Investing philosophy – FIRE v London

Oct ’25: Trim, trim & trim

2025-11-092025-11-09 FIRE v London1 Comment

October in the markets was one of those slightly giddy months. My portfolio crossed through a big number threshold, and kept going up.

The market stats don’t quite tell the whole story. On a constant currency basis, markets rose 2.8%. Non-UK currencies (AUD, EUR, USD) rose (versus the GBP) about 1.7% too. So my weighted benchmark rose 4.6%, measured in GBP. My (leveraged) portfolio‘s rise of 5.3% is roughly in line with that.

A 5% gain in one month is pretty extraordinary, but it does happen. While October was the best month since January 2023 (+6.6%), I have had 7 better months in the last 13 years.

However, what the market stats don’t show is what it really felt like in October.

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What’s the ideal level of leverage?

2025-10-142025-10-17 FIRE v London18 Comments

I’ve used portfolio leverage to help me buy two properties in the last 10 years.

To recap the most recent episode, very briefly, it goes as follows:

In December 2021, I borrowed about 25% of my portfolio’s value to buy my Coastal Folly. I targeted reducing this to a 20% ‘loan-to-value’ (LTV) as soon as practicable.
Only a few weeks later, Russia launched its full-scale invasion of the Ukraine. This disrupted the stock market, and energy markets. The energy market disruption led to a spike in inflation, which caused central banks to hike base rates. It also caused my LTV to go up, not down.
I steadily paid off a bit of the loan, but the higher rates meant that my interest expenses went up 2.5x over the following 20 months.
Since then however my portfolio has gained in value, and my loan has reduced, leaving it today at about 13% of the portfolio value. My interest costs are about 1.5x the January 2022 starting point, which is mildly annoying but very manageable.
I’m left feeling firmly under control, with a relatively low level of risk. The two key risks that I need to consider are
1. a hike in interest rates – which feels very unlikely
2. a plummeting stock market – this feels a lot more likely, particularly in October 2025. But with my loan being only 12.5% of the portfolio value, even if the portfolio suddenly halved in value (a very rare and unlikely scenario) the loan would still amount to only 20% of the reduced portfolio value.

This leaves me wondering what the long term idealised level of leverage is for my portfolio.

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Sep ’25: Gains continue, and I trim

2025-10-112025-10-11 FIRE v LondonLeave a comment

September was a busy month.

In the middle of it we saw a disruptive tube strike. I don’t use the tube that much so didn’t expect it to affect me much but two important meetings were postponed, one of which still hasn’t happened, so that event has stayed in my memory. Thank goodness for rental bikes – Lime in particular played a blinder by ‘flooding the zone’ around train stations in particular.

The evenings are drawing in. But that does afford a new view of central London – there aren’t too many of those around – at the new development at Paddington station.