The financial market finishing strong in the final months of 2022 after a terrible 6 months. Financially, 2022 was not a great year with inflation raging around the world and crypto fraud companies finally got binned into a long crypto winter. It seems that recession is coming in the first half of 2023.
The portfolio did very well nonetheless. It was a flat year overall with close to 0% loss. However, the target allocation had changed quite a lot due to higher allocation in cash (interest rate bites) and bonds after a round of home loan refinancing.
I managed to increase the US equities thanks to recalculation of the US portion in the indexed funds, and buying some more indexed funds.
Crypto world is in a deep mess. They are currently in junk territory with a lot of fraudsters and tech bros running the largest exchanges. It might take a while and some additional regulations before the confidence returns. I only have Polkadot and Bitcoin in a cold wallet with a 80% paper loss vs purchase prize โ ugh. The current allocation is now the following:
| Percentage | Target | |
|---|---|---|
| Australia | 26.08% | 26.00% |
| Emerging | 7.25% | 8.00% |
| US | 25.74% | 28.00% |
| International (non-US) | 13.07% | 14.00% |
| REIT | 1.91% | 2.00% |
| Bonds | 5.88% | 9.00% |
| Gold | 6.63% | 6.50% |
| Cryptocurrencies | 0.25% | 0.50% |
| Cash | 13.44% | 6.00% |
Overall, the allocation is 70% equities and 30% fixed income + cash, or 83% equities and 17% fixed income if cash is excluded. Next year the goal is to add more to fixed income allocation while trying to keep cash holding to a minimum level. It’s not so easy with recession looming. See you in the new year!