On investing…

or… the benefits of entrusting your savings to professional money managers..

I finally managed to sit down for my investment check up for the first 7 months of 2020, in what has been a wild year on the markets so far…

Some interesting observations, which are prompting me to rethink my portfolio.

Roughly speaking, I got:

  • Cash / cash like stuff – since job situation is rather fluid these days, my goal is to have roughly 2 years of expenses in something very safe and liquid
  • Investments opportunistic – generally the money i can “play with” in current market dislocation. These are equity ETFs, held rather short term, I’m trying to keep the portfolio flat most of the time. at the time of writing this, this portfolio is only about 20% invested.
  • Investments long term – these are buy & hold, individual equities and ETFs, few bond ETFs. these funds are for 5-10 years horizon
  • Retirement funds (401k, IRA)
  • College fund (tax advantageous)

So,

out of these accounts, some are “professionally managed”, and some are “Natalia’s managed”.

On average, one type returned -1%, another returned +32% simple interest (not annualized). Can you guess which is which?

Correct, the “Natalia’s managed” returned so far +32%. The temptation to annualize is big, but I’m not going to do it – it was a nice run we had since mid March, but lets face it, the run is over.

What are the conclusions?

  1. Natalia is an investor from God. Warren Buffet, move over
  2. Natalia will continue earn 32% every 7 months from now on
  1. It’s been an amazing market recovery fueled by other forces than health of the economy (thank you very much, dear Fed)
  2. What goes up, must come down (always does)
  3. “Mom & Pop” investors in the US, which are behind this rally, have now tasted the sweet temptation of easy profits, and will fight hard to keep the illusion of getting richer
  4. Too early to dismiss professional money managers as worthless, I’ll keep at least 2 of my accounts with them – one 401k and one long term investment, so they can rebalance between taxable and tax-free to save some money on income tax. Of course they preformed worse than someone who invests in NASDAQ ETF, but hey, that strategy might not be repeatable 🙂

So…. I don’t think its time to completely get out of the market, but its time to diversify..

i started looking into commercial real estate (CRE) crowdfunding options. Sounds scary and exciting, if anyone has any experience with it, let me know!