Thursday, March 31, 2016

Financial Review - January, February and March, 2016

Apologies for the lack of updates. No real excuse - just giving priority to other matters like getting my novel "finished" and sent a professional copy editor.

January was a terrible start to the year with the portfolio down by 5.84%. February saw a small recovery of 0.35% and March a much stronger 5.11% increase. For the year to date, I am down 0.4%, which is less than difference between expenses and my part time income.

Here are the details:

1. my Hong Kong/China equity portfolio is still below where it was at the beginning of the year. I have added shares in HSBC (HK:5), Swire Pacific (HK:19) and Rosedale Hotels (HK:1189) and sold my shares in Herald Holdings (HK:114);

2. my AU/NZ equities appreciated. I purchased additional shares in Fletcher Building (NZX: FBU);

3.my equity ETFs fell slightly (India, Vietnam, Hong Kong and China) in line with the local markets. I sold my interests in the Vietnam ETF at a loss;

4. my commodities are about flat for the year. Silver is my only position;

5. all tenants are paying on time. We are back to full occupancy with one tenant agreeing to a small increase in rent for a new lease. The US rate rise has had no impact on Hong Kong mortgage rates;

6. the NZD and the AUD are currently flat against the HKD/USD;

7. my position in bonds remains small;

8. expenses were moderate for the first three months of the year. I expect expenses to be higher with high travel expenses in July and December and, possibly, some tuition fees starting later in the year;

9.there were no transfers to Mrs Traineeinvestor.

My cash position improved slightly due to low expenses. I currently hold 35.0 months of expenses in HKD cash or equivalents. 

Saturday, January 23, 2016

2016 - Moving forward

2016 has the potential to be an interesting year, but don't they all?

Finances: From a financial perspective, the main object remains unchanged: to ensure that we can maintain our current lifestyle without returning to the workforce indefinitely. I recently did a review and even supposing a modest drop in dividend and rental income, the recent declines in share prices and Hong Kong property values have not threatened our retirement. From a cash flow perspective, we are slightly negative (looking at only the Hong Kong based assets) until May 2021 when the mortgage on our home is paid off. However:


  1. the deficit is covered twice over by Hong Kong cash on hand;
  2. can be reduced by shifting investments into higher yielding securities; can be reduced by investing the excess cash;
  3. will shrink a bit when the mortgage on one of our investment properties is paid off in June 2018; and
  4. has a partial backstop of in the form of income from assets held outside Hong Kong.
I will make a few changes to the portfolio over the next few weeks (one has been done already) to boost income a little and, give current equity valuations, will probably deploy some of the excess cash as well.

In short, our finances are fine.

Writing: After a multi-year delay, the novel is almost ready to be sent to a copy editor by the end of the month, after which it will be self-published as an e-book and available by print on demand. I may try to sell it to publishers but am not optimistic given that I know that much better writers than me have been unsuccessful in securing a publishing contract. Regardless, after four (?) years it feels great to be able to say that I have (almost) written a full length novel. I also have a rough outline + character sketches for the main characters so my second writing objective is to write a substantial amount of the second novel and be in a position to self publish by the end of 2017.

Fitness: I am starting the year in good shape. I finished the Hong Kong marathon in a slow time and (so far) appear to be injury free. Subject to getting in trough the lottery, I have signed up with a team for the Hong Kong Trailwalker (target time is 30 hours but I hope that will come down to closer to 24 hours if all goes well).

Other: I intend to continue with both my part time job (interesting and a little extra cash is always welcome) and the current volunteer activities (interesting and it's nice to give something back) but have no plans to expand either as that would (i) intrude on other activities and (ii) feel too much like work. The more substantial other is the possibility of doing another degree - I enjoyed the MFA experience a lot and, among other things, it left me with an interest in literary theory. The issue is that the application deadlines for 2016 start have been and gone so I would probably not be able to start anything until September 2017 which seem like a long time to wait. Also, I would want to do either a research degree or a part time degree which narrows the options considerably.

2015 Annual Review

2015 was, in many respects, a memorable year.

The financials started the year with a bang but then deteriorated rapidly as equity markets tanked, HK property prices retreated from their high water marks and the AUD/NZD deteriorated. In spite of which, household net worth rose 0.19 percent for the year. Obviously, the first few weeks of 2016 have seen a significant reduction in asset values and I will be looking at the impact on my retirement funding shortly.

A potentially serious health issue which arose in October 2014 was "finally" resolved in May 2015 (subject to six monthly check ups for the indefinite future). Fortunately the medical insurance offered through Generalli was excellent and covered most of the costs. Not so fortunately, the side effects of the medication did a hatchet job on my fitness and the distraction of researching the medical issues delayed work on other projects. Happily, all that is now six months behind me and I need a new excuse for my continued procrastination.

I completed my master's degree mid-year with distinction (the highest classification for a part-time degree) and a minor academic award for one of the papers I wrote. This was a great experience and, in some ways, it was disappointing that it came to an end.

The novel was not finished. While I can blame my medical issue in part, the more substantive reason was that the MFA experience motivated me to substantially redraft luge chunks of the novel. In any event, it is going to a copy editor by the end of January and (hopefully) will be self published sometime in April or May.

My fitness deteriorated a lot during the first half of the year but picked up once I was off the medication to the point where I was able to amble around the HK marathon last weekend (in a very slow time - even by my very slow standards) and am very happy to be back into it.

My (very) part time job and volunteer activities went as expected and I have no plans to change either of those at this stage.