2017 Q4 review: top trumps?

It’s the end of the final quarter. More importantly for me, it’s also the end of the fifth year of my portfolio tracking. In the world of asset management, once your track record has five years you are getting on the map.  So how are we looking?

How was December?

Well, starting with December, what happened?  Equities had a good month – particularly the UK where FTSE-100 rallied in the closing days with a fine Santa Rally.  There wasn’t much to report on forex or bonds.  In constant currencies, the markets I’m in rose by 2.85%; currencies then added a 0.2% tailwind, so the blended market average for my portfolio was a gain of 3.0%.  A good month to be in the markets.

2017 12 FvL Market returns

Against a market gain of 3%, December looks actually quite disappointing for me.  My portfolio rose ‘only’ 1.7%.  Why the lag?  I’m not sure; it may be a clerical error because it was all in one of my accounts, but I haven’t had a chance to drill into it. I’m still not complaining about a monthly gain of 1.7%.

How was the full year?

Looking at the wider market during 2017, it has been a very good year for investors.

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Nov 2017: The King is gone.

Without meaningful term limits, the tyrant just went on and on. Well into his dotage, he seemed to have become preoccupied with furthering his dynasty by handing over power to his family.  And to preserving the family billions.  As his grip on power finally began to slip, the superficial stability of his regime visibly crumbled, replaced by an excited whooping and baying by the masses.  A mighty era, ending, this very month?

In fact, Rupert Murdoch remains in power for now. But the rumours are that the dirty digger may sell critical parts of his empire – studios, newspapers etc.

Slightly closer to home, Robert Mugabe is gone.  The king is dead, almost.  And good riddance.  I’ve held off visiting Zimbabwe until he’s gone and now the place has just opened up for me.  Except that his thuggish henchman, by all accounts, has replaced him with the full support of the army.  I may be waiting a little longer.

Meanwhile, out in the markets, what’s been happening?  Supposedly Brexit is all starting to come together, notwithstanding the not-very-minor issue of the only land border between the UK and the EU.  Certainly the forex markets cheered both the EU and the UK, with GBP up to a level it hasn’t seen since its steep Brexit slide. Meanwhile US markets continued their relentless upward glide, providing a benign backdrop for the bitcoin hysteria.

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Oct 2017: Sex and separatism

Interested, yet?  I’m not mentioning interest, because the Bank of England’s long-awaited base rate decision was on 2 Nov, after the month end.

October felt like back to the basics of human relations, courtesy of Harvey Weinstein.  In the UK we had a foretaste of this drama with the Jimmy Saville scandal a few years ago.  But the rumour mill is whirling around Westminster, and the first scalp – Michael Fallon – has just been claimed.  It feels very reminiscent of the dark days of poor old John Major’s wafer-thin majority Tory government, just after his ‘back to basics’ plea and well before the Edwina Currie story got out.  None of this has much relevance to investing or markets, not least because the current Tory government has very little credibility in such matters so markets are largely ignoring the daily newsflow.

Overseas the Catalonian independence movement has been the main story.  This has curious echos of the Nationalist nonsense going on in these isles.  But there is clearly more relevance to the real world.  I’m amazed that 20 large Spanish companies managed to relocate to Madrid almost overnight, in order to stay afloat on the ship which the separatists rats (there’s a rat in separatists, geddit?) are jumping off.  If only we’d had this sort of behaviour going on in Scotland or, dare I say it, among UK-based businesses before the Brexit referendum it would have made Project Fear a darn site more credible.

In any case, and notwithstanding some of the Washington histrionics about tax reform, there’s not been much to report in the markets for October.

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