quarterly portfolio overview

My portfolio year to date performance

ishares Dow Jones US Oil Equipment +3,07%
DB X-trackers Brazil(ETF) -2,0%
DB X-trackers Emerging markets (ETF) -6.0%
Lyxor New Energy(ETF) -1,5%
Nordex(stock) -4.0%
Powershares Cleantech(ETF) +6.3%
Powershares Global clean energy(ETF) +9,6%
Market Vectors-Nuclear Energy(ETF) -3,8%
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+0,5%
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Fixed income +2,7%
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Total +1,3%

It is not great but not bad either if you think how most markets are going

Reasons for oil not to go low

There are many reasons why oli is so high currently but the main reason is that demand for oil is high. I also believe that high demand in asia will keep prices up in the future. But there is also an other reason for high oil price in the future. oil is now high and therefore many oil companies have been drilling in areas that have been previously unprofitable. So basically this new oil is more expensive to drill and that means companies have to sell it also for high price.

I still think many oil services companies are undervalued comapared to expented earnings growth for next 12 months.

Oil services and equipment picking some steam

Today was a sad day on most markets, but my portfolio rose 0.3% thanks to IEZ oil services ETF which rose 3,6%. I thought about moving my emerging markets ETF money to IEZ. But because i want reduce my trading, i wont sell and just take a bit longer sight on emerging makrkets. IEZ looks tempting but i will wait for my nex timed purchase in september and think if that still seems to be the right move(i must stick to my plan)

Emerging markets and brazil are the only ones loosing value but my other investments are holding well or gaining a bit value.

This might be good opportunitu to also buy some ETFs with inverse makert return but i have chosen not to use them in my strategy and rather time my purchases better.

Tomorrow i will move most of my fixed income savings to seligson AAA money market fund.

using itunes and some market analysis

Itunes is a music player that uses apple store fo buying songs. Itunes also feaure nice archive of free podcasts(including investing). So now that my podcast player is not working i recommend to use itunes like i do for listening those podcasts.

First you have to download itunes from here Then jus click store and browse to podcasts -> business or use search on left after accessing the store. Alternatively you can wind the web adress(URL) of the podcast and click advanced -> subscribe to podcast.

Markets are still going down but my powershares green ETFs are holding well against the main current. Now it seams i will wait couple of months before buying anything. So i am looking good buying possibilities and maybe exposure to russian and east european markets. My current forecast is that developed markets will go down slowly for the rest of the year. So i wont be investing in any major indices following ETFs.

Calculating fixed income percentage

So today i continue my theme of fixed income and tell you my way of finding out percentage of fixed income to portfolio. Following calculations only give you an average so you still want to have more in fixed income in uncertain timesa and less when we are in bull market(markets going up for long term).

First you should plan how much on average you want to save from your sallary. I would safe at least 10% but that is for you to decide. Helping you to figure required numbers , there are investing calculators like this. So basically you just put the years when you want to have certain amount of money and monthl, amount of monthly investments, desired yearly return rate and you then get future amount of your investments. So play with those numbers until you get what you want. Average yerly return is somewhere between index returns of stockmarket and banks interest rates. I got 14% as my average yearly return which is high but i like a challenge :)

In following picture i will show you how to find out fixed income percentage using that number that you got from the calculator. You also want to have rough estimates of how much is yearly return rate of stocks and funds and fixed income.
And following calculations give you on an average so you still want to put more money to fixed income if economy is uncertain.

Fixed income and it's part imy investing strategy

I have not talked much about fixed income part of my portfolio but no plan to fix that. The reason why everyone should have fixed income, is to buffer the losses of stock market in uncertain economic times. Fixed income includes bonds, bank interes rates and other types of investment that you know you get fairly constant rate of return.
Because of young my age i will only have 50% or less of my portfolio in fixed income but when retirement comes more relevant, i will switch most of my money on fixed income.

Currenty i have only one asset in fixed income, a banck interrest rate linked to EURIBOR 12 month(365) currently yielding about 4.7% before tax. But after tax that only does about 3.4%. And that is the reason i will switch most of cash reserve to Seligson AAA money market fund which invest money to short(3 month) bank interest rates. So basically i just have to pay tax when i sell this fund and management costs are 0.18%/a. That fund also does not have surrender charge or buy-in-fee. Other benefit is the diversification to different highest rated finnish banks.
link to seligson

still value in markets and investing podcast player is dead

I noticed Doug fabian wealt strategies is not using feed that properly works with yahoo pipes and my player. That said i will remove my investing podcast player at least for now and only give links list to my favourite investing podcasts.

There is a reasonable amount of fear in markets now and Finnish HEX hit new lowest point for over a year. Now that some say markets are going lower because of "new oli crisis" i see no sense in enviromental ETFs losing value. So there is still value in markets , you just have digg more deep to find it. And i still think oil and gas service sector is good bet when everybody rushing to find oil and gas on new places durring these times of high prices.

Markets going down

It is now quite clear markets will go lower and shorts seem to be only etfs working. I am not worred if my portfolio goes down even 15% and i will continue my plan to be increasing my portfolio this year. I think green ETF sector has alredy shown good profits from companies and i tihnk i should me quite safe with those. If green ETFs go lower, i will increase their portion if good opportunities emerge.

This down stream of global markets will go aat least to 1st quarter next year if noting special happens.(if we think USA economy is the main reason)

Easy ETF analyses by Gary

The ETF expert podcast is one of my favourite investing podcasts. It focuses on one thing only, ETFs and there is no useless chitchat. ETF Expert podcast is produced by Gary Gordon,The President of Pacific Park Financial. His podcast is also found in my podcast player.

Gary also has a great blog titled ETF Expert which follows topics of his podcast. Nearly every statement of the blog comes with some facts or charts to compare different information. Gary manages money for his living but there is no self advertising hidden in the blog topics. So basically i engourage every one interest in ETFs to pay a visit to ETF Expert blog
But in some case you end up talking to Gary, please let him know where did you learn about his blog and podcast.

Nuclear energy ETF bought

So i bought Market Vectors-Nuclear Energy ETF (NLR) to my portfolio. I believe nuclear energy is the way how BRIC countries will try reduce their CO2 emissions and i think i should also have some nuclear energy on my portfolio.Because purchase of NLR, portfolio average gain percentage went from 9,4% to 7,3%

Dividends revinvesting ETFs

Total return net ETFs mean they reinvest dividends to ETF. In other words it might say "Use of profits: Capitalizing" or something similar. The main advantage is with taxation compared to if dividends are distributed normally. In Finland capital gains tax rate is 28% and of course if you hold ETF with reinvesting policy, you save a lot of money with this tax benefit.

My brazil and emerging markets ETFs from DB x-trackers are these type of TRN ETFs and will favor them in the future too.

So far it looks like rebalancing is not needed for my portlofio and will buy something new in this month if nothing special happens. Most likely if will think of buying MSCI EM EMEA TRN INDEX ETF by DB X-trackers.


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