Monday, October 6, 2014

October 2014 update ($ 318,479 -$13,808 or - 4.2%)

Accumulated $4,000 USD as part of my annual saving goal for October
Received $ 350 as quarterly dividends for my holdings in S&P500 and Emerging markets ETFs.
Vanguard S&P500 ETF gained $1,100
Grand total additions: US$ 5,450

EUR lost $11,983 towards USD
GBP lost $1,470 towards USD
RUB lost $900 towards USD
Vanguard emerging markets ETF lost $710
Gazprom shares lost $3,000
Company shares lost $670
Rosneft shares lost $525

Grand total losses: US$ 19,258

Financial independence from the very beginning - http://www.Niterainbow.com
Observations:
-         I received almost equal dividends for my S&P500 and Emerging markets ETFs ($ 159 and $190).  However, S&P500 costs $41,110 and Emerging markets $16,800.  This represents 1.5% annual dividends for S&P500 vs. 4.5% for the emerging markets ETF.
-         Euro zone struggles significantly in comparison with the USA.  Exchange rate is lowest in 2 years, while British pound is at is lowest for the last year.  RUB is dropped to new low as well.  European Union countries keep arguing with each other and imposing sanctions on the neighboring countries, which does not help the recovery from the crisis.
-         Dividends wise from the current portfolio I am getting are $8,500 or 2.6% annually after taxes.  This is currently covers about 10% of the annual expenses.  
-         With only two months to go I will be short of $44,000 of my annual financial independence goal at the current portfolio condition.

2 comments:

  1. Ouch. That's pretty rough dude (o_O)
    It looks like Europe is really struggling. At least you have the $8,500 passive income to help you with yearly expenses. That's good.
    North American markets have lately felt the negative sentiment of the global economy too. The Canadian stock index is down 8% from this time last month so you can imagine my portfolio isn't doing so well haha. I think both our updates for the upcoming month will be interesting :)

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  2. Hi Liquid,
    Thank you for stopping by. I agree that it does not look pretty and it is not what I was hoping as well. On the other hand even if I reached by annual goal of $370K, the dividends would stay the same. So there will be some moral satisfaction but literally no gain, towards financial independence. Even now S&P500 generates less below 2% a year, this is almost as high as inflation.
    I think the trend will continue, as my personal impression that there has been no recovery, only controlled recession. Governments and financial institutions elected not to change the business model, but continue to do it as usual, while injecting more paper money in the economies.
    At the very best the trend will continue, i.e. emerging markets will keep generating 4-6%, while developed to hover around 1-2%. Developed countries do not need more money, as CEO already have no idea where to inject capital:
    http://www.niterainbow.com/2014/09/s-500-lacks-of-insiration-and-talent-to.html

    In the short term I will be focusing on re-balancing portfolio and keep on working. I do not think there will be a short term solution towards my financial independence. I think it is a case of keep saving money for at least another 20 years.

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