August has been a rather important month for me, it marked my return to the place that I consider a second home, Japan.
It was for work, as I was taking a group of people on a tour that I have designed, organised and eventually conducted there. But even if the occasion was business, Japan is Japan, it holds a very special place in my heart and in my life, and having the chance to go there (I have been countless times so far), it’s still special.
Even if I get to see the same old stuff, even if I get to visit the same old places… It doesn’t matter, it makes me understand how lucky I am at having had the chance to know a language and a country like that!
Investment wise the month has been pretty uneventful, mostly because half of the month I was away and could not really work on investments all that much. I did managed to get some trades in, but the strength of an investment strategy such as the one that I am following is that really it doesn’t require any human intervention at all most of the times.
I might have lost some opportunities, especially on the Italian side, as the market corrected quite heavily on political rumours, but this is not so much of a problem, opportunities come and go, I have learnt that by now…
Explanation of terminology and graphs is HERE.
Let’s see the numbers:
Net Yearly YoC is increasing (vs. previous month) – Slowly but steadily the the Net Yearly Yield is growing towards the 3% target for 2018. With 4 months to go I start wondering if the PF can get that 0.30% yield to reach the target. It’s not going to be easy at all…
TR is decreasing (vs. previous month) – Record set in July was not adjourned in August. No worries of course, markets (especialyl Europe) was a bit underwater and TR shows the short movements, it’s a statistical measure only, nothing to worry about.
Forex is getting better (vs. previous month) – Dollar getting stronger and pound staying still provided a moderate improvement in the forex effect on the PF. I have updated the formula to calculate this percentage so that it takes into consideration dividends paid and their exchange rate at the time (fiscally it’s how they get taxed). In time (a lot of time) this effect will mitigate the difference between actual exchange rate and the rate I got when I bought forex.
In total terms August 2018 was worse than last year, by 9.05% to be precise. As it happened for previous months, the real difference comes from the options trading, especially after I have decided to switch to a more conservative approach, while in 2017 I was much more aggressive with the trades I placed. As usual, being the situation under control I am not worried about this result, there are very positive points to underline.
August closed with a 1446 Euro result.
Dividends accounted 1069 Euro (+50% vs.2017) and Options ended up with a 377 Euro (-54% vs 2017).
Again a month above 1000 euro is always a good month at this present stage. Dividends are growing in a very strong and consistent way, the core action of the LH Portfolio is all there and the aim is to create a constant growth year over year. I will not be able to match growths from 2016 and 2017, now that the portfolio is “matured” there are less additions to be had, but I am confident to have a double digit growth also il 2018.
None to report
New Positions – Sold Positions
None to report
Nothing to report
August was a transition month, European markets suffered over several reasons, and I am getting more and more aware of the poor situation of my UK holdings. Unfortunately thanks to Brexit and a great dose of uncertainty surrounding the whole process and the country itself, stocks in England have taken a bit of a beating, it seems that markets are trying to understand where the apple will fall when Brexit will become a real issue.
There is no much sense in trying to predict the odds, I wanted to close some positions that I feel might be at risk, but it’s a very far fetched theory and since I am really bad at predicting stuff like that I am holding that shot at the moment as I will only sell if the stock gets back to the average price at least.
There are talks of recession as usual, surely Trump mid term will add to some volatility in the mix, but so far I can only see a lateral/moderately bullish phase continuing at the horizon.