Monthly Report (December, 2020)

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December (2020), last month of the last Quarter of the 2020

 

Dear Copier and Followers,

the challenging trading year of 2020 has finally ended.

We completed the last quarter of the year with a gain of 10,6%.

The summary of the quarterly report is:

- 1st Quarter  - 48.4% a big loss due to the Covid and Oil historical collapse.

- 2nd Quarter  21% of profit

- 3rd Quarter  3.9% of Profit

- 4th Quarter 7,8% of Profit
 
Total result for the year about 30% of loss.
 
 

What went wrong during the first Quarter?

In one word my inexperience with the limitations that eToro requests a Popupar Investor to respect.
 
I have never experience a situation where a very fast and big collapse in so many assets from Oil and Stocks to Bonds and even Gold happened at the same.
 
I considered the huge spike a great shopping opportunity, and that was a correct call but it only increased further our portfolio Risk Factor.
 
The unusually high volatility produced a spike in our Portfolio Risk Factor that shoot above the maximum allowed by eToro and my account was temporarily frozen.
 
In order to return below the Risk Factor maximum I was forced to close a lot of trades in stocks and gold miners and keep an elevated amount of free cash until the market stabilized.
That dramatically reduced our possibility to quickly recover our losses.
 

How did we react and proceed?

We restarted our typical strategy but operating very carefully with elevated amounts of cash and TLT.
We gained a reasonable 35,5% of profit from April until the end of the year.
I think this trend will continue into 2021.

What's the strategy moving forward?

I think we found a good balance for the next year.
 
We will invest in assets which I believe have more upside from here: banks, Gold miners and Teck stocks (which we will increase after a reasonable pool back).
 
In order to avoid the problem we experienced with the "March Market Collapse" and avoid that our Risk Factor shoots above 6 we will keep an unusually high % of the portfolio in TLT which represents one of my favorite protection for the portfolio.

When a big correction comes, we will take the chance to increase heavily our stocks investment and we will begin to wind down our excess TLT protection levels.

I think that 2021 will be a good year with an interesting balance between the negatives and positives.
On the positives we can view the optimism produced by the fiscal stimulus offered by the governments and accomodative monetary policies from central banks around the globe that will continue well behind 2021 in support of the stock market and probably also of Gold and BTC.
 
On the other side, the huge economic damages and unemployment spike that this pandemic has produced that won't be easily to repaired in a short time, I am afraid.
 

I thank my Copiers and Followers for the confidence and I wish you a great time moving forward.

Daniele

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The graphs and prices shown in this analysis were taken using as a source www.etoro.com, the platform I am using for my trading as DanieleTrader.
Whoever is interested to follow my trading activity there is welcome to subscribe to the platform using the following link and follow me or Copy-Trade my activity:

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Disclaimer

The content published in this blog represents my personal view.
It is intended for information and educational purposes only and should not be considered investment advice or an investment recommendation.
The reader is solely responsible for his/her investment choices

 



  

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