Aside from those unfortunates who are paying with their lives, ultimately the economic cost of the Covid-19 pandemic, and the mind-boggling amounts being spent by governments around the world on 'stimulus', 'safety-nets', and myriad expenditures to simply to to keep the modern socio-economic order from falling apart, will be paid by... you and me.
For all the media coverage of 'government expenditure' we have to bear in mind that governments do not have any wealth or income per se. Everything the government owns is, essentially, owned by 'the people'. And, ultimately, all government revenue is sourced from 'the people'. Either via direct income taxes on 'the people', or company taxes (which eventually get paid via 'the people' as costs for goods and services, or via 'the people' as investors when company revenues get squeezed), or via loss of value of existing savings via inflation if the government decides to simply 'print more money' (and hence inflate away the real value of the debts they are accruing). Ultimately every dollar that governments are currently spending to support the economy, provide resources to health care services, guarantee wages or provide stimulus payments or pay unemployment benefits is a dollar that 'the people' eventually have to pay back. It's a bit like a gigantic, unfunded insurance policy where those currently (and in future) fortunate enough to have a job (or savings/investments) will all have to contribute to pay out benefits to individuals or companies that need immediate assistance.
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Monday, 30 March 2020
Sunday, 29 March 2020
Putting a toe into the water
Despite the ever-worsening Covid-19 situation (things in Europe and Australia are bad and getting worse, we have yet to get any real sense of how badly the US is handling its outbreak, and almost no reliable data on most of the developing countries' situations) Wall Street and hence other stock markets such as Australia seemed to stabilise a bit late last week, with several days of market gains. So I decided to start cautiously buying back into my previous ETF positions (QUAL, VAS, VISM, CGAD, VSO and MVW) last Thursday night, starting with a small tranche ($5K) of QUAL. But the 'limit' order I initially placed for QUAL overnight didn't get filled (the price spiked higher on opening), so I had to modify the order to 'market' on Friday morning (only to see the ASX drop back in the afternoon). That used up my available credit on the Commsec ML account, so I then had to transfer some cash into the account.
I transferred $50K (borrowed on my SGB portfolio loan) into my Commsec ML account, so I'll be able to purchase several tranches of $5K in the other ETFs that are on my 'list' during the coming weeks. This may well not be the 'bottom' for this bear market, but as a 'long term' investor with (supposedly) a high risk tolerance, I have to start reinvesting at some point.
My current total investment portfolio (excluding our SMSF) is shown below:
The ASX200 is about 33% below its high of 20 Feb, and the S&P500 is about 25% below its high of 19 Feb, so making some further investments at the current levels seems reasonable when you take a long term (10+ years) view of where the market is likely to go once the Covid-19 pandemic is 'history'.
I had tried to sell my CFS GGSF, VIISF and VLHGF holdings back in early Feb (I phoned to relevant funds to redeem the units) but it turned out that because they were collateral on my margin loan accounts a phone redemption could not be processed, and a paper form needed to be printed, signed and lodged (scanned and uploaded for Colonial First State, or faxed/mailed in the case of Vanguard). I did do the paperwork to transfer our SMSF investments in the Vanguard High Growth Fund into more conservative investments, but didn't bother doing it for my SGB ML account. Having already moved our SMSF investments into more conservative options I decided to retain some market exposure (not a great decision in hindsight). In the case of my CFS geared global share fund investment on the Commsec ML account I initially was told that a phone redemption was OK, but a week later found out that a form needed to be signed, scanned and lodged. I didn't bother to proceed with that redemption, which is probably the worst decision I made back in February. My worst decision in March was probably buying some Westpac shares too soon, but that was a relatively small investment amount.
What my worst investment decision in April turns out to be is anyone's guess ;)
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I transferred $50K (borrowed on my SGB portfolio loan) into my Commsec ML account, so I'll be able to purchase several tranches of $5K in the other ETFs that are on my 'list' during the coming weeks. This may well not be the 'bottom' for this bear market, but as a 'long term' investor with (supposedly) a high risk tolerance, I have to start reinvesting at some point.
My current total investment portfolio (excluding our SMSF) is shown below:
The ASX200 is about 33% below its high of 20 Feb, and the S&P500 is about 25% below its high of 19 Feb, so making some further investments at the current levels seems reasonable when you take a long term (10+ years) view of where the market is likely to go once the Covid-19 pandemic is 'history'.
I had tried to sell my CFS GGSF, VIISF and VLHGF holdings back in early Feb (I phoned to relevant funds to redeem the units) but it turned out that because they were collateral on my margin loan accounts a phone redemption could not be processed, and a paper form needed to be printed, signed and lodged (scanned and uploaded for Colonial First State, or faxed/mailed in the case of Vanguard). I did do the paperwork to transfer our SMSF investments in the Vanguard High Growth Fund into more conservative investments, but didn't bother doing it for my SGB ML account. Having already moved our SMSF investments into more conservative options I decided to retain some market exposure (not a great decision in hindsight). In the case of my CFS geared global share fund investment on the Commsec ML account I initially was told that a phone redemption was OK, but a week later found out that a form needed to be signed, scanned and lodged. I didn't bother to proceed with that redemption, which is probably the worst decision I made back in February. My worst decision in March was probably buying some Westpac shares too soon, but that was a relatively small investment amount.
What my worst investment decision in April turns out to be is anyone's guess ;)
Subscribe to Enough Wealth. Copyright 2006-2020
Thursday, 26 March 2020
Diet 2020 Wk 12 - week ending 22.MAR.2020
I haven't got my weekly macro summary figures to report, as I'm working from home and haven't updated my daily figures for the past week or so as I had a uni exam yesterday and didn't have much spare time. I'll probably do some catch-up data entry this weekend and report two week's of data next week.
Regardless of what the exact figures turn out to be, I know that my weight has slowly been increasing and I've been eating too much junk/snack food while stuck at home. I also have only been walking about 5,000 steps/day while at home (especially as its been raining quite a bit for the past week), compared to over 10,000 steps/day when commuting to work. Combined with not going to the gym (gyms are now officially closed by government edict) or to Kendo training (indoor sports are also banned), I'm eating a lot more calories and burning off a lot less. So the inevitable result of having a calorie surplus is to gain weight.
So I need to set myself a strict meal plan and schedule to avoid browsing or snacking during the day and after dinner, and I also need to do some more walking and do some more weight training at home using my barbell and dumbbells.
I did manage to find my old skinfold calipers yesterday, so took a set of skinfold readings and used an online calculator to calculate body fat using various equations. The calculated body fat results were:
Formula BF%
J-P 7 pt 15.98%
J-P 3 pt 13.71%
J-P 4 pt 15.10%
Parillo 15.86%
D/W 24.89%
Navy tape 25.33%
There is significant variation in the results, depending on which formula is used, but the values close to 17% match the values I'd been getting (on average) from my old bathroom scales (which broke last week). My new bathroom scales seem to produce much higher body fat readings (around 25%), which I don't think is accurate.
As long as I get back into 'diet mode' and slowly reduce my weight to my target, and keep doing weight training to preserve lean mass, I don't think I have to worry too much about trying to get accurate body fat readings along the way. Once I get closer to my target weight I'll get my second DEXA scan done, and that should provide a more accurate reading of what my body fat is. In any case my goal is to loose the 'spare tyre' of fat I still have around my waist, not to hit any particular body fat reading.
Subscribe to Enough Wealth. Copyright 2006-2020
Regardless of what the exact figures turn out to be, I know that my weight has slowly been increasing and I've been eating too much junk/snack food while stuck at home. I also have only been walking about 5,000 steps/day while at home (especially as its been raining quite a bit for the past week), compared to over 10,000 steps/day when commuting to work. Combined with not going to the gym (gyms are now officially closed by government edict) or to Kendo training (indoor sports are also banned), I'm eating a lot more calories and burning off a lot less. So the inevitable result of having a calorie surplus is to gain weight.
So I need to set myself a strict meal plan and schedule to avoid browsing or snacking during the day and after dinner, and I also need to do some more walking and do some more weight training at home using my barbell and dumbbells.
I did manage to find my old skinfold calipers yesterday, so took a set of skinfold readings and used an online calculator to calculate body fat using various equations. The calculated body fat results were:
Formula BF%
J-P 7 pt 15.98%
J-P 3 pt 13.71%
J-P 4 pt 15.10%
Parillo 15.86%
D/W 24.89%
Navy tape 25.33%
There is significant variation in the results, depending on which formula is used, but the values close to 17% match the values I'd been getting (on average) from my old bathroom scales (which broke last week). My new bathroom scales seem to produce much higher body fat readings (around 25%), which I don't think is accurate.
As long as I get back into 'diet mode' and slowly reduce my weight to my target, and keep doing weight training to preserve lean mass, I don't think I have to worry too much about trying to get accurate body fat readings along the way. Once I get closer to my target weight I'll get my second DEXA scan done, and that should provide a more accurate reading of what my body fat is. In any case my goal is to loose the 'spare tyre' of fat I still have around my waist, not to hit any particular body fat reading.
Subscribe to Enough Wealth. Copyright 2006-2020
Monday, 23 March 2020
Covid-19 actions all seem to be implemented a week too late
A week after I started working from home (indefinitely) and told DS2 to stay home from school (he had a bit of a 'sniffle' anyway, so I decided to keep him at home even though there's no known case of Covid-19 at his school) the NSW Premier has today announced that although the state's schools remain open (for the moment) children should stay at home 'if possible'. And the Australian Prime Minister announced that all 'non-essential' businesses should shut (their physical offices). And two weeks after I stopped going to the gym (at a time the 'experts' were saying it was still OK to go to the gym, as long as you wiped equipment down and washed hands afterwards) the PM has also shut-down all indoor sports activities and gyms (for six months!). So, many actions previously thought to bve 'too cautious' has morphed into mandatory precautions, but a week or two after it should they should have been implemented (to have a significant impact on 'the curve').
Aside from the trivial annoyance of having recently changed my gym membership from month-to-month to an annual paid-in-advance membership (oh well, my contribution to keeping businesses going I suppose), and the relatively small investment I still have in the stock markets (down another 8% on opening this morning, to an 8-year low), my biggest concern is that DW still had to go to work today (I'm expecting they'll decide to either ask employees to WFH (work from home) or take leave (annual, sick or unpaid) from tomorrow. It would have been better if DW could have avoided going to work and catching public transport for the past week, but hopefully the probability of exposure to Covid-19 is still quite low at the moment.
In the longer term the question will be whether or not DW and I keep our jobs - even large, healthy companies are likely to suffer extreme financial stress during 2020, and there will be a massive increase in unemployment during the course of 2020. If we're "lucky" we may receive a redundancy payment and be in a position to take an 'early retirement' if we need to. DS1 will be graduating at the end of this year and still seems to have an optimistic outlook regarding his chances of getting a well-paid IT job -- personally I won't be surprised if he ends up living at home rent-free and doing a post-grad degree for a couple more years...
Subscribe to Enough Wealth. Copyright 2006-2020
Aside from the trivial annoyance of having recently changed my gym membership from month-to-month to an annual paid-in-advance membership (oh well, my contribution to keeping businesses going I suppose), and the relatively small investment I still have in the stock markets (down another 8% on opening this morning, to an 8-year low), my biggest concern is that DW still had to go to work today (I'm expecting they'll decide to either ask employees to WFH (work from home) or take leave (annual, sick or unpaid) from tomorrow. It would have been better if DW could have avoided going to work and catching public transport for the past week, but hopefully the probability of exposure to Covid-19 is still quite low at the moment.
In the longer term the question will be whether or not DW and I keep our jobs - even large, healthy companies are likely to suffer extreme financial stress during 2020, and there will be a massive increase in unemployment during the course of 2020. If we're "lucky" we may receive a redundancy payment and be in a position to take an 'early retirement' if we need to. DS1 will be graduating at the end of this year and still seems to have an optimistic outlook regarding his chances of getting a well-paid IT job -- personally I won't be surprised if he ends up living at home rent-free and doing a post-grad degree for a couple more years...
Subscribe to Enough Wealth. Copyright 2006-2020
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