The portfolio is up 11.99% year to date.

Reading my media news feed feels a bit like living in a small American town just before the phone lines are cut and the psychopaths run amok. As if in the opening scenes of a B-movie horror flick, everyday life seems wholesome, and all is normal on the surface…

…but my, those shadows look menacing. And is just it me, or are they closing in?

There’s a dystopian dimension seeping out of my smartphone where:

  • Strongmen are unraveling democracy
  • Surveillance capitalists are manipulating our minds
  • Truth is imperiled by alternative facts
  • Technology is rendering us obsolete
  • Prosperity’s dream is fading
  • We’re sleepwalking into a climate catastrophe and social collapse
  • We’re too divided to talk to each other, never mind escape this mess

Not-so-scary movie

Happily there’s another movie playing – global prosperity is still advancing in the theatre of our portfolios.

This picture is not so compelling because it’s plotted in numbers, it’s agonisingly slow, the pacing is awful, and frankly, it’s not very believable, fashionable, or exciting.

But in the eight years we’ve been watching the world through our Slow & Steady passive portfolio, a more hopeful storyline has unfolded:

  • The astonishingly innovative US continues to kick-ass and you should never bet against it solving its problems while creating a slew of new ones.
  • Europe has held together and stubbornly refuses to crack, despite the dire predictions of all those who think compromise is a synonym for weakness.
  • The UK is doing okay, though it’s lagged the rest of Europe throughout the last decade.
  • Japan is fine, too, regardless of its supposed stagnation and all the decades lost down the back of the sofa.
  • Advances in many emerging markets show prosperity is still spreading around the globe, though progress is uneven.

Every corner of the world has repaid our investing faith, regardless of our ambient level of anxiety. The doomster asset classes – government bonds, gold, and cash – haven’t been needed… yet.

Perhaps the horror is real? Perhaps the phone lines are about to go dead?

Perhaps, but I only have a few lenses through which to view the world: my personal experience, my media experience, and my market experience. And two out of three of them aren’t playing a scary movie.

Here’s the latest portfolio numbers in See-No-Evil-o-Vision:

The annualised return of the portfolio is 9.54%.

Last quarter’s recovery has continued, and we’re now up 12% in the first half of 2019.

The overall annualised return of 9.54% is very healthy. Call it 6.5% real return after inflation – that’s way ahead of the expected return I would have hoped for back in 2011. It’s also way ahead of my bank account and my salary negotiation skills.

The Slow and Steady portfolio is Monevator’s model passive investing portfolio. It was set up at the start of 2011 with £3,000. An extra £955 is invested every quarter into a diversified set of index funds, tilted towards equities. You can read the origin story and catch up on all the previous passive portfolio posts.

New transactions

Every quarter we lock £955 into the wicker man of global capitalism and pray for a successful harvest. The virginal cash sacrifice is split between our seven funds according to our predetermined asset allocation.

We rebalance using Larry Swedroe’s 5/25 rule but that hasn’t been activated this quarter. Therefore our trades play out like this:

UK equity

Vanguard FTSE UK All-Share Index Trust – OCF 0.08%

Fund identifier: GB00B3X7QG63

New purchase: £47.75

Buy 0.229 units @ £208.97

Target allocation: 5%

Developed world ex-UK equities

Vanguard FTSE Developed World ex-UK Equity Index Fund – OCF 0.15%

Fund identifier: GB00B59G4Q73

New purchase: £353.35

Buy 0.945 units @ £373.95

Target allocation: 37%

Global small cap equities

Vanguard Global Small-Cap Index Fund – OCF 0.38%

Fund identifier: IE00B3X1NT05

New purchase: £57.30

Buy 0.192 units @ £298.28

Target allocation: 6%

Emerging market equities

iShares Emerging Markets Equity Index Fund D – OCF 0.24%

Fund identifier: GB00B84DY642

New purchase: £95.50

Buy 57.12 units @ £1.67

Target allocation: 10%

Global property

iShares Global Property Securities Equity Index Fund D – OCF 0.22%

Fund identifier: GB00B5BFJG71

New purchase: £57.30

Buy 25.298 units @ £2.27

Target allocation: 6%

UK gilts

Vanguard UK Government Bond Index – OCF 0.15%

Fund identifier: IE00B1S75374

New purchase: £296.05

Buy 1.721 units @ £172.01

Target allocation: 31%

Global index-linked bonds

Royal London Short Duration Global Index-Linked Fund – OCF 0.26%

Fund identifier: GB00BD050F05

New purchase: £47.75

Buy 45.261 units @ £1.06

Target allocation: 5%

New investment = £955

Trading cost = £0

Platform fee = 0.25% per annum.

This model portfolio is notionally held with Cavendish Online. Take a look at our online broker table for other good platform options. Look at flat fee brokers if your ISA portfolio is worth substantially more than £25,000. The Slow & Steady portfolio is now worth £45,000 but the fee saving isn’t quite juicy enough for us to push the button on the move yet.

Average portfolio OCF = 0.18%

If all this seems too much like hard work then you can buy a diversified portfolio using an all-in-one fund such as Vanguard’s LifeStrategy series.

Take it steady,

The Accumulator

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