The last quarter, my Amber In dex has been quite stable, very stable actually. Giving the bear market from February/March 2020 due to corona, this requires some insights.
First – what is my amber index?
With the Amber Index, I track my progress towards FI. So, the higher the better. In short, I compare my liquid assets (investment portfolio, not pension savings and my residence) to my expected yearly money needs. I aim for the 3,5 pct rule (yes, not 4pct)
Here are the results
Quite stable compared to the S&P 500
Thjis is great in a bear market. It s#cks in a bull market. So, yes, I have missed out the good months of 2019. And that is ok. I was restructuring my finances.
So, why is it so stable?
Just look at the asset allocation I have today…
62pct of my assets are in highly secure products: insurance contracts of the type Tak21. They offer a minimum return (my max is 1,1pct), a 100 pct capital guarantee and a potential return kicker. Want to know more or why: they make me sleep at night.
These producta are immune to the market, no ups and no downs. I have decided to convert them into more risky assets. The challenge is that they are taxed heavily when you close them before their 8years and 1 day birthday. So, right now, I can only convert again in 2022. Converting now would result in 30 pct tax to be paid on an assumed return of 4,75. That is too much for me.
The stock investments are mainly in gold, gold mines and at the time writing Shell. Long term ambition is to convert this into ETFs that track the global market
The cash is not sitting idle. It is working hard as collateral for option trades. A big mart tries its best to be converetd in to VTI and KO. Would spy drop even more, they will try to become that.
what does your asset allocation look like?