Portfolio Summary
Here is a summary of my portfolio at the top level:
- Raiz Aggressive Portfolio – $9,943.22 (-10.24% according to app)
- VDHG (using VPI platfom) – $54,424.30 (-5.20%)
- IVV (Selfwealth) – $576.93 (10.03%)
- SYI (Selfwealth) – $2,042.88 (4.62%)
- VISM (Selfwealth) – $482.85 (-3.51%)
- A200 (Selfwealth) – $1,840.48 (-2.40%)
- Cryptocurrency – $28,338 (-49.24% from principle)
- Australian Shares – 29.63%
- Global Shares – 27.90%
- Bonds – 6.29%
- Fixed Income Assets – 0.31%
- Cryptocurrency – 29.02%
Portfolio Total – $97,648.66. An increase of 3.46% compared to last month’s value ($94,381.49).
This month’s saving rate is 58.74%. Another big expense this month is the plane tickets for my holiday. It’s been a long time so I think it might be time to rest and visit my parents. The tickets cost 2/3 of my monthly expense budget, and the expectation for this month’s saving rate will be much lower than the previous month’s (62.26%). As you can see, things will happen in your life and you will have surprise purchases. I usually want to keep my saving rate at 70% for 2 reasons – the first reason is to have more awareness of my expense each month, and the second is to ensure I can have plenty of rooms if something happens. The number 70 works for me in this case since I am a minimalist, I do not see the need to overspend anything more than my necessities. I would prefer to prepare for unexpected events and the emergency fund should not be touched if I have extra monthly to cover. In reality, anything more than a 50% saving rate is already a success for me, but once it drops below 50%, then I need to analyze what happened that month. I take 2 weeks off from work for the holiday so I will not receive any salary for those 2 weeks (since I am a contractor), so my expectation for January next year is that my saving rate will drop below 50%. I am trying to do more work to cover those costs, let’s see how that goes.
My contribution for this month is still the same. With the extra spending this month, I have to work a bit more on my side job to cover the cost of the plane tickets. I still need to buy a laptop for work so more extra work is needed. $4,000 is contributed to VDHG as usual, $400 to Raiz’s account, and around $2,000 for Bitcoin this month. No changes to my strategy. A bit of information about buying Bitcoin at this time – the Bitcoin Rainbow chart, basically we are in a fire sale. Even though the chart is useful to see the value of Bitcoin, take it with a grain of salt. With the current situation of inflation, FED has warned there would be blood in the market. I would expect in the next couple of months, we are going to see red everywhere. Regardless of things happening around us, I am still seeing this as an opportunity for my long-term investment, and with my plan, I am sure I will be doing just fine. I have another goal that I need to achieve at the moment – to invest in myself more, get more experience, and improve my skill. I have lots of work now and do not have any more time spending on thinking about markets in the future.
Note: A reminder is that this number is still an estimation only as my crypto portfolio consists of different assets, including NFTs, staking, DeFi. I have to use different tools to keep track of and maintain the value of assets to finalize the final value of my portfolio. NFT is hard to estimate because of price fluctuation in the crypto market. However, estimation is still good enough in this case.
Events & Porfolio Analysis
This month has seen rallies in stock and crypto markets, even though the general picture is not that good. Let’s summarize what happened and see what we would expect next month.
The RBA increases the cash rate by 50 basis points to 1.85% on 02/08/2022. Inflation in Australia is quite high so this rate hike is reasonable, and we will soon see the RBA will follow closely to FED. 03/08/2022, Phantom wallets on Solona got hacked on iOS and Android. This is another example of why investing in crypto, it’s not just about the volatility but also your wallet’s security. The crypto market has been targeted by hackers in recent years, especially to cross-chain bridges. You never know what would hit you, so always check your wallets every day when using your own wallets.
After Australia, the bank of England hiked its interest rates by 50 basis points, and that makes the current rate 1.75% on 05/08/2022, the largest rate hike since 1995. On the same day, the nonfarm payrolls rose 528k for the month, and the unemployment rate was 3.5% which indicates a sign of strength for job markets. This also means that FED will likely increase the rate by another 75 basis points. And then on 10/08/2022, the CPI report for July in the US is 8.5%, less than the expected 8.7%, and markets rallied. It is so weird to think that back in a couple of months ago, 8.5% is something we fear, but now it’s a good sign. An explanation for this that I have gathered – people are thinking that inflation has peaked and we can see FED will pivot. Now, from my point of view, inflation is still high, there’s no way FED would pivot because inflation has peaked. Their target for inflation is around 2-3%, and we are 4 times above that target. I still don’t know how this market works at all 🙂
Unsurprisingly, on 17/08/2022, UK inflation hits double digits number – 10.1% in July. This is just insane. Markets reacted badly to this news. Bitcoin made a sudden drop in price because of this news. I decided to throw this new in – Michael Burry has sold all of his stocks except the Geo company, an odd decision. Speaking about a sudden drop in Bitcoin’s price, there was no news on 19/08/2022, Bitcoin just dropped another 1,5k and was trading around 21-22k. Looking back to the event on 17/08/2022, we noticed on that day, there was a huge supply of Bitcoin transferred to exchange but no actions at that time, this might be the reason for the drop, but no one has confirmed yet. Another incredible milestone – The EUR currency fell as much as 1.1% to 0.9928 compared to USD on 22/08/2022, a new two-decade low. If you are traveling, it is a good thing though. Still, this has shown the strength of the dollar has increased significantly since the rate hikes and the EUR is at its lowest because of inflation.
And the biggest news that we are waiting for – the Jackson Hole’s speech. Jerome Powell made his speech, and we could see that whatever he said had a significant impact on the markets. Don’t fight the FED at all, they are the ones controlling the market. Jerome warned of some pain ahead, and fighting inflation is the top priority. Stock, Bitcoin, everything just tanked on 27/08/2022, with Bitcoin dropping below 20k.
Surprisingly, my portfolio is still up 3.46%. There are not much changes to my allocation compared to last month. Everything goes up a bit in terms of value, but things are not looking good at all. FED is still going on with its rate hikes. I was expecting a drop in the value of my portfolio this month, especially in VDHG and crypto portfolios. VDHG is now more than half of my portfolio. The current distribution rate is 57-43 between stocks and crypto. My goal in a short term is to make it to 60-40. I am more comfortable with that number. I believe I can achieve it shortly with my monthly contribution. Around 60% of my contribution is in stocks, and the rest is in crypto. My estimation is 2-3 months. Though when that time comes, I need to revise my portfolio and see if it still follows my original plan and goal.
For the crypto portfolio, I am still buying Bitcoin. I have been focusing on Bitcoin only and Bitcoin is now a big part of my crypto portfolio, around 25-30% I believe. I still need this number to be higher, at least 50%. The longer I stay in crypto, the more I understand about Bitcoin and why it’s the king. Furthermore, the risk is lower compared to altcoins during the winter season (but Bitcoin is still a risky asset and the volatility will definitely crush your confidence). This is not just about investing, but also about how your confidence is being tested during these times. Lots of news saying about Bitcoin will drop another 5k, 10k. News about hacking, rug pull projects, and advice from so-called “experts at Wall Street” would definitely spook the hell out of you. I believe this is the time when my faith in crypto would be shaken a lot, and what would be the outcome of this? Will I sell everything at a loss or do I have the faith in an immature market? I guess time would tell soon. I believe in the potential of crypto, but without regulations, we are still far away from being accepted. With the current distribution of my portfolio, I am actually scared when thinking about it. Thinking about one day my investment in crypto would be gone forever. So anyone is reading this, thinking about this carefully before stepping into the crypto market. I put myself as an example if things went horribly wrong, or I would make money in this market. I do not know about the future but I am sure about one thing, tomorrow is a new day, and I am ready for it.
Some of the articles I use for the information above:
- https://www.rba.gov.au/media-releases/2022/mr-22-21.html
- https://forkast.news/headlines/solana-hack-over-7000-phantom-slope-wallets/
- https://www.cnbc.com/2022/08/04/bank-of-england-launches-biggest-interest-rate-hike-in-27-years.html
- https://www.cnbc.com/2022/08/05/jobs-report-july-2022-528000.html
- https://www.cnbc.com/2022/08/10/consumer-prices-rose-8point5percent-in-july-less-than-expected-as-inflation-pressures-ease-a-bit.html
- https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/july2022
- https://www.bloomberg.com/news/articles/2022-08-22/euro-drops-below-2022-low-to-mark-last-seen-two-decades-ago
- https://fortune.com/2022/08/30/stock-market-pain-jerome-powell-jackson-hole-speech/
Passive Income
This month has produced about 14.456 ADA. SOL and ONT rewards are small. BAT reward is 14.5 BAT. Staking reward for AXS for this month is about 0.341 AXS. Staking for IMPACT is 3339.529. No dividend payment for this month.
To sum up:
- ADA Reward – 14.456 ADA.
- SOL and ONT rewards – the reward is not large enough to consider.
- Brave Reward – 14.5 BAT.
- AXS Staking – 0.341 AXS.
- Impact Staking – 3339.529 PACT
What I have learnt
Keyword for this month – Communication
It’s been busy for the first 2 weeks of August. There are more works than I though for one of the project at work. I find myself drowning in the list of works. And in that, I am learning to communicate more to other members. The barrier that I have before, that invisible wall that stops me from asking other people for help has slowly disappeared. It’s not so bad after all. One of the thing I am glad that I am able to resolve is to learn how to deal with different team members. I am able to communicate efficiently now with the team member that I had troubles with. It all comes down to one quality – patient. People have different ways of communication. To communicate efficiently, I must first understand other people’s perspective. This is a valuable lesson for me this month as it allows me to understand other people better. Other thing that I learnt when working with other people is team communication is important in an organization. This was demonstrated when some of the work that I perform would affect other team in a complete different branch, and we need to communicate fast to resolve the issue. 24/08/2022 is the most memorable day for me, as I was having meetings after meetings with different people, working toward a solution and many things. I was exhausted at the end of the day but that feeling is still there, the feeling of achievement. It shows how team communication is required to succeed. It helps build my confidence day by day when I perform my work. Once I got my confidence, I feel like I can solve anything by connecting the dots together. To be honest, I have this curve when I first start something new, something that I truly do not have any confidence in. You can imagine a chart, with the y-axis showing the efficiency and the x-axis is my confidence level. At a certain point, once my confidence level has reached a certain amount, there’s a sharp increase in my efficiency when performing tasks. That’s just how I work and I stay true to myself.
Due to the amount of work this month, I was not able to listen to any podcasts or watch youtube videos about finance. I am still watching clips from Thuan Capital or Benjamin Cowen to keep up with daily information about markets. Other than that, no progress in learning more about investing. Even though I could not learn much about investing, I gained more experience and improved my skill as a Software Developer. I have just got a deal to work for another company from a friend, and I am pretty confident that I can do it. With the skills that I have improved in the last 9 months, I can see understand more about my issues when it comes to coding and how to write code more efficiently. This has been demonstrated through my recent work for freelance – the new payment system for the company in 3 weeks (only after hours during weekdays and weekends). I was surprised by the amount of work that could be done in such a short amount of time. This month is all about self-improvement and working toward my career goals.
Another month comes and goes away, but lessons are here to stay with me. It’s been busy but also full of opportunities to learn. Let’s keep moving forward and be a better version of myself.