Friday, March 12, 2021

February 2021 update ($709,783 +$14,076 or +%2.0)

↑ Financial independence savings for last month $2,000
↑ Emerging Markets Stock Index Fund is up by $1,373 or +0.8%
↑ Eurozone Stock Index Fund is down by $4,404 or +3.3%
↑ US 500 Stock Index Fund is up by $1,207 or +0.7%
↑ Global Small Cap Index is up by $7,438 or +5.1%
Grand total additions: $16,423 USD

↓ EUR is down to USD by $2,456 or -0.8% for my portfolio
Total losses: $2,456

February 2021 Financial Independence update


The investments are steady. Almost touching symbolical figure of $700K. Assuming 24 years before retirement at 3% inflation adjusted growth, the money will double without any additional investments.  With additional investments maybe I can reach $2,000K in today’s money in 24 years.

 So-called high-yield bonds in the USA fell to 3.9 percent, the inflation in 2020 was about 1%.  In 2013 Microsoft raised 10-year coupon at 3.63, it was rated as triple A. It was not considered a high yield back then.   In 2008 yields reached 6.8 per cent. If US economy takes off this year, rising interest rates will erode the value of today’s low coupon bonds.

 Additional risk is inflation. Western banks printed $6.6tn to support the financial markets since March 2020. Current market evaluation includes expectation of additional $5.8tn. Even US dominated IMF has to double its inflation forecast expectations to 1.6%, which is real word means at least 2-3%. 

 The same governments still have refused to fight homeless and child poverty for decades and still do so.

 Despite the coronavirus pandemic, in 2020, the world’s five wealthiest individuals saw their collective worth increase by more than $250bn. Financially, those on higher incomes have suffered less than low skilled, low-income workers and the young, with the three categories have been hit especially hard but those in power and the rich. Not only is the pandemic’s economic impact likely to linger, global inequality is worsening, with no obvious remedy in sight.

 The United Kingdom and the United States have imposed an outright ban on the export of vaccines or vaccine components produced on their territory. The EU allowed its companies to go rogue, selling and exporting vaccines outside of the EU. This will have impact on the economy recovery from the pandemic.

 In the UK there is possibility to invest money into a tax-free account for kids. During the lockdown average annual contribution more than doubled per child ($1,800 to $3,900).

 Fun Fact: During the lockdown with people sitting at home and doing very little, there is sharp decline in babies born 9 months or more on from lockdowns in France, Italy and Spain.  The decline is between 21.6% to 7%.

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