My Passive Investments - August 2019 (-3.36%)

A short term look on long term investing

Disclaimer

So, what’s happened in August? Well, we were excited to partake in our first ever sponsored post for our travel blog, ‘Our Departure Board. We were sponsored by The Clydeside Distillery in Glasgow and I’m proud to say that we have a few more similar projects in the pipeline.

I also made my first sales from the new Capital Matters Online Store. For now, I’m selling a range of all-in-one finance spreadsheets for tracking Savings & Investments, Credit Cards & Points and Matched Betting. And, since 10% of store profits go to charity, I’ll be making my first of hopefully many donations to my current chosen charity, Cancer Research UK.

In investment terms, which is what you’re here for, let’s find out what happened in August 2019.

Of course, first, remember, my investment decisions are exactly that, my own. As as UK-based investor, I based each investment decision on my own research. These are, by no means, investment recommendations.

Before making any investment decision, you must do your own research and/or speak to a professional.

A Reminder Why I Do These Reports In The First Place

You can read more about this in my first passive investor report, which I made all the way back in June 2018.

My Passive Investment Strategy

Long term, my aim is to invest a portion of my savings every month. An important note here is that the numbers you will see in this report reflect the gains and losses of my invested capital only. When I invest more, for example, I would not state this as a gain in the value of my portfolio.

Similarly, if I sell a portion of my investments, this would not be stated as a loss in the value of my portfolio. The numbers simply reflect the performance of the underlying investments. Simply put, a loss/gain does not take into account buying/selling assets. 

Vanguard Stocks and Shares ISA

All investments are held in a stocks and shares ISA with Vanguard. You can contribute anything up to the limit of £20,000 in the 2019/20 tax year. When it comes to investment income/selling any portion of my investments, thanks to the ISA wrapper, any income/capital gain is tax free. 

August Returns (-3.36%)

As summer draws to a close, it’s difficult not to be thankful for the chain of cheery August news stories gifted to us by the media. Continuing US-China trade wars, yield curve inversion sparking recession fears, parliamentary prorogation. Please…my birthday isn’t until November.

To the shock of nobody, August returns were negative, at -3.36%.

However, unlike traditional media outlets, my job isn’t to scare you into panic-selling. It’s to set an example of what you should do at a time like this. Investment-wise?…Absolutely nothing.

Or, the polar opposite of what it seems like the media is trying to get you to do. I’m continuing to invest, I’m continuing to pound-cost-average. I’m continuing to buy in, each and every month, like clockwork.

25% of my monthly, after-expenditure savings, go towards investing. The other 75% goes towards my first home fund. And, at the end of the 2019/2020 tax year, I’ll shift that amount into my Lifetime ISA, where I’ll get a 25% government bonus on my deposits.

My investments are held in a Vanguard FTSE Global All Cap Index Fund, where the account fees are some of the lowest in the industry.

 
My Index Investing - Monthly Return - August 2019
 

Returns Since Inception (+11.91%)

Since I first started investing through Vanguard towards the end of May 2018, my portfolio has grown by 11.91%.

 
My Index Investing - August 2019 - Returns Since Inception - +11.91%
 

Annual Return (+7.71%)

From August 2018 to August 2019, my investments have returned +7.71%.

 
My Index Investing - Annual Returns - August 2019 - +7.71%
 

Sector Breakdown

Since I hold a one-fund portfolio, this is essentially the make-up of the Vanguard FTSE Global All Cap Index Fund. So here’s how my investments are broken down by sector.

My Index Investing - Investment Sector Portfolio Breakdown - August 2019

Compared to July 2019:

The technology sector (+0.6%) made a big jump this month. Apart from that, the only other sector to increase as a percentage of my portfolio was utilities (+0.1%).

Financials (-0.1%), Industrials (-0.1%), Health Care (-0.1%), Oil & Gas (-0.2%) and Basic Materials (-0.2%) all decreased as a percentage of my entire portfolio.

Consumer Services, Consumer Goods and Other Sectors haven’t budged this month.

To see how these sectors are defined, check out this section of July’s report.

Geography

In this section, you can see where my investments are, in different regions across the globe.

My Index Investing - Investments around the world - August 2019

Compared to July 2019:

North America made the biggest jump in my portfolio (+0.9%), followed by the Central/South American region (+0.1%).

Europe (-0.3%), the Asia/Pacific region (-0.4%), Japan (-0.1%) and the UK (-0.2%) now constitute a smaller proportion of my investments.

Middle Eastern/African and Eastern European investments haven’t changed this month.

Individual Investments

Here’s a rundown of the top 10 largest companies in the index fund I invest in.

I’ve made a slight change to the graphic this month. Before, an up or down arrow indicated a move in terms of position (ie. from 1st to 3rd largest). Now, an arrow simply indicates a change in percentage allocation (ie. from 1.5% to 1.6%).

 
My Index Investing - Top 10 Investments - August 2019
 

As last month, the top 10 remain the same as they did back in June 2019. The names remain the same but percentages and positions have altered.

Compared to July 2019:

Microsoft is still at number one (no percentage change), Apple is still at number two (+0.1%) and Amazon remains at number 3 (-0.1%).

Alphabet is still at number 4 (+0.2%) and Facebook is still at number 5 (no percentage change).

JP Morgan Chase has moved up to 6th position (no percentage change), swapping with Berkshire Hathaway, which has moved down to position 7 (-0.1%).

Nestlé has moved up to position 8 (no percentage change), swapping with J&J, which has dropped to position 9 (-0.1%). Exxon Mobil remains in 10th position (no percentage change).

In terms of my portfolio concentration in the top 10, they still for 10.6% of my overall investments. This number hasn’t changed from last month meaning my concentration in the top 10 remains the same as it was then.

Dividends

As I’ve said many times before, I love the fact that my portfolio automatically reinvests dividends. Since dividend reinvestment makes up a significant portion of investment return over the long term, that is my goal anyway. Therefore, an accumulating fund just makes the whole process a whole lot simpler.

Goals For September

  1. Continue to ignore the noise and invest 25% of my monthly savings. Put the other 75% to my home fund.

  2. Increase online store sales, affiliate income and ad income. The more I make, the more I can invest.

  3. Continue to seek out collaborative opportunities for ‘Our Departure Board’.

  4. Work on a secondary upcoming project for our travel blog (more on that later).

That’s all folks! As always, I hope you enjoyed reading this month’s report. What are your investment goals? Are you managing to ignore the noise and continue to invest or is the news taking its toll on your investment confidence? Let me know in the comments down below.

If you’re looking for resources to better your own personal finances, here are some of my recommendations:

Facebook - UK Passive Investing Group - Join A Like-Minded Community

My offers page. Earn some free money, grab some free points and get yourself some free products.

Rich Dad, Poor Dad by Robert Kiyosaki

The Little Book of Common Sense Investing by John C Bogle

The Intelligent Investor by Benjamin Graham