Tuesday, January 01, 2019

Financial Review – December, 2018

December saw a further reduction in net worth with losses in equities compounded by adverse currency movements. The end result was a 2.12 percent decrease in net assets.

For the year to date, the portfolio is down 3.96 percent. The adjusted change from when I retired in September 2013 is a 21.61 percent increase. Hong Kong liquidity stands at 39.90 months of estimated outgoings, significantly increased from the start of the year's 26.68 months due to net asset sales and a new mortgage loan.

Here are the details:

1. my Hong Kong equities fell. I added a few more shares in CK Assets (HK:1113) to the portfolio;

2. my AU/NZ equities were were down ... again. There were no new transactions;

3.my equity ETFs were down (India, Hong Kong and China) in line with the local markets;

4. my position in silver was more or less unchanged. I slightly increased my position in silver;

5. all tenants are paying on time and all properties are let;

6. the AUD and NZD were down against the USD/HKD;

7. my position in bonds remains modest. There were no additional purchases this month. Recent interest rate increases have pushed the holding values of some of my bonds to  below par - since I intend holding to maturity (other than a solitary perpetual) this is not a problem. I have a margin facility in place and my carry trade is doing its thing and generating a small amount of additional income;

8. expenses were moderate as I low as we did not take a holiday this Christmas.

My HK cash position rose during the month due to full occupancy on the properties and a number of dividends being received. I currently hold 39.90 months of expenses in HKD cash or equivalents (up from 26.68 months on 1 January). 

Total household gearing ((debt+accruals)/assets) is 8.85% of total assets – with a partial pay down in a margin facility offsetting declines in asset values. Property prices are as at 1 January, 2018 and will not be marked-to-market until year end and I do not net off cash. With a mark-to-market of equities, bonds and FX this number will fluctuate even if the amount of debt is being slowly amortised.

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