October marked a relief from the carnage in September although it was more for risky assets. Long-term treasuries continued to drop off the back of higher yields even as markets are looking forward to a slowdown in hikes as the economy cools. Volatility collapsed as the VIX dropped below the 30 handles.
Below is the breakdown by assets and geographies of the multi-strategy model maintained with iFAST as of October month end.
Volatility trading held up the portfolio which continued to suffer from the bond rout. Gold is also unable to overcome the strong USD headwind. Overall, the portfolio is up 1.4% in October, bringing the year-to-date loss to 19%.
Let's see how our retirement heroes are faring at the end of October 2022.
John, 31 years old, looking to retire in 19 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 October 2022, he has contributed USD 51.5K. If he sticks to his plan, he can expect to withdraw USD 7.5K every month when he retires in 19 years without ever depleting his retirement nest egg.
Paul, 51 years old, looking to retire in 9 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 October 2022, he has contributed USD 132K. If he sticks to his plan, he can expect to withdraw USD 9.5K every month when he retires in 9 years without ever depleting his retirement nest egg.
Sam, 66 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 and started to draw out USD 10K every month from this portfolio. As of the end of October 2022, he has already drawn a total of USD 240K but his portfolio is still worth about USD 753K.
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