Retirement Journey Update for Mar 2023
March was a roller-coaster month. When Silicon Valley Bank collapsed, it set off a chain of bank failures that resurrected the ghost of the 2008 GFC. Risk assets sold off while safe-haven assets surged. However, the fear soon subsided, and risk assets rebounded to end the month higher, while safe-haven assets retained most of their gains. Tech and growth stocks outperformed while financials lagged.
Below is the breakdown by assets and geographies of the multi-strategy model maintained with iFAST as of March month end.
Our sizable safe-haven exposures did well. Volatility trading finally underperformed after doing very well since the middle of last year. This is expected behavior. Overall, the portfolio is up 2.7% in March and 6.0% this year.
Let's see how our retirement heroes are faring at the end of March 2023.
John, 32 years old, looking to retire in 18 years
John invested USD 40K upfront at the beginning of November 2020. He then regularly contributed USD 500 every month subsequently. As of the end of March 2023, he has contributed USD 54K. 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. Fortunately, Paul has a higher income, so he contributes USD 4K every month to make up for the shorter runway. As of the end of March 2023, he has contributed USD 152K. 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 March 2023, he has already drawn a total of USD 290K but his portfolio is still worth about USD 782K.
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