25/04/2020
Ok so I said I was going to explain how my “diversified” portfolio is in fact behaving how it should be.
Let’s use the post I used yesterday as a template and lay parts of my portfolio on top of it.
Cash- stays where the fuck it should be, whatever is in your account after debt and bills are paid, get distributed into the rest of your portfolio.
Abhis’ portfolio – can’t be bothered to login into my bank account to tell you how much cash I got I’ll drop that knowledge like I always do, when I get paid!
Stock and shares- Most of your excess cash goes into here. Mainly because for the last 10 years we have been on the biggest bull market ever so you just see your money make more money, but at the same time you think you’re really being a genius for “your” stock picks.
But when the market goes into turmoil…… most people start fucking flapping and want to protect their losses so they either sell and go back to cash or buy bonds and gold.
Abhis’ portfolio – So we all know that shit has hit the fan with the stock market and my total loss for my stocks and shares is 13.1% atm.
Bonds – This is usually a small percentage of your portfolio however when stocks and shares start to drop loads of the flappers start buying the same bonds. Demand outstrips supply so you notice the value of your bonds start to (or at least should) increase.
Abhis’ portfolio – My bond ETF is up 7%, which is basically in line with what I wrote above (Thank-you Flappers!!)
Gold: Again this should be a small percentage of your portfolio and again much like the bonds, flappers start to buy more gold and so the value of the gold you’ve bought starts to increase in value.
Abhis’ portfolio – The money that I have invested in gold is…….. wait for it 39.63%!!!!!!!! (Thank-you flappers again)
Now I have way more money in Stocks and shares (as I should do), I’m also not going to sit here and be like “oh because I’m diversified, I can’t lose money!” because I have lost money lol.
But just imagine if I was 100% stocks,,,psychologically it would be a tough pill for anyone to swallow. Coz all you will see is RED MINUS RED MINUS and you will either go one of two ways, you’ll get scared and cut your losses (which in most cases is the wrong thing to do) or try to buy something to make up for your losses (which is almost always the wrong thing to do).
Being diversified, (not just in a financial portfolio) trumps every time!
Think about it, it’s better to listen to all types of music, it’s better to play a range of sports, it’s better to read loads of different books on different topics, it’s better to watch a wide range of films (The Joker, WHAT A SICKKKKKK FILM), I could go on forever but you get the picture!
I’ve calmed down with this whole investing malarkey because on not focusing on performance I’m actually focusing on it’s behaviour and for the most part it’s behaving the right way!
Which made start thinking, how the fuck am I going to teach this to my future kids?
POKEMON.
Listen this might sound crazy but if you have any children between the age of 9 and 13, go get a Nintendo Switch and buy them either Pokemon Shield ( if you want the chance to catch a Zamazenta) or Pokemon Sword (if you want the chance to catch a Zacian).
Why?
Because in order to be a great pokemon trainer you have to understand diversification. There is no point having a level 100 Charizard that can get murked by a level 50 Blastoise which in turn can get killed by a level 25 Pikachu.
Having a well rounded team of a Charizard, Blastoise and a Pikachu all at level 70 will help you progress further into the game.
Then guess what when your kids turn into attitude giving mouthy fuckers but want to make money and don’t know where to start. You can just drop the line “ remember when you played pokemon?” and they will defo give you a weird look BUTTTTTT.
When you connect your charizard to their stocks, your Blastoise to their bonds and your pikachu to their gold, they will thank you for helping them to connect the dots.
Don’t let them be like me and wait till they’re 31, teach them now and they will elevate themselves and you to levels you didn’t think were imaginable!!!!!!
I think I’m getting paid next week so will drop another Net Worth post in due course.
Laters
My players and playettes