Changes in the Financial Markets in 2018
- Canadian dollar weaken from 0.80 to 0.73 USD.
(Less purchasing power and more expensive imports, such as food from the U.S.)
- U.S. dollar index up to 96 from 92.
(Non Americans pay a higher premium to buy U.S. investments.)
- Stock Markets:
- Most markets around the world dropped in 2018, especially Emerging and Asian markets.
- Canadian S&P/TSX stock index fell about 12%
- U.S. stock market fell about 6%
- Canadian Aggregate bond index ETF (ZAG) total return = 1.8%
It wasn’t a great way to end the year but on the whole I’m pretty happy with my situation. The last quarter has been the worst for my net worth performance so far. But the good news is I’ve still gained $96K overall in 2018 thanks to a great first half of the year. 🙂 Below is my net worth update for December.
Liquid’s Financial Update
*Side Incomes: = $3,400
- Part time job =$1100
- Freelance = $800
- Dividends =$1000
- Interest = $600
*Discretionary Spending: = $2,000
- Food = $300
- Miscellaneous = $800
- Interest expense = $1300
*Net Worth: (ΔMoM)
- Assets: = $1,211,300 total (-14,300)
- Cash = $20,400 (+600)
- Canadian stocks = $155,800 (-6800)
- U.S. stocks = $112,700 (-4700)
- U.K. stocks = $19,400 (-1000)
- Retirement = $114,900 (-2500)
- Mortgage Funds = $34,500 (-200)
- P2P Lending = $33,600 (+300)
- Home = $275,000
- Farms = $445,000
- Debts: = $418,800 total (-1400)
- Mortgage = $189,900 (-400)
- Farm Loans = $180,000 (-400)
- Margin Loans = $48,900 (-600)
*Total Net Worth = $792,500 (-$12,900 / -1.6%)
All numbers are in $CDN at 0.74/USD
At the end of 2018 my net worth has grown to $792,500. This is a $95,900 increase from the previous year’s end when I had $696,600. It’s not a smooth progression, but I’m grateful to be going in the right direction overall. 🙂
2018 was a bit of a strange year. I lost my job, stocks entered into a bear market, and interest rates climbed 3 times. This series of events has never happened to me before so it’s been fun trying to navigate the new economic landscape.
In terms of what I want to do for 2019, I will be changing my financial strategy a bit. Here are some themes I plan to focus on.
- Preparing for higher interest rates. Should the Bank of Canada continue to increase rates this year I will be drastically reducing my debt.
- Buying more bonds. It wasn’t until the recent stock market correction that I truly realize how fixed income investments can keep volatility at bay. Investment grade bonds rated A and BBB currently pay over 4% coupon. It’s not a bad alternative to equities these days.
- Reassess how I calculate the value of my primary residence. My initial method of using my purchase price + inflation isn’t keeping up with reality anymore. How do you guys value your real estate when calculating your net worth? Do you use the government assessed value, or get someone to come appraise the property?
Random Useless Fact: