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Portfolio Update – October 2022

uehiFinance

Portfolio Summary

Here is a summary of my portfolio at the top level:

  • Raiz Aggressive Portfolio – $10,491.53 (-17.73% according to app)
  • VDHG (using VPI platfom) – $62,175.12 (-4.71%)
  • IVV (Selfwealth) – $585.95 (10.33%)
  • SYI (Selfwealth) – $1,913.45 (0.61%)
  • VISM (Selfwealth) – $490.23 (-1.96%)
  • A200 (Selfwealth) – $1,918.11 (-1.70%)
  • Cryptocurrency – $32,277 (-45.32% from principle)
A breakdown of my current asset allocation:
  • Australian Shares – 29.19%
  • Global Shares – 27.91%
  • Bonds – 6.33%
  • Fixed Income Assets – 0.29%
  • Cryptocurrency – 29.38%

Portfolio Total – $109.851.39. An increase of 8.04% compared to last month’s value ($101,635.03).

This month’s saving rate is 61%. It’s been a quiet month around my expense. I have done most of my unexpected expenses and I should be good for the next upcoming months. The $1,200 that I lent out last month, it’s gone now due to personal circumstances. That money will never be back but on a good side, that person would never contact me again about money. Last quarter was hell, both at my work and my personal life, so why not treat myself something? My phone plan has ended last month, so I have a new phone plan, an iPhone 14. My iPhone 8 has been in good use for the last 5 years. I am still keen on using it but the battery is degrading every day, it would be best to send this phone to my parents so they can replace their old ones. The upgrade costs me an extra $12 a month for my phone plan which is acceptable. Another issue that comes up this month is food expenses. I start to exercise more this month and realize that my body is craving more food. I have taken more deliveries recently (I should not), so the food expense is a bit concerning, though it’s still not so bad that I need to start looking into it. Though, I made a new friend at work, who can provide me food for 3 days at the cost of $60. It’s still too early to say if the food can last for 3 days (I’m so sorry about this 🙂 ), but by getting home cook meals, it would be better for my health. I am looking forward to next month. I also have a goal next month to start my journey for house hunting. My dad has been nagging me about this for a long time, and I believe this is a good time to learn about this. My goal is to at least understand the market and the process of buying a house. The one thing that I hate the most is paperwork. I truly hate this, but sometimes I need to take it in any way. Hopefully, this will not turn into a nightmare.

My contribution for this month is on track with the new plan. $4,000 to VDHG ETF, $400/week for Bitcoin, and $100/week for my Raiz account. The exciting news is that Vanguard no more charges brokerage fees on the VPI platform for Vanguard ETF products. This is actually good for me, even though $9 is not much, but over a long period, this can add up a lot. I now do not spend much of my time looking at my portfolio. The contribution plan has become a habit at this point. The discipline that I have built up since last year has become stronger every day. I no longer need to look at the market and am only interested in seeing how the market reacts based on news. As I have written this in my last post, this is an opportunity for anyone who is interested in investing. This is a once-in-a-lifetime opportunity to see the market corrects itself after a long bull market. It’s like you got $50 in your hands and mom told you to go buy anything you like in a candy store. I actually think that I am quite lucky to witness a bear market (and recession) at this age, buying things at a cheap price, especially Bitcoin. I believe the key to going through this bear market is to believe in yourself and become disciplined. As long as you can keep your emotions in check, and stick to your plan, it will become a habit just like what I am doing now.  I really hope that this bear market will last longer so I can accumulate more.

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 other 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

A lot to unfold this month. There have been major events that cause disruption in the markets, and lots of intervention from the government. It was fun to look back at this month and see how wild things were. Let’s start with the general news

  • There’s a rumor about Credit Suisse Group and Deutsche Bank are going to have another “Lehman Brothers” moment, their stock price is currently trading at extremely low values at $3.71 since 2008 on 03/10/2022. Credit Suisse’s credit default insurance (CDS) chart looks similar to the levels Lehman Brothers had before the bank’s bankruptcy. This is quite a concern, and if Credit Suisse cannot solve the liquidity issue, we might witness another 2008 financial crisis again.
  • UK government u-turns on cut to top tax rate on 03/10/2022, and the Pound has bounced back. The tax cut plan has made a significant impact on the bond market, leading to the intervention of the Bank of England. Finally, the UK did the right thing and gained the trust of the market. 
  • In Australia, RBA announced another 25 basis points hike on 04/10/2022, which increases the cash rate target to 2.6%, and the market rallied.
  • Elon has once again decided to go along with the Twitter deal. Buying at a share price of $54.2 is a bit overpaid at this point when things are already down significantly.
  • On 05/10/2022, OPEC is to cut oil production by 2 million barrels per day to increase the price, which is against Biden’s goal. There’s a fight going on between the two parties, one wants the price to go down and the other to go up.
  • On the same day, the ADP jobs report shows there are 208,000 jobs added in September, better than expected.
  • The next important report is the job report for September on 07/10/2022. The unemployment rate falls to 3.5% in September, and payrolls rise by 263,000 as the job market stays strong on 08/10/2022, all markets dropped instantly by 2-3% as FED would use this number to keep going with the upcoming rate hike.
  • 11/10/2022, another red day resulted in the Nasdaq closing at a 2-year low, this might be the result of the upcoming CPI report as the market expects the inflation to get worse.
  • Bank of England continues buying bonds program on 12/10/2022, the pound falls after this news. 
  • Asia market tanks after the new export rule in the US on 10/10/2022, the rule can be found here. 
  • On 13/10/2022, FED expects higher rates to stay in place, from the meeting minutes. The Producer Price Index (PPI) also comes out, higher than expected by 0.2%, and markets slip. Another important news before the CPI is that consumer inflation might be higher due to boosted rent.
  • The CPI number is out on 14/10/2022, declining to 8.2% on a yearly basis in September from 8.3% in August. This reading came in higher than the market expectation of 8.1%, the Core CPI, which excludes volatile energy and food prices, was up 0.6% and 6.6%, and markets dropped sharply including SP500, Nasdaq, and Bitcoin. However, after the drop, there’s a turnaround in every market. This was the crazy day ever recorded.
  • On 17/10/2022, the new finance minister scraps almost all planned tax cuts, and the market appeared to calm down after this news.
  • On 21/10/2022, Prime Minister Liz Truss resigns after a failed budget proposal.
  • Not only we are seeing things in US and UK, but the Japanese yen also hit 150 against the U.S. dollar, the weakest level not seen since August 1990. The 10-year Treasury yield was last at 4.2843%, after rising by close to six basis points. This marked the highest level the benchmark note has traded at since 2008 and signals a major recession coming soon.
  • On 24/10/2022, Japan likely conducted its biggest-ever currency intervention, with an estimated 37 billion dollars.
  • On 28/10/2022, the earning reports are out, and the results are disappointing, Meta (Facebook), Google, Amazon, and tech companies got sold off hard, especially Meta.
  • ECB also announced a 75-basis-point interest rate hike on 27/10/2022, and at the same time, US GDP accelerated to 2.6%, however it might be just a short-term thing.
  • The PCE (Core Personal Consumption Expenditures) price index increased 0.5% from the previous month and accelerated 5.1% from the report. The number seems to indicate that inflation is slowly coming down, and the market expects a 0.5% rate hike in December.
Crypto news
  • On 05/10/2022, the good news for Bitcoin is that McDonald has started accepting Bitcoin and Tether in the town of Lugano, a Swiss town. A small step toward the adoption of Bitcoin.
  • Quick update on Ripple vs SEC update – District Judge Analisa Torres of the U.S. District Court for the Southern District of New York has granted I-Remit and TapJets’ requests to file amicus curiae briefs in support of Ripple Labs on 12/10/2022.
  • It also appears that lots of whales dumped Ethereum for the last five weeks, as reported on 17/10/2022, this kinda means that whales were accumulating for The Merge and then dumped to control the price.
  • At the same time, Ripple Begins Testing XRP Ledger Sidechain That’s Compatible With Ethereum Smart Contracts, this is to attract developers from the largest community to have a smart contract on the XRP ledger.
  • On 24/10/2022, Ripple finally gets the documents needed from SEC about the statement from ex-chairman Hinman. A major win for Ripple.

This month has been crazy with all the news. The volatility in the stock market is even greater than in Bitcoin. Meta’s (Facebook) share price plunges 22.59% after the earnings report, followed by Amazon, Apple, and Microsoft. To my surprise, Bitcoin price has held pretty well this month at the price range of 19-20k, despite all the news. An explanation for this could be when a bull market happens, lots of people with high-risk tastes come to Bitcoin for a higher return. But in a bear market, those people would likely sell tech stocks and Bitcoin, hence the correlation between these 2 assets was high. This somehow proves that Bitcoin is worth diversifying the portfolio, even if it’s only a small amount.

A major event happened recently when we had a short squeeze in Bitcoin price, which pushes up to the $20,000 price point. There were around $1,1 billion dollars had been liquidated. It caught me by surprise that a lot of traders tried to short Bitcoin and suffered significant losses. 

 
The main focus of this month is the tax plan introduced in the UK by Ex-prime minister Liz Truss. This event shows us that any plan should be considered carefully before announcing it to the public in a sensitive like this. Nobody saw this coming and the Bank of England had to intervene because of the massive sell-off to prevent a crisis. I still do not understand why a tax cut is a necessity when inflation is running hot in the UK at 10%. And because of the failed budget proposal, Liz Truss resigned after 44 days, and the damage could not be reverted at all.
 
This month sees an increase of 8.04% in my portfolio, mostly from VDHG and crypto portfolios. All the dividends have been re-invested to buy more shares – 1 more share for A200 and 1 more share for SYI. My Selfwealth account does not fluctuate much and remains at $4,907.74 (a decrease of approximately $100 compared to the principal amount of $5,080).  The most impressive gain of this month comes from VDHG from $55,855.80 to $62,175.12 (including contribution + dividends). Though the overall market condition looks pretty bad and the recession is already happening, there’s not much chance that I can see any positive gain in the upcoming years. My Raiz account sees a nice recovery, still, its performance is the second worst from my total portfolio. An interesting observation in my Raiz account is the 2 ETFs fund RCB and IEU do not return any dividends this time, which does not matter much but I am interested to find out why. Crytpo portfolio sees a small gain, but I believe this is mostly from the contribution. Bitcoin has been stabilizing at the price range of $19k-$20k this month. The volatility has decreased compared to the stock market. Most of my contribution is in Bitcoin so it would make sense why there’s not much fluctuation in my crypto portfolio, meanwhile, altcoins are behaving the same as Bitcoin. However, I expect altcoins might experience another downturn in the future when the macro economy becomes worse. Bitcoin is still my current go-to choice for DCA-ing and currently sits at 39% of my total crypto portfolio. My goal is to make this number at least 70% before accumulating altcoins. It’s only a matter of time until we see a reversal and the economy recovers, but that’s not gonna happen in a short time. The activities on financial subreddits are decreasing daily, which shows the lack of interest in investing during the current bear market. To me, this is where those who are willing to take the risk will get great results in the future but one should prepare that it would take at least a year to see the market bounce back. 
 
The current asset allocation stays relatively the same. From the information gathering in the past couple of months, I do not see any movement toward my asset allocation goal. Combining this with the current market conditions, it might take a while until I see a clear pattern in a shift of asset allocation. Until then, I would stick to my plan.
 

Some of the articles I use for the information above:

Passive Income

This month has produced about 14.098654 ADA. SOL and ONT rewards are small. BAT reward is 33.75 BAT. Staking reward for AXS for this month is about 0.373 AXS. Staking for IMPACT is 4173 PACT.

To sum up:

  • ADA Reward – 14.098654 ADA.
  • SOL and ONT rewards – the reward is not large enough to consider.
  • Brave Reward –  33.75 BAT.
  • AXS Staking –  0.373 AXS.
  • Impact Staking – 4173 PACT
  • No dividend this month

What I have learnt

Keyword for this month – Trust

This month has been a bit emotional for me, both at work and in my personal relationships with my parents. Let’s go through the good news first. I become more confident and friendly with my colleagues, especially the communication part. The office area where I am located is my new favorite place every day. I talk more with my co-workers, makes jokes with them, and have different conversations about different aspects of our work. This has boosted my mentality and when I perform my duty at work, I am more comfortable than the first month since I work here. I know more about the process, know who to reach out to, organize work more efficiently, and communicate better with my teammates. I can feel the flow and the connections in our team (even though there were hiccups at the start). We got our backs and help each other out. I also take the initiative for my work and reach out to people in different departments to solve the problem. And with all the work that I have done, I start to love my job a bit more. October 2022 might be the best month I have this year, if not then the second-best. I would like to keep this going in the future as I will keep learning.

On the other hand, my personal life, well the events that happened do not directly affect me but it affects my parents. I would not go into details about what happened but these kinds of events put financial pressure on my parents, who have already been retired for many years. I am the main support for my family, and at my expense, I would spend about 20% of my income on my parents. I am thankful that I am able to stay and work in Australia because my uncle has given me that chance. My responsibility is to take care of my parents so that’s what I have to fulfill as a son. The relationship between me and my parents is good, which also makes it tricky when that kind of financial event happened. It was caused by a family member and this thing just keeps happening again and again. I am worried about my parents as they are the one who got affected directly by it, and since I am the one who supports my parents, it also indirectly affects me. The only way I can think of now is to take my parents to stay with me so I can take care of them personally. This is the reason why I really need to work on the house-hunting part. Dealing with such financial events drains my energy a lot, mentally speaking. Though this is a challenge that I need to overcome, I cannot let myself down because of this. I need to trust myself to keep moving forward and solve the problem. I sincerely hope that I have the strength and energy to overcome this. I love my parents and that is my motivation.

Attribution – Image by rawpixel.com on Freepik

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