I have heard it alleged that Vladimir Putin is the richest man in the world. For that to be true, he would need to be worth around $200bn. That would be at least $199.9bn more than the lifelong KGB man/civil servant/politician has declared. Which is just one of the many mind-boggling things we have to contemplate about Russia at the moment.
Even at the start of February, the markets were under pressure – and my more-leveraged-than-usual portfolio has needed care and scrutiny. But I wasn’t considering the risk of a European nuclear war in any of my assessments.
My stance to the news and chaos has, perhaps paradoxically, been to tune out of the market. I believe my portfolio is pretty well positioned and I think that checking its daily movements in no way helps my mental health nor my portfolio risk management. So I’ve reduced the frequency of checking my live updated spreadsheet to barely once a week.
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.