I just updated our 30 Sep 2017 numbers and these are the percentage increases of our assets and net worth:
- Cash: +0.52%
- Investments: +2.92%
- Retirement & Medical: +1.15%
Net Worth: +5.07%
It was a significant month for us in terms of investments as we started our monthly Dollar Cost Averaging (DCA) of the Vanguard UK-listed ETFs. In addition to the automated banking monthly investment plans and robo-advisor accounts contributions, we are gradually starting to push more cash funds into the markets.
The decision was made to be more aggressive with our investments after reviewing the asset allocation percentages. Despite the fact that we are both relatively young, working in full-time jobs and drawing salary income, we are too conservative with our cash utilisation.
Being overweight in cash as a position is one thing. Having close to half the portfolio in cash just means we haven’t been managing our asset allocation percentages well. This is our attempt to rebalance them more effectively by leaning towards the equities component. It should take us about a year to change it to a growth portfolio.
We are entering the last quarter of the year 2017 and this is the time where we start to get ready for our annual performance reviews at work. We look back at our achievements, failures and determine the areas of improvement for career progression. It is also a good time to think about how we want to position ourselves for the new year 2018.
We have managed to survive our respective divisional restructuring so far but the job and economic environment continues to be uncertain. We don’t have a clear path forward but at least we know we are not moving backwards. With the risk of retrenchment coming back down to more manageable levels, we can afford to reduce our cash buffer against job loss.
It’s easy to get bogged down with work, daily life and lose sight of the big picture. Asset portfolio management is an essential skill we need to build up because it sets out the high level goals that we are trying to achieve. From there, we build the roadmap and pay attention to the detail.
Even though we should keep ourselves focused on the tasks, we have to keep aligning the actions taken with the overall objectives. It’s a delicate balancing act between being a big picture thinker and detail oriented. We just got to keep juggling between the two to make this work.
Economy has been improving since mid-2016 …. just that it takes a while of lag time to translate into the jobs front. Similar to property market too hahaha!!! No surprise as property cycles are tied closely to jobs & salary growth. Should be good till at least mid-to-end 2018.
Heheh can I say it’s a stereotypical occupational hazard for accountants to focus more on the details?
I suppose the challenge will be to stick to the asset allocation & to do rebalancing during the tough times. Too many people back-track & de-risk their asset allocation in the midst of bear markets or after crashes … and they basically end up buying high & selling low. Hence the classic Dalbar studies showing individual investors consistently underperforming even the expensive mutual funds, let alone beating the indexes.
Yup, I’m hoping the economy and job environment can continue to improve. Not too worried about the property cycle for now since we are already staying in our own apartment. Haha, accountants do have a tendency to focus more on the detail!
I reckon it’s a big challenge to stick to the asset allocation and do rebalancing throughout the economic cycles. As you said, the tendency is to do the opposite. It’s a major issue that we are trying to overcome as well.