What’s in the news?
The Trump, is in the news. He gets more than enough coverage without me adding to it.
From the point of view of what affects portfolios like mine, a few things happened
Tariffs. Lots of chat, lots of yo-yoing. Not good for larger businesses. Possibly quite good for smaller ones?
War, lots of yo-yoing. Might it/they stop? Or might Russia become more terrifying.
Defence spending is clearly going up, though I suspect by less than the claimed amounts.
Longer term, the life of the US Dollar as reserve currency has shortened.
What’s going on with me?
My personal life was quite busy in February. I visited the UK city with the most caves (anybody know?), I had a short break in the Canaries, I enjoyed some time on the South Coast, I went to a play in East London. Busy, good busy.
Markets in Feb
Vanguard World Equities (VWRL) fell 3.5% in February, but UK Equities (which are <4% of World Equities) rose 2%. US Bond aggregates were up over 2%, though international (non UK/US/Aus) bonds dropped 1%. So your market benchmark very much depended on which markets you are benchmarked against. But the top does seem to have come off the US S&P ‘bubble’… let’s see how it unfolds in the next few weeks.
My weighted benchmark rose 0.5% on a constant currency basis; my non-GBP currencies fell 1.5%, so my benchmark dropped 1.5%. Being overweight the UK and underweight the US is currently a good place to be. As a result my index’s fall was a lot better than VWRL, which I tend to track quite closely.
My portfolio in Feb
As it happens my portfolio *did* track VWRL closely, by falling considerably, by 2.8%. My tech exposure was not helping me.
For a while I have been slightly overweight International (non UK/USA/Oz) equities. Right now, this is probably a useful tactical overweight.
I also went slightly overweight cash – and reduced exposure to the US – earlier in the year. That has left me with the perfect shock absorber for the declines in the portfolio so far.
Already, as I write this, I know there will be more to say about March. Until next month….
Appendix – press clips