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Portfolio Update – December 2022

uehiFinance

Portfolio Summary

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

  • Raiz Aggressive Portfolio – $12,227.1 (1.23% according to app)
  • VDHG (using VPI platform) – $69,659.85 (2.30%)
  • IVV (Selfwealth) – $573.30 (8.23%)
  • SYI (Selfwealth) – $2,127.51 (7.48%)
  • VISM (Selfwealth) – $488.52 (-1.95%)
  • A200 (Selfwealth) – $2,015.52 (2.65%)
  • Cryptocurrency – $27,766 (-55.31% from principle)
A breakdown of my current asset allocation:
  • Australian Shares – 31.26%
  • Global Shares – 37.44%
  • Bonds – 6.8%
  • Fixed Income Assets – 0.32%
  • Cryptocurrency – 24.17%

Portfolio Total – $114,857.8 A decrease of 0.9% compared to last month’s value ($115,909.4).

This month’s saving rate is 26.18%. I mentioned in my last month’s post about not investing much this month to save more money for my holiday trip. It’s kind of a lie, but I have limited the amount of investment. My contribution to Raiz is still the same for this month at $100/week, $700 for Bitcoin, and $2,000 in VPI. A total of $3,100, which is half of what I usually put it. Still a decent amount, but I expect I would not invest much in January 2023 since I am still on holiday during the first 2 weeks so my income is reduced to half. Half of my income usually goes toward my regular expenses (food, bill, etc…) and to support my parents.

Thanks to the payments from my freelance this month, I am able to sort out nicely between the investment and the money for the holiday trip. Though, I already received an email from the ATO to pay the tax this quarter. And it’s a lot. I am thinking to work more during my holiday to cover for this quarter’s PAYG. Furthermore,  there are many purchases this month that I have not expected, which led to a significant increase in spending in December. There are reasons for these purchases:

  •  A new Ledger – I have decided to move Bitcoin, Cardano, and Litecoin to a cold wallet. With all the recent news about the collapse of FTX and Binance FUD, it is better to have control over my fund and only leave a small portion on the exchange. It is quite expensive to have one, though it could be used for 5 years according to the website, so I say it is a good investment to have peace of mind.
  • Gifts for my holiday trip – besides my purchases, I also had to pay more since my dad has asked my auntie and uncle to buy more. The bill came as a surprise but was expected.
  • Allowance to spend during my holiday trip – that’s another $2,000. It’s like a custom to give money as a gift when you return from overseas, in my case I have to give each people at least $100 to my relatives.

As I told myself in the November 2022 blog, I have decided to buy a cold wallet to store my own crypto. The setup is quite easy and I can stake my ADA in Ledger Live, which is convenient. I now have full control of my Bitcoin and will continue buying Bitcoin on the exchange. I will only move my Bitcoin out of the exchange when a certain limit has been reached (probably $1,000 USD worth of Bitcoin), to avoid a high transaction fee.

With all the expenses and as expected, the saving rate is really low, which could drag the performance of the whole year down. I can put an exception to exclude this month’s calculation for my total saving rate for the whole year, but that would make it a bias. I have decided to include this month’s saving rate so I can have a better understanding of the overall picture. It will be the benchmark for my future analysis. This data can be trusted as it reflects real-life scenarios when things might not go as well as you think. It’s a small celebration for me as it has been a wild year, with investments and my new job.
 

Average Saving Rate for 2022 – 59%. I am quite happy with this number even though it’s below the target about 11%. Though this year has shown that things will happen eventually and I cannot avoid it, I need to adjust the plan accordingly. I have accomplished quite a lot this year.

Note: A reminder is that this number is still an estimation only as my crypto portfolio consists of different assets, including NFTs, staking, and 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

Let’s start with the general news

  • On 30/11/2022, The monthly CPI indicator rose 6.9 percent in the 12 months to October 2022, and we can see the inflation has slowed but remained high.
  • On 01/12/2022, PCE at + 6.0%, below estimate by 0.2% (6.2%), with core PCE at 5.0%.
  • On 05/12/2022, OPEC+ agrees to stick to its existing policy of reducing oil production ahead of Russia sanctions.
  • On 06/12/2022, RBA announced another rate hike. They increase the cash rate target by 25 basis points to 3.1%. The report shows that the inflation in Australia is at 6.9%, which is pretty high.
  • On the same day, the US market, “Monday’s close marked a negative start to the trading week. The Nasdaq Composite led the downward charge, dropping 1.93% to end the session at 11,239.94. The S&P 500 shed 1.79% to end at 3,998.84, followed by the Dow’s 1.4%, or 482.78 points, slide to 33,947.10.” – CNBC
  • On 07/12/2022, Morgan Stanley cut about 2% of global staff, which is around 1600 employees. At the same time, PepsiCo is planning to cut hundreds of jobs. This shows how the market is slowing down, and we are heading toward a recession. Everyone is waiting for FED in the next meeting.
  • On 10/12/2022, the wholesale price rose 0.3% in November, more than expected.
  • On 14/12/2022, the inflation number is out. According to CNBC – “The consumer price index rose just 0.1% from the previous month, and increased 7.1% from a year ago, compared with respective estimates of 0.3% and 7.3%”. Markers react positively to this news.
  • After FED speech, markets do not think it’s a good move anymore. Jerome mentioned the rate could go up to 5% and then stop. However, FED is somewhat not hawkish about the future, as inflation in the last 2 months has gone down a bit, but still not enough to persuade FED to stop the rate hike.
  • On 15/12/2022, ECB increases its rate to 2%, from 1.5%. They also mentioned that they would need to raise rates “significantly” further to tame inflation.
  • On 20/12/2022, according to CNBC – “The Bank of Japan caught markets off guard by tweaking its yield curve control policy to allow the yield on the 10-year JGB to move 50 basis points either side of its 0% target.”. So, Japan finally gave up and started tightening the money supply then.
  • Elon Mush is also searching for a new Twitter CEO, because Tesla’s shareholders are not happy with his recent obsession with Twitter. This has tanked the price of Tesla share recently.
  • On 28/12/2022, Tesla saw the worst day with a drop of 11%, and this is still not a pre-covid level.
Crypto news
  • Bitcoin closed November at -16%. 
  • On 29/11/2022, the FTX collapse was the main reason and people are using this to push for regulators. Senator Lummis said it’s time for Congress to learn about Crypto.
  • On 02/12/2022. Ankr protocol has been hacked. However, the hacker tried to move the fund to Binance, so the amount has been seized now. Meanwhile, a trader took advantage of the situation and was able to exploit Helios Protocol, withdrawing about $15.5 million BUSD.
  • Another interesting piece of news, Apply now demands 30% of the in-app purchase through a blockchain fee, or else Coinbase Wallet will continue to be blocked. I don’t know about you but this is ridiculous. The fee is from the blockchain and does not have anything to do with the wallet itself.
  • On 03/12/2022, a report shows that Genesis owes $900M to Gemini.
  • On 07/12/2022, SushiSwap Chief says the treasury is only enough for another 1.5 years. A suggestion is to divert all the fees received from liquidity providers to the swap so they can cover the cost of operations. This looks pretty bad.
  • People are now attacking the crypto space. US Sen.Cythna Lummis has now turned around and said that Ethereum is a security. Michael Saylor also voiced his opinion as a Bitcoin maximalist. This is due to the court case between Ripple vs SEC.
  • On 13/12/2022, Binance encountered FUD after FUD, especially with the new report from Mazars. 4 main reasons were pointed out – company structure, customer funds guaranteed at 97% or 101%, the APU method, and the internal liquidation process.
  • And finally, Sam Bankman-Fried has been arrested in the Bahamas.
  • On 14/12/2022, 3 officers – SEC, CFTC, and SDNY pressed charges against Sam Bankman-Fried. SBF is in so much trouble now.
  • On 17/12/2022, the auditor Mazars who audited Binance a couple of days ago has now stopped the services for all crypto platforms. This sparks fear in the market, and Bitcoin dropped below $16,600, and altcoins are in a bloodbath.
  • On 19/12/2022, SBF shocked the courtroom by demanding to see a copy of his federal indictment before agreeing to return to the U.S., and his defense team was in shock. He has been sent back to jail, waiting to be in court again.
  • On 20/12/2022, Binance US would set to acquire Voyager Digital assets for a $1.022 billion bid, as FTX is no longer the highest bidder.
  • On 21/12/2022, SBF will fly to U.S. Wednesday to face criminal charges after a chaotic day in court yesterday.
  • On 22/12/2022, one of the biggest crypto mining companies Core Scientifics filed for bankruptcy because of debts.
  • Caroline and Gary Wang also plead guilty to the federal charges. We see what will happen to SBF when he comes to the US.
  • On 27/12/2022, SEC Chair Gary Gensler says that – “a crackdown on the crypto industry is imminent in the wake of FTX’s high-profile collapse”. This is a wake-up call for them to regulate the crypto markets after the collapse of FTX.
  • On 28/12/2022, Fidelity filed three patents related to Web3 products and services, including an NFT marketplace and a crypto trading platform in the metaverse. This is a signal that big companies think this is the right time to look into the crypto market.
  • On 29/12/2022, Michael Saylor bought another 2,500 Bitcoin for $45M. Still don’t know how he got money to buy the dip.
The collapse of FTX still affected other companies during the month of December. Regulators are looking to regulate the crypto market and using the FTX event as a way to legitimize anything they want. FTX has now become an excuse for everything. There seems to be a group of coordination attacks toward Binance this month. Lots of news coming out said that Binance does not have 1:1 support for Bitcoin, regarding the Proof-of-Reserves, although there are many questions related to the report provided by Mazars. The problem with accounting for a big crypto company is the amount of risk an auditor would take to do the audit. The Big 4 Companies have refused to do the audit because they are afraid if one of the firms collapsed, the auditor would need to take responsibility and collapse as well. We saw a tremendous amount of coins going out of the exchange. I, myself was also shaken by the news and have decided to buy myself a cold wallet to store Bitcoin. It is better to be safe even though I have a lot of trust in Binance. SBF is now facing criminal charges and waiting for trial in the U.S. A a wild month it has been for the crypto market.

FED has also announced its target for 2023 and would likely hike the rate a few more times and then observe the effect. We have seen the CPI numbers cool down (but still remain high), which shows that the rate hike is working its magic. Though FED still needs more proof before stopping raising rates.
 
With all the news this month, I was expecting a large decrease in the total portfolio, but we only see a small decrease of 0.9%. I was expecting the crypto portfolio to drop more, but I believe since I have been DCA-ing to Bitcoin this year, more than 50% of my portfolio is now in Bitcoin, which makes the drop in other altcoins seem small (considering it has been dropping like more than 90% since the start of this year). The stock portfolio has again come back down regarding a solid performance last month. Raiz and VDHG are now in the negative territory of the return. We might forget that we are still in a bear market and people are predicting a recession in 2023, which I think would likely happen. Companies are laying off more people this year and if this keeps going, we will see a recession for sure, but at the same time, the inflation is coming back down to the 2% target level. My portfolio is holding quite well (my opinion only) regarding the current market conditions, but I might be wrong next month (January 2023). We have had many rallies this year and all of them have created lower highs every time. It’s going to be more painful in the future but let’s see. Our strategy is still DCA-ing and is still on track this month (with a little setback from the holiday trip), and I believe we only have another year to accumulate. Let’s head toward next year and see what’s waiting for us. Stick to the plan and you should survive just well.
 

Some of the articles I use for the information above:

Passive Income

This month has produced about 11.55 ADA. SOL and ONT rewards are small. BAT reward is 21.03 BAT. Staking reward for AXS for this month is about 0.293 AXS. Staking for IMPACT is 2877.3857 PACT.

To sum up:

  • ADA Reward –  11.55 ADA.
  • SOL and ONT rewards – the reward is not large enough to consider.
  • Brave Reward –  21.03 BAT.
  • AXS Staking –   0.293 AXS.
  • Impact Staking – 2877.3857 PACT
  • Dividend – $462.66

What I have learnt

Keyword for this month – Holiday

After a while, I finally had my first vacation in a long time. I booked my trip for Christmas and would be back 3 weeks later.  I really need this holiday after all the hard work that I have put in this year, juggling work between my full-time and freelance. I felt stressed most of the time and needed a break to clear my mind. And to make it worse, during this month, there was a massive layoff at the workplace and I was feeling scared of being sacked at any moment. To be fair, I was prepared to be fired at any time but since I was planning for my trip, I really need the salary to cover the expenses. I was not in bad shape, but the idea that my plan was not working as I expected was making me nervous a bit. I still got the income from my freelance work but it would not be enough to cover the expenses. I will go into more detail in the next paragraph, but fortunately, I am still needed to work on the project until March 2023, but not sure if the company still needs me after the project. The worst case scenario is I will just find another job anyway or work full-time at the company that I have been freelancing for 3-4 years. It’s a small size family business and needs an IT professional there to maintain the systems as well as improve the infrastructure and the applications. It would be a new learning experience for me as a sole developer and as a tech lead for the company. Let’s see how that goes after my holiday.

A major event this month has to go to the massive layoff event that happened right before the Christmas holiday. This is the most insane thing that I have ever seen. As a contractor, I would expect to be laid off any day but to turn up one day and receive the bad news that you would be gone in a week, that’s just absolute madness. The sole reason for all this downfall was because of the budget. We got a budget cut this year and many projects have been canceled or postponed indefinitely. Many contractors were really upset with the way the layoff was handled. The fact that they fired people left and right just before Christmas, left people speechless. This is still legal but unethical in a way. The challenging part is to find new jobs next year when the RBA is raising the interest rate, and companies are firing people. It would be tough to find a new job next year unless you have a backup plan somehow. And this is the problem when they fire people in my team, 2/3 of them are now gone. Most of them were also working on the project that I am currently still in. It made the people who have not been laid off yet in a difficult situation, since we do not have the resources that we need to do our job efficiently. Our Scrum Masters, Business Analysts, and Testers were laid off, and they only kept the developers to finish the project. I am really worried about the project and if it’s even possible to meet the deadline. Anyway, that’s not my fault, I have presented this risk before so I would not repeat myself and take any blame on myself if it does not meet the deadline. For some reason, I was put as a Technical Lead for this project.

This year has been a successful year, in term of my career. The amount of knowledge I have gained this year is incredible. I have more insight into Angular Framework. I am able to write code more efficiently as I understand concepts that I have not gone through when I worked in my previous job. Having a senior developer (or a Technical manager) who can help giving advices on the technical level is a must. It would take me longer time to figure out all of this by myself. I am grateful to have this opportunity. The salary is a bonus this year, as I was not expecting this salary, but then again I am a contractor so there are risks associated to it. And the recent event is the proof that I need to have a backup plan for my career. Having a proper mindset is the key to the success this year – be something that people will depend on, not the other way around. Always enhance and improve the skills needed to perform your tasks. This is the mindset that I used to go through this year. There were challenges along the way but they can be overcome as long as you are always aiming to learn as part of your journey. I give my respect to my colleague that have been giving me great advices since I started working at my current job. He has been professional and helpful in any situation. As he always told me “It’s a journey”. It’s been a fun journey I would say. I wish you, the readers, all the best next year, just remember it’s a journey and don’t stress yourself too much.

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