Hello fellow investors and casual readers,
February was again a very busy month for me at work. However, I can definitely see the light at the end of the tunnel as I’m in the final stages of the engagements for my most important clients. In the next few weeks last business trips are ahead of me and after that I will be only in Bratislava. Moreover, I finally have something to look forward to as me and my girlfriend finally booked the flight to the Azores, Portugal, which was our dream destination this season.
Investment wise the February was a very turbulent month for investors all around the world. The global stock market took kind of unexpected hit due to further spreading of the corona virus. People started to prepare for the apocalypse or at least it looks like it when I’m at the supermarket, but the main problem seems to be the risk of recession caused by the ceasing of production and restrictions on international traveling and business. The good thing is newly introduced no handshake policy as I have never been a fan. So I finally don’t have to explain it to other people and getting those weird looks.
Jokes aside, my portfolio took a significant hit as well, but as I’m all about long term I’m not that concerned. Moreover, every market drop is an opportunity to improve your dollar average. The situation is a little more complicated in bonds and crowdlending where the current development doesn’t favor the debt investors as the credit risk is increasing. More stimulus from central banks is expected, but let’s be honest, stimuli of ECB are currently more like an addiction rather than anything else. But we’ll get to it later.
To recap, the stock market is down, crypto is down a little and real estate crowdfunding is also down because I had to pay some up-front fees for new platform I’m testing. The only part of my portfolio in green numbers is crowdlending mainly because of EUR 25 sign-up bonus for Austrian real estate development crowdlending site Rendity (LINK for EUR 25 sign-up bonus you will get after the first investment but it is really soon to review this platform from my side). Thus, this month really sucked in terms of profits.
I’m still trying to withdraw all my funds from Mintos but as I have the policy of not offering any discounts in secondary market, it’s going really slowly as interest rates increased a little from time where I bought my loans. Therefore, I’m basically waiting for loans to default, so buyback guarantee would be activated by loan originators. My plan for next periods is waiting for good opportunity in the stock market. I’m mainly looking for airlines which suffer a lot nowadays, but I expect that this is just a short-term drop.
I distributed my free cash to some new sites (Rendity, Reinvest24 and FinBee) to test the those platforms before the market drop occured. I would probably not do it after that, but I don’t plan to withdraw my funds immediately. I’ll definitely see how it goes and how the platforms are going to react to market drops. Maybe we will see some interesting opportunities in their secondary markets as well.
As always, don’t forget to read My Investment Policy Statement and My Financial Situation to understand the environment in which I live and invest. This will help you to understand my financial goals and how much I’m able to put aside.
Current Portfolio Value
As of 29.2.2020 my portfolio’s value is EUR 11,830 so my initial investment of EUR 11,360 has brought EUR 470 of total profits. Compared to last month, my investment in crowdfunding platforms increased from 23% of my portfolio to 30% as of 29.2.2020 due to increase of my stake to test new platforms and due to decrease in value of instruments which are heavily invested in the stock market. There were no withdrawals in my portfolio in February 2020 and cash is now at 2% of my whole portfolio from 12% at the end of the previous month.
Regarding fulfillment of my financial independence goal of EUR 500,000 I have currently 2.37% of that amount which is an increase from 2.18% achieved at the end of the previous month.
You can read about more details of each category HERE. Currency wise, my portfolio consists mainly of EUR denominated investments (80%). There was no significant currency exposure change compared to previous period.
As Warren Buffet’s says, rule number 1 is to never lose money. Except for real estate crowdfunding on Reinvest24, where I had to pay up-front fees to invest in a project, I’m glad that as of 29.2.2020 all of my instruments are profitable. Most of my profits are now achieved from crowdlending which is an important shift from high dependency on stock market comprising of index funds, mutual funds and individual stock picks. However, I assume that this will change in the future as I plan to invest more heavily in stock in upcoming period.
Portfolio Development in February
In February 2020 I did manage to meet the plan of net investments of EUR 1,100. I was able to invest EUR 1,269 and my monthly return was EUR -354 which is a loss of 3.2% of the opening balance as of 1.2.2020 (the plan is monthly profit of 0.5%). As mentioned, the loss was caused by the market drop caused by investors’ worries over corona virus throughout the world.
Regarding my investment allocation in February, I invested mainly in P2P (FinBee – testing of new platform – EUR 700). My cash position prepared for future investments decreased significantly by EUR 1,084.
Portfolio Development in 2020
Regarding my goal for 2020, I have 2 main goals. To invest EUR 1,100 monthly and to reach the value of portfolio as of 31.12.2020 of EUR 25,000. In terms of profitability, this year hasn’t been so far the greatest ever, but we still have 10 months to go. Hopefully there will be more of those green bars in there.
Plans & Summary
My plan for next month is to invest in American stocks through Revolut Trading (my watchlist currently consists of 20 companies where price is close to the attractive price for which I would be buying). Any further fluctuations in the market can make stocks in this watchlist even better opportunity as they are now.
And that’s it. I’m one step closer to my financial independence goal and so far so good. The market is not growing constantly and some losses were definitely expected. And as I already said, every market drop is an opportunity.
Good luck to everybody in March. Times like these are very important so invest wisely and most importantly, be careful.