Quarterly return posts supplement my monthly Financial Dashboard, covering investments in detail and looking at my yearly targets. Here I track purchases and sales, document progress against my (in progress) investment strategy, and discuss re-balancing and changes over time.
It has taken me many weeks to properly unpack 2021. A year in which a lot happened, and also a lot of nothing. I remain in the same job, earning slightly more as I increase in seniority, watching the NHS continue to fall to a death by a thousand cuts. We live in the same house, with only minor repainting and renovations undertaken this year. We had no proper holidays away, and made no major (four figure) purchases. We started 2021 with the roll-out of a vaccine for COVID and we end with the Omicron variant seemingly left to run it’s milder course through the population.
Our year was punctuated by the arrival of our baby. We have gone from a DINK household to a one income and kid (so an OIK?) household. We are a happy family, but by god nothing prepares you for it. I thought I was prepared – I’ve worked abysmal rotas in my time, I’m a friend to sleep deprivation, how hard can it be? Seven 13 hour night shifts in a row at 60% staffing… done it. Living a life reminiscent of the scenes from ‘This is Going to Hurt’. Compared to that?
It was a totally different beast. The snatched sleep, the emotionally draining, energy sapping, unrelating nature of it, the quiet resignation to endurance. Yet, somehow, the positives of a tiny, happy, giggling face outweighs it. Evolution’s a hell of a drug.
In my 2020 review I set some goals for 2021, alongside a prediction of whether I could achieve them. These were:
- Finalise emergency fund structure and pay off credit card – 80% – Success
- Save 35% of my income – 40% – Failure
- Make goalless time every month for hobbies – 60% – Success
I made the final payment to my credit card on the 23rd of December, meaning over the course of the year I cleared a balance of £3,680. I also sorted out my emergency fund and the cascading system I use for immediate/<24 hours/ 24-72 hour financial requirements. I’ve a couple of legacy accounts yet to close, but we’re otherwise now at fighting weight. I missed my 35% savings goal by 0.86%, managing to somehow save 34% of my salary over the year (that’s not including the credit card). This will roll over to next year. I did organise my time to be able to spend an afternoon a fortnight on my hobbies. Past tense here, as infants are sleep and time thieves, and some hobbies have had to be sacrificed.
In an effort to test my forecasting abilities, I also began running a new SSC/ Astral Codex Ten-esque prediction experiment with conviction, where incorrect predictions will be struck through:
UK vaccination will be completed before the July – 75%– A difficult one to assess, but based vaccination delivery rates for first jabs plateaued after July, and for second jabs after September. I did not account for vaccine hesitancy or government logistics nonsense. Stats taken from wiki (1). Greater than 200,000 UK COVID deaths – 30%– Happy to see that the cumulative death figure at the end of December was 148,624. Still staggering. UK has worst death rate as percentage of the population in the world – 60%– This was very flippant and pessimistic, as various countries in Eastern Europe and South America have been absolutely battered.
- Under-reporting in developing nations hides significant pandemic effects – 90% – I’m going to call this as correct, because from what I’ve read and heard it is, but the actual chances of proving it are very slim. An error of prediction writing.
The UK tier system is still in use in December 2021 – 60%– I underestimated just how driven by political and economic pressure BoJo would be (2). I also assumed that he was aiming for clear messaging. I was wrong. The UK experiences another ‘lockdown’ in winter 2021/2 – 75%– This was mostly wrong. England’s Plan B rules were definitely not a lockdown, and while Wales’ and Scotland’s rules were stricter, I don’t think they can be called a lockdown.
- COVID-19 mutates into a form immune to the current vaccine – 40% – My estimate was <50%, therefore I thought this unlikely. It hasn’t and I hope it doesn’t.
- I am personally working in office >80% of the time again at some point in 2021 – 10% – Also never happened.
- Someone I am close to will die of COVID-19 – 25% – Didn’t happen, though that is dependent on the close clause.
- Endemic COVID-19 circulates in the population with lockdown easing and shops re-opening – 80% – I think this is pretty much where we’re at now. Government continues to publish figures, but we’re not far off back to ‘normal’, and I can see people using vaccine passports, testing and masks for years to come.
- … and self-isolation becomes normalised – 80% – Yes? Again error of writing predictions I think. I know the government has shortened the self-isolation rules, but I don’t know anyone not treating it as standard practice.
… and higher death rates tolerated among the over 50s with consistent effect on life expectancy by end 2021 – 75%– I think we’re heading this way, but too early to call. Certainly life expectancy in the UK is falling slightly (3), but I’ve not read anything suggesting or attributing this to COVID. It seems more linked to poverty. Boris resigns – 60%– Wishful thinking, he’s a stubborn old gibbon. Keir Starmer above BoJo in the opinion polls – 80%– As per Britain Elect’s weight average tracker, BoJo had a 32.9% voting choice compared to Starmer’s 32.1% on the 3rd of Jan 2022 (4). They actually crossed over at the end of Jan 2022, but that doesn’t count. Again evidence I am not in tune with Joe Public.
- Inflation above 2% – 75% – CPI at a stunning 5+% (5).
- … due to Brexit-resultant shipping and food cost rises – 60% – Eh, I’m going to call this correct. Food, fuel, household bills and tech have all pushed it up, but you look at the reported cost of living crisis and it seems that way.
- There are resultant food shortages – 10% – So there are and have been some food shortages, but not to the point of seriously empty shelves, so I think this is correct.
Homeless rate rises – 95%– Actually down 4% from 2020 (data for September to September) (6). Foodbank usage rises – 95%– Interestingly, though up from 2019, looking at the Trussell Trust figures for Apr-Sept it appears to be down from 2020 (7).
- House prices continue to increase – 75% – Yes (8).
- FTSE100 above 7,000 – 60% – Yes…
- FTSE100 remains above 6,500 – 80% – Yes…
- FTSE100 hits 7,500 – 20% – Yes… Closing at 7,358 on the 31st of December 2021. Ticked over to 7,500 the next day though. More positive than I expected.
- FTSE250 hits 22,000 – 60% – Yes, actually closing at 23,480 at the end of the year. Again more positive than I expected.
- S&P500 hits 4,000 – 75% – Yes, storming to 4,766.
- S&P500 hits 2,500 – 30% – Yes
£ hits $1.40 – 50%– Nope. $1.35. I think the US did better than I expected.
- We have £100k in equity – 95% – We do.
- We start to overpay our mortgage – 30% – We didn’t. Baby swallowed spare cash (not literally).
- I have £15k invested – 30% – I do not.
I am saving £1k/month – 30%– Quite unbelievably to me, my mean average monthly savings over the year were £1.3k.
- We have [redacted] – 90% – We did.
- MrsShrink [redacted] – 75% – She is.
We replace one of our cars – 50%– Went to look at a few. Still looking.
- The project car gets repainted – 25% – I did not get time.
- The project car gets sold – 10% – I wavered, and then put it on axle stands.
We have a holiday – 80%– I was pretty shocked when I sat down and worked out we hadn’t had a holiday away at all in 2021. Staycations yes, but nowhere actually away. A few coming in 2022.
- Outside of the UK – 20% – We didn’t.
- I learn another language – 30% – I didn’t.
- I continue to exercise at least three times/ week for the whole year – 75% – I did.
- I can do a pull-up again – 40% – I can’t.
- I can do a hand-stand press up again – 20% – I can’t.
- I return to [redacted] – 10% – I didn’t.
- I complete [redacted] – 25% – I didn’t.
- My ongoing work has not conformed to anticipated plans – 90% – It did not.
- I publish [redacted] – 90% – I did.
- I publish [redacted] – 25% – I did not, although it is under review.
- I publish on average four posts/ month – 40% – I did not.
- Most page views ever this year – 30% – My page views halved with my decreased posting frequency. I’m ok with that.
- This blog gets abandoned – 10% – Still here.
In my predictions 50% is equivalent to sitting on the fence. Greater than 50% is a positive prediction, less than 50% is a prediction of negative likelihood; i.e. I do (former) or don’t (latter) think the predicted thing will happen. The variance from 50% is then summed, with correct predictions positive, incorrect predictions negative, before dividing by the total to produce a mean. The result was +0.141, suggesting that within a range of -0.5 to +0.5, my predictions are slightly positively predictive. I have predictions for 2022 in a little black book, and I’ll post them here in the weeks to come.
In terms of goals for 2022:
- Save 35% of my income – 40% – Rolling over from 2021.
- Save £8k towards a new car – 40% – My current car is… fine… but it is increasingly decrepit, and we could do with something safer and more comfortable for long journeys as a family. Maybe this counts as lifestyle inflation. Car prices are absolutely nuts at the moment, as you may have heard, with things I was looking at in 2019 for £3k now more like £5k. What I’m after sits around the £7-9k mark, so I’m aiming to save across the year so that I don’t need credit to purchase. At the moment, on one salary and with nursery fees looming this seems impossible, but it’s about what I put away across regular cash savers and paying off credit cards last year, so we will see.
- Finish the house renovations – 75% – We have put a lot of time and effort into making our current house the way we want it. We have one room left to redo, plus some external maintenance and beautifying. Once this is done we can sit back a little, relax, and then inevitably sell and move as itchy feet and my Rightmove habit kick in.
- Cash Accounts £15,750 (+£2,230)
- Investments £13,280 11,920 (+£1,360)
- Property £58,960 52,900 (+£6,060)
- Cars £2000 (no changes)
Bit of a bumper quarter. I was paid a fairly decent lump for some locum work, most of which went into cash savings accounts to prepare for potential future tax bills – hence the big bump there. Continued to add a bit to my regular savings account as well. On the investment front the growth this quarter came from the markets. As our household income has fallen my salary has been paying more of the bills, and I prioritised reducing debt over further ISA investments. The property jump comes from principal repayment (smaller proportion) and a revaluation of our property worth. A house on our street sold off the market at £290k in the summer, and another of a similar finish to ours recently sold (in less than a week) for £300k, so we have estimated that as it’s worth.
Core/ Satellite Passive/ Active Split
My 2021 ISA is in Vanguard, however I didn’t pay in anything this quarter. All activity in my Freetrade has been active attempts at stock picking by selling holdings to buy new (fancy a free share? Sign up to Freetrade using this link, and we both get one). So what did I actually do?
In mid-October, while still trying to decide what to do proper, I bought Lucid (NASDAQ:LCID) as a conviction play after seeing a series of excellent reviews of their upcoming car. I bought at ~$25/share, and held as it jumped over the following weeks. After it crossed the $35/share mark I sold out, only to then watch it hit $55/share over the following month. I’m happy I took my gains, as it’s now back down to the $22 mark. Then when GME hit about what I paid for it, I sold out of that too.
I used that released cash to purchase Cornish Metals at 14p/share. Cornish Metals holds the mining rights to South Crofty, a very old, very big, tin, zinc, tungsten and copper mine that closed up in 1998 following the collapse of the global tin price (9). Since it started up in the 16th century it has absorbed a vast number of surrounding mines, to extend 2 and a half miles and 900m down. After closure the site was considered for redevelopment (as the surface mine workings sit in the middle of the town of Pool, between Camborne and Redruth), before going through a series of owners. I started following it in 2011 when Celeste Copper Corp assessed there to be £1.5 billion of tin left in the ground, before UNESCO got involved and it went into administration in 2013. Strongbow Exploration bought it out of administration, and since then have gradually been working through permits to restart the mine, along with changing their name to Cornish Metals (10). They’ve done further exploration which has extended the mineral resource estimate at South Crofty. The South Crofty rights also came bundled with a load of other mineral rights across Cornwall, including United Downs, last mined by Rio Tinto Zinc in 1991 (11). This whole area has been historically mined, and Cornish Metals went looking between some of the old mines. In 2020 they found virgin high-grade copper-tin, which they’re now applying for further permits to assess. As a final kicker, Cornish Metals have a tie-in with Cornish Lithium, who I have some shares in through crowdfunding. The share price of Cornish Metals rose in Nov/Dec, and has been bouncing in a range between 20p and 28p/share since. I’m planning to hold them long, as I think they have the potential for decent profitability based on future tin price estimates. To be nice and boring I then balanced my active purchase with some more Vanguard FTSE All World, just in time for the 2022 correction.
Happy winter everyone,