July 2018: The trade news sweetens

So far as I can see the key geopolitical news in July was a distinct improvement in the US trade war music, if war music is a thing.  In particular the EU:USA dynamics improved dramatically when the EU Commission President, Jean-Paul Juncker, showed Trump how to paint trade by numbers.

Given that markets had been fretting that Trump would start punitively taxing German cars, which he has supported for several decades, the Juncker announcement that the EU would buy more soyabeans had a surprisingly positive effect.  Or at least, that’s how I account for the 3-5% increase in equity markets in USA/International (Europe), compared to just over 1% in the UK/Australia markets I track.

In other news, the pound fell a bit, and correspondingly the UK equity markets rose a bit.  I don’t really know why Oz equities were up, in sterling terms, by 2% for the second month running, but I’m certainly not complaining.

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June 2018: The liquidity of treacle

Life somewhat returned to normal in June.

By normal I mean the tariff war resumed, Brexit chaos continued, European political dysfunction filled the newspapers  and so forth. The US and Europe now have tariffs against each other on steel and Harley Davidsons.  But more dangerous escalation looms – with Trump clearly gearing up to impose tariffs on German European cars.

From a market point of view the big loser were major exporting markets.  In my world, this meant ‘International’ equities, which lost 2.5%, even as the Euro rose a little against the pound.  UK/US equities dipped slightly too.

On a much brighter note, Australian equities jumped, which I think was due to large electoral bribe tax cut passing both houses of parliament.  Bonds rose slightly, in line with their long run average.

The second windfall that I was expecting in June still hasn’t arrived. Just as well I hadn’t spent it yet; even with ‘liquidity events’ the liquidity can feel like treacle, not water.

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May 2018: Exits behaving like buses

May was a pretty extraordinary month for my finances.

In the wider world, the most obvious newsflow appeared to be about Italy’s attempts to form a populist government, and the tariffs/trade war begun by Trump in the previous month. This led to the European currencies falling against the ‘Pacific’ currencies (USD and AUD is what I care about).

The FTSE-100 rose almost completely to compensate for the drop in the pound, as it often does. Eurozone stocks however fall slightly, in what was a marked shift versus UK stocks.  And US equities rose slightly, which I think was a mixture of higher oil prices, further tech boom, and generally a sense that Trump is making some progress.  Bonds barely moved.

But in my little bubble there was a lot more news than this.

The most dramatic news for me was in one of my illiquid holdings, where an offer to buy it has just come through unexpectedly, at a significant price premium to what I had valued it at.  This is a significant holding for me, so the price premium is worth six figures. However, it is in a pot which includes my legacy private banking holdings, and I don’t include in my ‘invested portfolio’ tracking, so you won’t see this significant uptick in my monthly returns tracking.

Secondly I have had confirmation that I can expect the second of two windfalls I wrote about a couple of months ago to arrive later this month. This will add a useful sum to the invested portfolio. Between them, all these bits of good news increase my returns, or increase my portfolio, or both.

Overall I have had three unanticipated ‘exits’ within about one month.  This will significantly reshape my portfolio. When exits are as rare as hen’s teeth, I feel blessed.

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