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TJH Financial Year end

A helpful place to also put any annual reports etc, of your own portfolios
1nvest
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Re: TJH Financial Year end

#301654

Postby 1nvest » April 18th, 2020, 9:19 pm

Arborbridge wrote:... but not with BRK. ...

I only used BRK for its no dividend policy - as a example. Would be way too much single stock risk to hold excessive amounts in a single stock.

plus gold which I've always seen as rather useless.

I get that - for when we were on the gold standard and you could convert money directly to gold and vice-versa. Pointless holding a lump of metal when you could hold paper gold (money) and deposit that money in a bank and earn interest. Since the US ended the gold standard however its been a different story. Without being pegged by something finite and physical (gold), money has been 'printed' at leisure. Each new note printed devalues all other notes in circulation, is a form of micro taxation where the legal counterfeiter gets to spend those new notes at the cost to all others. And boy is that being abused.

Gold is a longer term cyclic holding. Markowitz originally said “I visualised my grief if the stock market went way up and I wasn’t in it — or if it went way down and I was completely in it. So I split my contributions 50/50 between stocks and bonds.”. A variation of that is to split 50/50 between both half in stocks, and half in £ (gold is a form of global currency). Yes the FT All Share has a large chunk of earnings from foreign, but more than half of firms tend to hedge their foreign currency 'risk' in order to better stabilise earnings being reported in £ such that even the 'global' diversified FT100 is still quite a heavy £ play.

A accumulation (total return, all dividends reinvested etc.) 50/50 FT All Share and Gold, yearly rebalanced since 1970 for gold saw ...

Image

and for stocks ...

Image

where the value of each (which being 50/50 rebalanced is interchangeable)

Image

Slightly more annualised reward than just all-stock alone.

Diversifying and rebalancing between two assets (FT All Share and gold) when one has long cycles (gold) will tend to see more ounces/shares being accumulated over some extended periods, decumulation over other periods and vice versa for the other asset. Even as a lump of metal door stop (all gold) the broad longer term rewards have been OK since having come off the gold standard, but very subjective to time periods within that. More productively employed, trading it (via simple yearly rebalancing between stocks and gold) and its been more consistently productive. Some investors like to focus upon price appreciation (growth), others target income (dividends), yet other focus upon volatility trading (Options), fundamentally they should all broadly compare in reward as if that were not the case then investors would converge onto the consistently more productive choice. Diversifying across each is generally considered as the more appropriate.

I visualise my grief if stocks or the Pound or gold went way up and I wasn’t in it — or if stocks or Pound or gold went way down and I was completely in it. Another variation of that is to diversify across Pound (UK stocks), primary reserve currency (US stocks $) and global currency (gold). For a US investor that is 67/33 stock/gold and as this link indicates the rewards have been also been reasonable in the US also https://tinyurl.com/yaafva7a - marginally better than just stocks alone and in a more consistent/less volatile manner (better risk adjusted reward).

1nvest
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Re: TJH Financial Year end

#310045

Postby 1nvest » May 19th, 2020, 6:19 pm

I use Linux and LibreOffice, so some of the charts dates (X axis) in this exported (to Excel xlsx format) look too large (at least for me) when viewed online. Downloads and views in LibreOffice ok however, so may just be my browser/setup).

https://drive.google.com/file/d/1axWKB2 ... sp=sharing

There are comparison charts/data to the extreme right of the 'Data' worksheet that compare to Terry's TJH Accumulation total return. Whilst TJH's Accumulation is down for the more recent (fiscal) year, prior gains had it relatively ahead, so still up overall compared to a equal blend of UK stock, US stock and gold. 5 year rolling annualised gain however for TJH Accum is near zero, so any dividends over those years drawn/spent would in effect be drawdown of total return into negative territory (in nominal terms, so even more so in real/after-inflation terms). Note that the comparisons are calendar years versus Terry's fiscal years, so not true yearly comparisons.

1nvest
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Re: TJH Financial Year end

#318777

Postby 1nvest » June 16th, 2020, 11:16 am

Gold being a global currency, along with being a commodity, and a three way fiscal yearly rebalanced equal split of TJH Accumulation, BRK and Gold has you currency diversified across £ (UK HYP), US$ (primary reserve currency), global currency (gold) ...

Image

In these times of governments playing debt expansion Russian Roulette - sooner or later we might see one enduring a hyperinflation (flight from the currency) event, and the cost of insurance against that would seem to be relatively inexpensive - even free.


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