Here are the results of the typical portfolio of the Institut des Libertés as of 1/1/2020.
All calculations were made with dividends and interest reinvested.
Two comments are in order
- Since January 1, 1920, the IDL portfolio has placed twelve points on the Paris Stock Exchange index, which is considerable.
- The falls in our portfolio were contained, but not the CAC 40
How do we get to these results?
Let’s go back to the end of 2019.
The least that can be said is that the author of these lines was not delirious with optimism.
and so my first The recommendation was to put fifty percent of the capital in “antifragile” stocks that would rise if the markets fell.
The two recommended stocks at the time were 10-year Chinese government bonds and gold.
Let’s see its performance during the period.
Gold, Chinese Bonds and the Defensive Portfolio (2/3 Chinese Bonds, 1/3 Gold) had similar returns, although the IDL Defensive Portfolio had lower volatility than its two components.
Two observations need to be made:
- If the defensive end is up more than a quarter in less than three years, you’ve done your job well.
- When the markets really took a hit in the first quarters of 2020 and 2022, my defensive stocks areThey have risen, and therefore cushioned the decline in equities, which makes up the other half of the portfolio and which I have to talk about now.
Let’s move on to the “aggressive” part of the portfolio, made up of stocks.
My mandate was to invest only in shares listed in Paris.
The reader will perhaps remember, with regard to the French actions, that I had made an essential distinction between, on the one hand, actions that had nothing to do with the State, which I called capitalist actions, and, on the other hand, actions that they represented French crony capitalism. , which had to be avoided at all costs and which I called communist actions.
And he had published a list of 10 “capitalist” companies whose shares could be acquired, in my opinion, but I am far from an expert.
Here it is again: Air Liquide, Schneider, LVMG, L’Oreal, Pernod Ricard, BSN, Cap Gemini, Total, Accor, Sodexo.
The recommendation was to put 10 percent in each of the companies and “rebalance” each month so that each of the companies was at the beginning of each month again in the top ten percent of the portfolio.
Here is the result of the “IDL 10” against the CAC 40 since 1/1/2000.
By removing companies that the state can put pressure on, which is a fairly simple principle to implement, I put twelve points on the CAC 40 over three years, which is good, and certainly better than the smaller equity funds. managed by the big banks on the Paris Stock Exchange.
At this point, therefore, I built both my defensive and offensive portfolios, each representing fifty percent of my assets.
Now I need to get to my final portfolio, here it is again.
The technique is always the same for each part of the portfolio.
At the end of each month, each investment is systematically reduced to its initial value as a percentage of the total portfolio.
This portfolio significantly “outperformed” the Paris Stock Exchange index, which was the desired target.
But if you study the charts a bit, you’ll see that most of this outperformance occurs in big drops.
Which brings me to two comments.
- Basically, the defensive part of my portfolio serves as a parachute for my investments when the offensive part loses value massively. But how long-term stocks always do better than gold or Chinese bonds, it is quite obvious that one of these days I will have to sell the defensive part and reinvest the product of these sales in the offensive part and therefore be left without protection…
- But the reader remains calm, that day has not come, quite the opposite. As I explained last week, the future holds difficult days and keeping a parachute to jump before the plane crashes seems very wise to me. The only thing I could do is trade 1/3 gold, 2/3 Chinese bonds, half gold and ½ Chinese bonds, as the prospects for gold look very encouraging to me.
I present these results first for readers who want to manage their savings but also for those who are not interested in financial markets on the pretext that it would be too complicated for them to make them understand that they are wrong.
Managing your savings in the world we are about to enter is going to be critical. And it’s not complicated, it’s just a bit tedious and you have to be extremely disciplined.
But in my opinion, if you want to be free someday, it is a task within their reach and anyway, they can start with a small part of their savings to grow stronger over time.
To work !
#results #IDL #wallet #Institute #Liberties