June 2017 Update

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Grampa Time in California

California

Out for Supper with Chace and Braxton

Grampa watches the boys in California, while mom and dad take a well-earned vacation.

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June Results

June was a mixed month on the markets.  The Canadian market dropped by over 1% while the US markets gained by one half percent to over one and one half percent.  The Canadian market is now slightly negative for the year, while the US markets are up over 8% YTD.  The Canadian dollar gained considerable strength against the US dollar.

My Canadian portfolio beat the market with almost one half percent growth for a YTD gain of almost 3%, while my US stocks showed a small loss with also a nearly 3% gain YTD.  My overall portfolio, without consideration of the exchange rate showed a small gain, but once you factor in the exchange rate (a dramatic 4% shift), I showed more than a 1% loss for the month.  Without the large drop in the US dollar, I would be at a break even for the month.

June YTD
TSX -1.09% -0.69%
DJIA 1.62% 8.03%
S&P 0.48% 8.24%
BB CDN 0.41% 2.83%
BB US -0.38% 2.80%
BB Total (no FX) 0.17% 2.80%
BB Total (incl FX) -1.38% 1.87%

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Retirement Investing (my story)

It has now been exactly three years since I retired and gave up a regular income.  I  rely entirely on my investments for my livelihood.   Ideally I  live on my dividends and allow my capital to grow in line with the markets.  Below is are charts that compare my net worth to the TSX (Canadian stock market).  Net worth is the difference between your assets and your liabilities.  I have no liabilities, nor do I have any significant assets other than my financial assets, therefore my net worth is the same as my investments.  Net worth includes what you previously had, plus any new money, minus any spending.

My net worth is up just under 10% since retiring – and remember, I have to live off my investments, so my net worth is reduced by the amount of my spending over the three years, and I have spent a lot.  So my net worth is growing faster than the market.  Some of that is due to my US stocks which account for 1/3 of my portfolio.  However my Canadian portfolio has been outperforming the market as well.  This means I should be able continue to lead my current lifestyle without worrying about eroding my capital.  Experts recommend removing a maximum of 4% annually (adjusted for inflation) from your portfolio to allow you to not outlive your money.  In 2015 (my first full year of retirement) I removed about 3% for my living expenses;  in 2016 I took out just under 3.5%; and this year I may hit the 4% level.

During that same three-year period, the TSX has had a bit of a roller coaster ride, starting at about 15,100, then dropping to under 12,000 in early 2016 then recovering to a peak of just under 16,000 in February 2017.  The TSX is currently up less than 1%  since the day of my retirement but was down over 20% at one point.  Two major factors account for over one fifth of the Canadian economy – resources (oil, mining, etc – 12%) and real estate (8%).  Oil and other resource prices (eg potash) are at historic lows, while real estate prices in the big centres are at unaffordably high levels.  Both of these factors have had a negative impact on the Canadian market.

Net Worth (top line – blue) vs TSX (bottom line – gold)

TSX from June 2014 to June 2017

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Click for a PDF copy of my investing book.

Simple_and_SuccessfuCSP_Proof100415

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Happy Investing !!

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About borgford

Feel free to contact me with questions: brianborgford@hotmail.com
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