Despite being a pretty terrible year, 2017 did have one bright spot: stock markets around the world rallied far more than anyone expected.
We, at mom and pop investments, definitely expected a highly volatile year with possibly negative returns. But the exact opposite happened: volatility was non-existent this year and every single month had overall positive returns. It was the kind of year where you can have your cake (or gingerbread house) and eat it too:
Devon definitely had a lot of cake to eat this year. His RESP portfolio returned nearly 15%, which was fairly good considering his portfolio is mix of global and Canadian stocks (and no Bitcoins). As in previous years, the Canadian portion of his portfolio was a laggard, but the global allocation more than picked up the slack:
Since we started managing his portfolio four years ago, his returns average about 9.5% annualized. Thus, we feel fairly positive about the asset mix we originally included in his portfolio and we were not planning to alter our original plan.
However, in August we decided to significantly change his asset allocation and entirely divest from any US holdings across all our portfolios. August was the month when actual Nazis marched with torches through a major US city. In response, the president called some of the Nazis “some very fine people.” The political environment in the US (currently a mixture of outright fascism and kleptocracy) makes it impossible to invest in that space in a sustainable, low-cost way (i.e. an ETF that excludes fascists).
Liquidating our US holdings left us with extra cash on hand, and so our desired mix of equity and fixed income investments is slightly unbalanced:
Thus, in 2018 we’re continuing to focus on replacing the previous US holdings with climate-focused investments and other types of socially responsible funds. The challenge we’re facing is that the type of impact investing we’d like to do within Devon’s RESP is hard to access in a low-cost, automated way and we’re looking at a number of proxies to approximate this type of investment.
But even if we don’t do it perfectly, removing fascism from our portfolios is a worthy goal in itself. This is the year we’re aiming to #resist with our portfolio.