Inflation worries came back to haunt markets in February, hitting all asset classes. However, speculative stocks are still partying hard beneath the surface of the equity market. The blue-chip Dow Jones Industrial Average underperformed the tech-heavy Nasdaq.
Below is the breakdown by assets and geographies of the multi-strategy model maintained with iFAST as of February month end.
Our country selection was good since UK and Mexico were resilient in February. Our short volatility position did not lose much despite VIX increasing in February. This is thanks to the positive roll yield from the deep contango in the VIX term structure. Overall, the portfolio is down 3.1% in February but still up 3.2% year to date.
Let's see how our retirement heroes are faring at the end of February 2023.
John, 32 years old, looking to retire in 18 years
John invested USD 40K upfront at the beginning of November 2020 and he regularly contributed USD 500 every month subsequently. As of the end of February 2023, he has contributed USD 53.5K. If he sticks to his plan, he can expect to withdraw USD 7.5K every month when he retires in 18 years without ever depleting his retirement nest egg.
Paul, 52 years old, looking to retire in 8 years
Like John, Paul invested USD 40K upfront at the beginning of November 2020. However, he knows he has a shorter runway than John to compound his portfolio. The good thing is that he has a higher income than John so he contributes USD 4K every month subsequently. As of the end of February 2023, he has contributed USD 148K. If he sticks to his plan, he can expect to withdraw USD 9.5K every month when he retires in 8 years without ever depleting his retirement nest egg.
Sam, 67 years old, already retired
Sam doesn’t have any runway to compound his wealth as he is already retired. Fortunately for him, he had accumulated USD 1M of savings which he invested upfront at the beginning of November 2020. He started to draw out USD 10K every month from this portfolio. As of the end of February 2023, he has already drawn a total of USD 280K but his portfolio is still worth about USD 772K.
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