Argo Investments Again

  

Back in 2012 I invested in Argo Investments for a while. I don't know why I sold it. There were no new investments that month and I didn't comment on it on this blog. Maybe I put the money towards our house buying fund.

Anyway, I just reinvested in the fund in a regular brokerage account. After selling some things which we were buying in the SMSF we now need to reinvest in those accounts. The target allocation says that we are underweight large cap Australian stocks and so that is what I bought. This is a managed fund with a tilt towards value and a very low expense ratio of 0.15%. It has performed pretty well I think. 

By the way, I recently tweaked the target portfolio slightly to give the US and rest of the world equities equal weights instead of a slightly smaller weight for the US. Each is now allocated 6% of assets. This doesn't include hedge funds and private equity, just long-only investments. Australian large cap is supposed to be 9% of the total.

Bond Investments and Overall SMSF Allocation

I made three bond investments and have completed the initial investments for the SMSF. I bought two US baby bonds - Scorpio Tankers (SBBA) and Star Bulk Carriers (SBLKZ). These are both companies that make money, pay dividends and whose stock has good analyst opinions. They also mature soon or are subject to potential call, which means their price doesn't deviate too far from the redemption price usually. I also invested in the MCP Income Opportunities Trust (MOT.AX). This is a listed private credit fund, which has a high yield and performed better than other listed credit funds in Australia through 2020's market crash.

Here is the overall allocation of investments in the SMSF at this point:

The cash and bonds are to take advantage of shorter and longer term future opportunities.

I plan to benchmark the SMSF against Unisuper and PSS(AP) in future performance reports. After all, if it doesn't perform better than our employer superannuation funds, there isn't much point in doing this. As these are both strong performers, it will be a tough hurdle to beat.

Second New Property Investment: Domacom

I made a second property investment application today. This one is to Domacom which is a fractional property investment or crowdfunding platform. I have been an investor in the company itself for a while.  It is now looking quite a bit more stable than it did when I wrote about it before. It's still one of my most speculative investments. The way it works is that you put cash into an interest paying account and then bid on various crowd-funded projects. You can also get a syndicate together to invest in a property using their platform. They have a variety of other products like housing equity release for seniors – selling part of your house, rather than doing a reverse mortgage – Islamic financing for buying houses etc. Their model is supposed to allow SMSFs to invest with leverage because you buy units in a fund rather than buying a property directly. 

The focus is on residential property, but there are also more unusual opportunities like solar power and rural farmland.

New Investment: Australian Unity Diversified Property Fund

This is the first new investment in our SMSF. Real estate is the area where we are most underinvested relative to our target allocation. The SMSF already has an investment in US residential real estate via URF.AX. I sold our existing investment for a capital loss and bought a larger holding in the SMSF. So, this investment covers Australian commercial property. This fund has a very good track record (better than Charter Hall in my opinion) and is diversified across industrial, retail, and office properties. Coles and Woolworths are the biggest tenants. We are investing AUD 50k in this fund.

I have a definite preference for direct investments in property rather than listed investments. REITS tend to move up and down with the stock-market and so don't provide as much diversification as direct investments. On the other hand, actually buying property myself is not something I want to do as the required size of investment is too large. Well, we could easily buy an apartment to rent but we couldn't access commercial property easily. So pooling investments with others makes sense. 

If a REIT is trading a lot below NAV, like URF is, then I am interested in buying. URF is a pretty risky investment, though US residential property seems to have turned the corner. Financial Samurai even said he wanted to buy Manhattan Real Estate.

We already have exposures to US and Australian commercial real estate through our employer superannuation funds, the Wilson Alternative Assets Fund (WMA.AX) and the TIAA Real Estate Fund.

Stopping Systematic Trading Again...

Of course, bitcoin went straight down after I got in and I have now closed that trade. There was no real basis to that trade. I just went in because Oscar Carboni was getting bullish on bitcoin again. But I have also decided to stop my attempts at systematic trading. I thought I could come up with something which my personality could handle. But it's not the case. I just can't get detached when there is an order out there that may or may not trigger, needs attention to close etc. My anxiety and lack of sleep has been getting worse again this week, despite not actually trading and last night I decided to pull the plug. I still have a soybean calendar spread trade open, which maybe I was most anxious about. But it is actually making money now. I had increased the size of the trade. That was a bad idea. I have now gone back down to two contracts instead of three. These moves should reduce the overall cognitive load. If this still doesn't work, I'll have to close that trade too.

This seems to have happened every time I really get into trading, but each time I think it will be different. Moominmama was concerned when I said I was trading again, saying that I always end up stressed as a result. She was right.

P.S. 9 April

I still had difficulty sleeping, so I closed the soybean calendar spread too. At least that one made some money.

Bitcoin

 I'm finally back into Bitcoin. The position I could get was tiny. Margin requirements are crazy. On IB they are something like twice the actual BTC position. I took a small position on Plus500.