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.
For some reason shoplifting is in the news. There’s evidently an epidemic of it. Not just in the UK, but wider afield too – hence major brands pulling out of cities like San Francisco. From what I hear there is a general increase in antisocial behaviour, dating from the covid-19 pandemic roughly speaking. I’m not sure what is going on but it isn’t sounding good.
Here in London I haven’t myself particularly experienced this epidemic of antisocial behaviour. Do I live in a bubble, or is London itself somehow avoiding it? Or is it all media hype? I don’t believe the latter.
Markets in September
Meanwhile, in the markets, it isn’t antisocial behaviour exactly but nor is it very social. Markets were generally down in September. UK equities were up, but only when viewed in pounds – which fell significantly in September.
The blended market average dropped 3%, in local currencies. Foreign currencies gained 2.2% vs the GBP, so the wider market only dropped 0.9% in GBP.
My portfolio in September
My portfolio dropped a bit more than that: 1.3%. Given my leverage and my tech exposure (AMZN dropped 8%, for instance), I am where I expected to be.
I made miserable progress repaying my margin loan in September. I have some excuses, but I am not feeling very happy about the situation. My annual interest costs are too high. I finish the month a bit overweight on USA equities, a bit underweight on EUR/Asian equities, and with too large a loan. Thankfully my loan is mostly in GBP – so is falling in value versus global market.
Thinking back a month, two stories pop out for me.
One was the death of Russian mutineer Yevgeny Prigozhin – a larger-than-life modern day warlord, responsible for the ‘little green men’ at the start of the Russian/Ukraine war in 2014, the troll farms that may well have influenced both the Trump election and the Brexit referendum, several regime changes in Africa and a bizarre rebellion in Russia just (in fact, exactly) two months earlier.
Yevgeny Prigozhin, hopefully not RIP
The second story was the long awaited expansion of London’s Ultra Low Emissions Zone (ULEZ) rules across the whole of London. This means that polluting vehicles (about 1 in 6 in recently expanded areas) must pay £12.50 every day that they drive. The ULEZ started many years ago – under a certain Mr B Johnson as London mayor in fact – and saw some grumbling but nothing unexpected when it expanded into my area a few years back. But the expansion to London’s outskirts – 20 miles from the centre – set off a political storm when it caused an upset in the Uxbridge by-election (caused by that same Mr Johnson’s latest antics), and since then the politics of environmentally-driven policies have been upended. There will be more repercussions attributed to the ULEZ and that Uxbridge byelection, I’m certain.
My August
August saw an influx of overseas visitors. A highlight was a trip to The Hut restaurant on the Isle of Wight, which is London prices and service levels in a fantastic coastal setting.
The Hut restaurant near Yarmouth on the Isle of WightView of the Solent, from The Hut
I also managed a bit of walking on the south coast, near Weymouth.
FIRE v London 