Wednesday, April 01, 2015

Financial Review: March, 2015

March was another good solid month for my investments.

Net worth was more or less break even.  Asian equities appreciated, more or less offset by small falls in my Au/NZ equities and in commodities and slightly unfavourable FX movements. Expenses were high as I expensed the remaining half the cost of renovating a flat.

Here are the details:

1. my Hong Kong/China equity portfolio increased. I added HSBC (HK5) and sold China Starch (HK:3838) and Sichuan Express (HK:107);

2. my AU/NZ equities fell. There were no transactions this month; equity ETFs appreciated (India, Vietnam, Hong Kong and China) in line with the local markets. There were no new purchases;

4. my commodities fell slightly. Silver is my only position;

5. all tenants are paying on time. One property is vacant and is currently undergoing renovation;

6. currency movements were negative with the NZD and the AUD being flat;

7. my position in bonds remains small;

8. expenses were high due to expensing half of the renovation costs of a vacant rental flat;

9.there were no transfers to Mrs Traineeinvestor this month.

My cash position fell. I currently hold 32.1 months of expenses in HKD cash or equivalents. 

For March, my net worth was unchanged. Effectively, the portfolio generated enough positive return to cover the difference between my part time income and our expenses and the cost of the renovation work. The year to date increase is 1.69%.

Portfolio changes

A couple of weeks ago I decided to add HSBC (HK:5) to the portfolio. With a trailing yield of just under 6%, adequate capital adequacy and the battering of a series of scandals, I hoped that the share price had been pummelled to the point where not only had all the bad news had been priced in, but the market was anticipating more bad news.  I paid $65.50 for most of the shares I purchased and $67.40 for a small additional parcel.

Since I wish to keep a reasonable amount of cash on hand and would also like reduce the number of shares in the portfolio, I sold China Starch (HK:3838 and my smallest investment) at a loss and Sichuan Express (HK:107, a smallish investment) at a profit. Both of these companies have recently released disappointing results which followed previous disappointing results. The former has been blighted by significant increases in administration/marketing expenses and the latter by government polices adversely affecting toll roads.

Monday, March 09, 2015

Traits of Happy Retirees

This post about the 18 traits of happy retirees on the excellent Bogleheads forum caught my attention. We hit most of the 18 items on the list:

1. our pre-retirement household income was above the USD97K threshold for happiness. Given the cost of living in Hong Kong and that we have two school-age children, a high income was pretty much essential to saving enough for early retirement; PASS

2. our post-retirement household income is above the USD82K threshold for happiness. See1  above; PASS

3. our liquid net worth (cash, marketable securities, commodities) is well above the USD500K threshold. See 1 above; PASS

4. do we have a well defined understanding of our purpose in life? Once I get past raising children and feeding the cat, I'm not sure about this one. I have plenty of things to do (current and proposed) but am not sure if they amount to a "purpose"; FAIL

5. I have the 3.5 core pursuits - writing/reading, studying, exercise, family, charity & professional. I am also very goal orientated which helps; PASS

6. home value is miles above the USD300K threshold - which is hardly surprising given Hong Kong property prices; PASS

7. we do have a mortgage and there is about 6.5 years to go on it. Given current interest rates, it makes more sense not to pay it off early (which we could do); PASS

8. we are married; PASS

9. we have two children. I assume this and 8 above are representative of a more generic "family" trait; PASS

10. we have multiple sources of income; PASS

11. we spend much more than 5 hours per year planning for retirement; PASS

12. our spending level is well above the USD53K per annum threshold. See 1 above; PASS

13. we live in a city; PASS

14. we eat fast food occasionally. Hong Kong being Hong Kong, I'm not sure what counts as fast food here but, on the whole, we have pretty average dietary habits; PASS

15. we don't own a car; PASS

16. we tend to shop at middle range stores; PASS

17. we usually take 2-3 vacations a year; PASS

18. both myself and Mrs Traineeinvestor graduated from university. PASS

Of course, all this is based on a survey and is no more than a smorgasbord of average responses. The two most obvious things missing from the list are (1) health and (2) environment - which is very surprising. My own take is that a happy retirement is best founded on:

A. solid family relationships
B. financial security - not necessarily affluence but enough to avoid sleepless nights worrying about putting food on the table in 20-30 years time
C. engagement - just keeping socially, mentally and physically active. Just being curious about things is a good place to be
D. health - something we take for granted until we don't have it