Personal thoughts - October 2023

I've decided to start a monthly commentary of the recent market levels, the state of the economy as per my reading of global news and provide a summary and a personal thought of the current state of affairs.

I've been doing that in a short regular journal in an Excel file for myself. It provides me a very useful account of my thoughts and the reason of my various financial decisions at the point of writing. I reckon it'll help me in the future, as a review of how I was wrong or correct, and serves a reminder to my future self on why I should always be passively invested at most times, and hopefully all the time.

As of writing on 8th October, the market had suffered a mini drawdown. S&P retraced to 4300 levels, with YTD gains of ~12%. Nasdaq pulled back to 13400 levels with YTD gains of ~28%. Forward PE from WSJ is 19.2 and 21.1 respectively. Both at slightly elevated levels, meaning valuation is not cheap. Of course, as we will eventually understand, no one can predict the market levels and things can get more expensive from here. Or just bounce around current prices. Or fall further from here.

The bigger story is on the sharp rise of longer term bond yields, with 10 years Treasury touching 4.8%. In recent months when the US index were at a higher level, it makes sense to tilt regular contribution to bonds instead of equity. I was doing just that and the market slapped me with even higher yields resulting in bond losses. Nonetheless, this move haa beaten investing into equity as the draw down is around 7% from recent peak compared to 2%(?) for bonds.

I've been deploying regular leftover cash from employment to a few platforms like Endowus and MoneyOwl. That has continued for September last month. Current plan is to do ad-hoc top ups via Endowus to S&P 500 fund, by transferring some funds from the cash management portfolios.

Also have topped up a small monthly contribution to Lion Global All Seasons Growth fund as per my long term plan.




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