Jan 2022 – The long overdue correction

My worst month ever, at least since I have tracked things rigorously and monthly, was March 2020. That was the month that the covid-19 penny dropped, with lockdowns starting across Europe. My portfolio dropped 13% that month, after a 6% drop the month before – making my biggest drawdown -19%.

Once-a-century pandemics aside, my worst month in 9 years saw drops of about 6%. 2018 Q4 saw two separate months (October and December) that my portfolio dropped 6%. Aside from these 6%-drop months, I haven’t seen any my portfolio drop more than 4% in a month since I started tracking, 9 years ago.

So I was somewhat tense at points in January to see my dial dropping at times by 10% on the month earlier. The month rallied towards the end, leaving me down 7% on the month. Leverage was definitely my enemy , as equity markets fell everywhere.

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2021 review, via seven questions

This, my annual review for 2021, somehow was overlooked in January. But better late than never, let’s ensure 2021 is not forgotten – it was a rather extraordinary year.

2021 was the 9th year that I’ve been tracking my portfolio (reasonably) rigorously, every month.

Following the format I used last year, I’m setting out here to tackle seven generic questions that I think all prudent investors should ask themselves at least annually.

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Nov 2021 – Omicron emerges

I never studied Greek. But I thought I’d learnt of most of the letters of the Greek alphabet by the time from my secondary school maths/stats education.

The full Greek alphabet

So this ‘omicron’ variant has befuddled me. It turns out that the Greek letter looks like a lower case o, so it would have been the most confusing thing ever in my school maths classes – thank goodness I’d never come across it (nor all the other variants after Delta) before. Now I’m trying to avoid coming across it in a different sense.

But it’s not just me that has been befuddled, it turns out, because the stock market has been almost as befuddled by the recent developments. But as the month turned out, things looked fairly straightforward – equities down, AUD down, and safety (gilts & USD) up.

Market movements in November ’21, constant currency

My overall return for the month was actually up slightly in the month, with currencies and my tech stocks helping counteract the hit from equities. My subportfolios tell a slightly more granular story:

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