Updated: Oct 1, 2022
Here's an update on the portfolio's performance.
If you have missed my portfolio review for 2021, please check it out here.
2022 Performance YTD
My Portfolio: -25.44%
Vanguard 500 Index: -16.22%
Performance since inception (Jan 2021)
My Portfolio: -24.01%
Vanguard 500 Index: 7.65%
A green month in July has some of us thinking that the downtrend of the market might start to show some reversal. This idea was quickly dismissed towards the end of August after Powell delivered a pessimistic speech which sends the DJIA diving a 1000 points. In the speech, Powell reiterated the need to combat high inflation and warned that high interest rates might be here to stay for a period of time. High interest rates are never a good thing for risky assets and hence the market reacted accordingly.
I ran a poll in my Telegram group recently and many people share the same sentiments that high inflation will have the biggest negative impact on the U.S. stock market.
Aside from the U.S. stock market, the situation in China has also been worrying with the real estate crisis. In a recent article, it's reported that the earnings from Chinese property developers in the first half of 2022 shows a drop of 87% as compared to the results in the first half of 2021. And that's probably not the bottom yet. Most of us probably know how fundamental the real estate industry is to the economy of China and it's definitely worrying to see that the situation is still not getting better. I wrote an article 2 weeks ago when the market was showing some signs of bullish momentum and warned about the possible implications that the China real estate crisis could bring. You might check it out here.
August is yet another red month in the year. Volatility is certainly high as you can see that the market constantly alternates between positive returns and negative returns on a monthly basis. Again, the most disappointing constituents in my portfolio till date remain to be ARK ETFs. After getting a green month in July from a consecutive 8 months drop, it now returns to its original course. To be honest, this is probably hardly surprising with the high interest rate environment. I don't foresee the ARK ETFs having any turnaround until there is a clear path towards lowering interest rates.
Bitcoin is on the negative again in August. The strong correlation between Bitcoin and technology stocks is very apparent in recent months with the only difference being Bitcoin suffers from a higher volatility. Nonetheless, I didn't expect Bitcoin to perform well right from the beginning of this year and this has always been a long play.
They often say that patience is the most underused skill in investing and I'm sure a lot of us will be tested on it in the coming months.
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