Update for Copiers.
Afternoon all.
We are almost done with February and the month currently sits at +11.44%.
It’s been a very strong month with the epicenter stocks finally making some strong moves as the UK arrived at the 22nd February and the unveiling of the lockdown exit plan and the situation in EU settling down after some concerns about health services becoming overwhelmed if the situation with the new Covid variants got out of hand.
Equities are now at 64.38% of portfolio value. In mid-January we had 21.31% in cash and I was busy researching companies and making a broad range of small investments. The bulk of that work was completed coming into the end of January and cash balance is now down to 3.21% as a result of capital being allocated ready for the epicenter stocks to recover into the Summer.
Bonds are at 11.28% of portfolio value. I did take one new small position on $TLT as bond prices have been falling as yields started to rise. The US 10-year briefly clipped 1.60% last week but I think it can go further before the end of Summer so I’m still waiting for cheaper bonds prices and bigger equity profits before doing some rotation.
Precious Metals are at 8.31% of portfolio value. It’s been a bad month for the precious metals with $GOLD and $SILVER both down about 6.5%. I’ve been expecting this and again why I previously laid out the plan to only buy on weakness. I’m happy to eventually arrive at 15% in precious metals and if Gold can breakdown and head towards $1,600 in the next few months I will make a more purposeful move to increase exposure. For now I’m happy with us holding <10% as nothing is certain and you never know when something might happen to send Gold racing back towards $2k.
Crypto is currently at 9.27%. As a low-risk investor is difficult to give us much exposure to a mostly unregulated asset class, but the small amount I put into them towards the end of 2020 has been increasing in value and that is fine. I have no plans to boost exposure further due to the risk factor but unless their value surges to 15%+ of the portfolio I will not take profits to rebalance either.
Hedges are at 1.65% of portfolio value. I closed the forex hedges I had running to cut portfolio leverage to zero after the problems we have been experiencing with the eToro platform during busy market times. The remaining hedge is a single position on VXX and I need to consider what approach I want to take with hedging on eToro in future.
Cash/Trades is currently at 5.11%. I trimmed a little bit of profit from our trade on $HMMJ earlier in the month but still have 3/4 of the position open. As mentioned above, most of the cash available last month has now been invested into the epicenter stocks and we can hopefully not look at boosting cash levels again until the Autumn. The bit of cash we do have is currently reserved for a dip in bond prices.
In the short-term I am happy with the portfolio structure. The big date for us is April 12th when we will hopefully see non-essential businesses in the UK open and set the scene for a wider recovery in the UK investments which are focused on the economy getting back to a more normal situation for Summer.
In the medium-term I think the bond yield situation is something to watch carefully if the monthly data on inflation and consumer prices start to confirm a trend in inflation pick-up. We saw the power of bond yields on the markets last week with US stocks being put quite strongly into the red until bond yields retreated on the last trading day of the month.
So we head into March with some overhanging concerns about yields but also plenty of upside potential for the portfolio with our epicenter stocks still heavily depressed in price because of lockdown and international travel restrictions.
Good news on vaccine progress leading to falling deaths and hospitalisations should become a tailwind that will win out against the yield story overall I think.
Many thanks for your time.
