The Israel/Gaza crisis continues. Public opinion is shifting against the Israel government here, even in North London – which would normally be one of the most sympathetic neighbourhoods outside Tel Aviv.
The Ukrainians are left feeling somewhat zero-sum in the battle with Israel for foreign support and attention. Some informed opinion now says the war is over, bar the fighting, and the only thing left is a land-for-peace deal. And the USA election, which is still almost a year away. Sigh.
I don’t have any perspective on it, sadly, other than that I hear of some nasty low level youth violence/intimidation/vandalism in North London in Jewish neighbourhoods by pro-Palestinian, dare-I-say-it pro-Hamas hotheads. But in most of London life carries on unchanged.
Markets fell pretty painfully in October. USA/S&P wasn’t as badly hit as other market, thank goodness, but my weighted markets still fell by 2.3%. If there is a non-zero chance of a major regional conflict developing, and/or a chance that Russia gets to have its wicked way with Ukraine after all, then I think the markets have underreacted. But that’s apparently typical at the onset of geopolitical disasters.
In any case, my portfolio managed to drop by 3.2%. My underperformance I think was at least partly caused by Google’s 7.5% drop in the face of some awkward disclosures they are making in their US anti-trust hearings.
As well as a decent dollop of dividends in October, I had a small bit of ‘windfall’ (ish) liquidity this month, as I took advantage of an opportunity to sell some of an angel shareholding via a ‘secondary’ transaction – i.e. selling some shares to another investor. This investment was made under EIS, so is tax free. It’s the equivalent of a few months’ worth of my interest charges, so it’s welcome, but not needle-moving. There are precious few exits / liquidity opportunities in the private/angel world at the moment, which was a factor in deciding to take up the offer to partially offload. For more insight into my psychology check out my recent blog post on Feeling Broke.
I finish the month underweight cash (/overweight margin loan), a bit overweight US equities and underweight international equities. This is a pretty familiar posture.
My psychology around money has changed significantly over the last two years. While some of that is captured in my monthly portfolio updates, I thought it was worth recording some of my emotions while they are still fresh.
Two years ago
Turning the clock back, my financial situation was, in word, ‘flush’. The stock market boom had just crested – S&P500 was at 4400, FTSE-100 was at 7000.
I generally had a surfeit of cash every month, just from earnings – never mind investment income. I saw several exits over a 2 year period in my angel investing activities. I reinvested both sheltered income and unsheltered income for compound investment growth. I was unmortgaged. Base rates were almost zero – which I exploited with a margin loan – leveraging my portfolio by a target 12% loan-to-value.
FIRE v London 