance away from the U.S and uses fundamental metrics (such as forward P/E) rather than market cap weighting which you currently rely upon.
Broadly, markets are rotating towards value and have outperformed over the very long term time period (since 1997).
Anyway, your blog is always an interesting read and our portfolios are fairly similar. All the best.
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I vastly simplified my portfolio years ago. I’m down to 8 positions now (7 ETF’s and BRK – so basically 8 ETFs). Never looked back. Less levers to pull = less stress and “busy work”. Last few years, TWR in my IB year end report was 15, 20, 20%. I’ve got a bit of a tilt towards tech via a large position in VGT, so I’ve generally been outperforming the SP500 (gains in that have been enough to offset relative poor performance in EM and non US equities I hold). That tilt has been good to me, but the tides will change at some point.
After doing the cleanup a long time back, over time you basically “can’t” fiddle any more due to CGT… which is a lot of ways is quite freeing. There’s always a temptation to do something, but once you’ve got large accumulated CG’s in a simple portfolio, that urge goes away. Any change you make needs to make back the cost of any CGT bill (for me this is 20-30%+) just to break even, so I’m very reluctant to make any changes.
It’s going to be interesting to see how the whole AI thing plays out. I’ve been using the new open AI codex app the last few days, and oh my word… it’s phenomenally good. It can access all of your local project files, and can modify and write code in your projects. The code it produces is VERY GOOD. Up until now, I had found AI to be helpful, but could rarely trust 100% what it put out – a lot of the time it was ok, but sometimes it was complete junk. After using codex for a few days, I’ve found a couple of minor bugs which it fixed quickly, but the rest of the time, the code was good. It’s mind blowing. You’re only limited by how fast you can come up with new ideas of what to do. I’m still trying to process what the impacts of all this will be on the jobs market. One thing is for certain, there is going to be a LOT of changes coming.
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