I managed to enjoy a few days’ skiing, despite less snow than any of us would like, in the Austrian alps.
Back at home, the sun has been getting stronger, and the evenings have been getting lighter – and now with Summer Time we will enjoy lovely late evenings for six months.
And I’ve been reflecting recently on a key influence in my life – the author James Clavell.
I remember as a child in the early 1980s being astonished that my mother could take on a 1300+ page book. Shogun, Clavell’s third key novel, had just been televised into a TV miniseries – the first western production ever filmed in Japan, apparently – starring Richard Chamberlain. I enjoyed the miniseries enough that soon enough I was reading the book myself – and I was gutted when, after those 1300+ pages, it finished.
One of several highlights for me in January was visiting Salisbury cathedral, which I did on an impulse while travelling back from the Coastal Folly.
My main frame of reference to the cathedral being those notorious Russian nerve agent assassins citing it as their reason for visiting England, something which to a Londoner had as much plausibility as as Putin’s claims that Ukraine’s Nazis started the war. I hadn’t taken seriously the idea that the cathedral might actually be a reason to visit England. But I would say I was wrong – it is stunning, and surprisingly moving. Photos really don’t do it justice.
Elsewhere in the world, the focus has shifted from the Ukraine war to the Gaza crisis – which has escalated to the Houthi shipping attacks off the Yemen.
It’s the start of a calendar year. Let’s take a look at what 2023 did to me financially. I’m following the same structure I’ve used for the last few years (2022, 2021, and 2020). Overall, 2023 was a good year on almost all measures – thanks in particular to Q4 which saw the US stock market drag the year into a top quartile performance.
Q1 How did markets do?
First of all, what happened out there? Well, the year felt pretty ‘meh’ for the first nine months – as illustrated by my rather depressed blog post in mid October. But almost as soon as I hit Publish, the US market in particular led a dramatic recovery – reflecting a sharply improved outlook for inflation and interest rates. You can see below firstly the performance in December.
December 2023 market returns, by geography and asset class
Then we get to the year as a whole. Bonds rose by 3-5% across the board, but equities did strikingly better – particularly in the USA where the S&P500 rose around 26%. The UK equity market looks like the runt of the litter, which given the tech-driven nature of the uptick and the lack of UK tech wouldn’t be a big surprise. However it isn’t quite that simple, because the GBP rose against most currencies.
2023 market returns, by geography and asset class
Another way to look at the benchmarks is to look at the world equities (e.g. VWRL) and world bonds (e.g. AGG/BND or the UK’s IGLT). My portfolio has often pretty closely tracked the VWRL ETF. The graph below shows VWRL and IGLT’s share prices (but not dividends) for the year, showing the world equity bundle up (in GBP) 13.4% and the UK government bond index roughly flat.
2023 performance of Vanguard World Equities, and UK Government bonds (excluding dividends)
Q2 How did I do, vs my benchmark?
Against that backdrop – bonds up a bit, equities up considerably more especially in the USA, how did my portfolio perform?
FIRE v London 