Portfolio Performance Review
As cheesy as that sounds and as obvious as it is that this has been inspired by the State of the Union that happens in the US, I do think that State of the FIRE is the perfect name for what we are trying to do. We will conduct a portfolio performance review, not only of our combined net-worth but also a comparison of how Mr. Fireball’s Roboinvesting platform (Stockspot) is stacking up against my self-directed investments.
Here’s what our Total Net-Worth looks like as of 31 Jan 2020:
Total Assets – $132,331
Debt Outstanding – $0
That gives us a combined Net-Worth of $132,331, which is an increase of 15.8% on a per month basis over our Oct 2019 numbers. Not bad at all, given the markets have been pretty wonky lately. And we managed to get into the Six-Figure League. Woohoo!
(Wo)Man vs Machine
And now, let’s get ready to rumble!!
In the red corner we have the robo, in its full algorithmic glory, brandishing its bits and bytes, all ready for a fight.
And in the blue corner, we have the human, wearing her irrational and erratic investment behaviour as a badge of honour, hoping to outsmart the cold & calculating machine.
Let’s see who’s going to win this bout?
First up, the Machine.
Machine Portfolio Mix
What’s interesting to see here is the overall portfolio mix, with a contribution of only 58% towards growth assets and a very large 42% towards defensive assets. For a Growth Portfolio, this mix should have been around 70% growth and 30% defensive. It seems like the robo is being very cautious with the portfolio distribution. Is it perhaps because it sees a downturn coming?
The other point of interest is the geographical distribution of the portfolio, particularly the growth assets. About 74% of the investment has gone into Aussie shares while a very small portion, 26%, has been invested in the global markets.
You’ll see the returns have been split into Capital Gains and Dividends. Capital Gains are just the % increase or decrease in price of the ETF units from a particular starting point, in this case that is 1 Jan 2020. Dividends received are shown here as a % of invested value of the holding.
Gold & Global stocks (the majority being in the US) were the biggest gainers while the Emerging Market stocks were the biggest losers. The US markets have been breaking new records everyday due to strong corporate earnings while ignoring the threat of the Coronavirus outbreak, which is what brought down the Emerging Markets stocks and jacked up the price of Gold.
Overall the Robo delivered 3.9% returns, of which 3.4% came from Capital Gains while the remaining came from Dividends. Pretty healthy overall!
And now for the contender, the (Wo)Man!
(Wo)Man Portfolio Mix
The portfolio mix is very different for me. I have 79% invested in growth assets and 21% in more defensive assets. This would make my portfolio much much more riskier than that of the robo. Perhaps I should look at moderating this a bit and bringing my growth assets down to 75% of the overall mix.
The geographical distribution is also very different from that of the robo. With the largest proportion being invested in Emerging Markets, followed by Australia and then Global
In my portfolio too, Gold & Global stocks (the majority being in the US) were the biggest gainers while the Emerging Market stocks were the biggest losers. Interestingly, the Real Estate ETF performed just as well as the US stocks after being down for a while last year. The impact of the Coronavirus is clearly visible on my Emerging Markets ETF, IAA.
Overall my portfolio provided 3.63% returns, less than the 3.9% of the robo. While my Capital Gains returns were slightly better than that of the robo at 3.48%, my returns from Dividends were much lower.
So, all in all, Round Jan 2020 goes to the Machine.
But I’m still in the game. Who knows what the next portfolio performance review could bring…