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2023 Q3 Portfolio Update: Hitting a speed bump

After having a good return of 25% in H1, my portfolio hits a speed bump in Q3.

2023 Performance YTD

My Portfolio: 19.19%

Vanguard 500 Index: 12.95%

Performance since inception (Jan 2021)

My Portfolio: -11.5%

Vanguard 500 Index: 18.64%

(Based on an arbitrary starting amount of $10,000)

Unfortunately, the momentum gained in H1 couldn't be continued in Q3. By the end of Q3, my portfolio's YTD returns had dropped from 25% to 19%. This drop of ~4% for my portfolio is quite similar to the performance of the S&P 500 index (which drops 3.7%). NASDAQ drops 4.1% and DJIA drops 2.7%. All three major indexes suffered the worst quarterly loss since last year's third quarter. All in all, my portfolio has very similar performance to the major indexes this quarter.

The main reason for the drop in the indexes is relating to an expectation that inflation is going to be around for longer and also the Fed's hawkish stance towards the economy. Rate cuts are expected to happen later in 2024 and hence a prolonged period of elevated interest rate looms over the economy. Investors are thus more cautious and adopt a risk-off approach, leading to the sell-down in the market. For the indexes, most of the losses are concentrated in September. In the case of my portfolio, most of the losses are concentrated in August though as that is the month when most of the constituents in my portfolio post a larger loss.

For an overview of the YTD performance of the constituents in my portfolio, refer to the below table.

The China related equities continue to be in the red. In fact, MCHI continues its slump and is now further in the red. ARKG had a huge reversal from being +20% in return by end of June to posting a negative 1% return YTD by the end of September. Almost all the constituents in my portfolio have a negative growth in Q3 with the exception of BRK.B and Shell. Energy continues to be the best performing sector with crude oil prices surging to 11-month high (can anyone still remember when most people thought that O&G stocks are all doom and gloom three years ago?)

Again, I am not making any changes to the portfolio choices for now. The next review of the portfolio choices will come on 1 Jan.

I also do share additional content in my Telegram channel. 210+ like-minded investors have already joined this channel. What are you waiting for?

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2 commenti

Chess game99
Chess game99
26 ott 2023

Hi, i saw your poll and analysis you did recently ie "Results reflect the reality of most people being loss averse. Theoretically, the second option has an expected value of $3200 (calculate 0.8 multiply by 4000 plus 0.2 multiply by 0). This value is higher than $3000 (option 1) so the realistic option that ple should choose should be option 1. However, ple tend to choose option 2 as it has a factor of potentially losing nothing. This highlights the nature of loss aversion in most of us."

I wanted to reply to your telegram directly but realised that channel is closed. So posting here. I am not often in telegram as well ...

Can i know if you view…

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Risposta a

Thanks for reaching out! Glad to know that you enjoy my work :)

Probability wise, I guess option 1 ($3000) is always the better option. The situation reflected in the question do resembles how we treat our portfolio positions too. You can either take a direct loss in a losing position by selling now (option 1) or hold on to the position which could potentially drop even further or might eventually (option 2). Most people tend to choose option 2 like what’s reflected in the survey question due to loss aversion even though it might not be the most logical choice.

Of course, things are more complicated and not as black and white as the question posted. There are factors…

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