The Money Machine April 2018

April is over, I was going to update you on the evolution of the money machine and the month’s stock buy.

The Money Machine April 2018

money

April has been a real rocket month for the Swedish stock exchange. Our portfolios went up 6.34% and index 5.91%. I had to look through my older monthly reports and was pleased to note that we have been indexing every month since September last year.

Don’t know if it’s just luck or if the holdings in our portfolios are simply cruel ?! It remains to be seen, in the short term it is quite easy to beat the index with a little luck. It is only in the longer term that you can see if it is really you who is good at choosing the right shares.

I don’t think I’ve shown our portfolio development in the slightly longer term before so I thought it might be fun to see. The portfolio composition and account structure that we have now we have had since November 2014. Therefore, I have “only” statistics from that date. But as you can see below, we are just over 10% units better than index.

The index I usually compare to, SIXPRI (all of the stock exchange’s companies including dividends), is a relatively difficult comparison index. Our portfolio is relatively stable and contains most large companies, so another comparison would be to compare with the SIX30 return index (the stock exchange’s 30 most traded companies including dividends).

There we have almost double the return in just under four years according to the graph below. Honestly, I don’t really know which index is most fair to compare with for us, but somewhere in between wouldn’t be unreasonable. In summary, we can say that things have been quite good for us over the last 4 years.

Activity of the month

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You who follow the blog know that we are currently saving our monthly savings for leave during 2019 and we have not bought any shares this month either. However, a lot of dividends have been raised. We could use this money to buy more shares. We have not done that, but we have taken the money from the stock portfolios.

Our theme for 2018 is to find alternative investments outside the stock exchange. Much because we want to diversify and have a little more “airbag” in the event of a major downturn on the stock exchange. In addition, we are also looking for investments with better cash flow compared to equities.

We wanted to live up to our capital in the future

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Shares provide between 3-4% direct return, which is good, but if we wanted to live up to our capital in the future, we would have liked to see that we could be up to 6%. If we could go from 4% to 6%, it also means that we need 33% lower total capital before we can call ourselves “financially independent” and quit working. Think of the 4% rule fixed with 6% instead.