I am thankful to be ending this year in green.
The volatility of my investments has seen my portfolio fluctuate between -15% due to rising treasury yields in the first half of 2024, to +25% in the 2nd half fuelled by China's surge, ending the year marginally up 3%. The risk score has increased from 4 to 5.
Although I expected treasury yields to decline in line with Fed's rate cuts, this did not materialise as yields increased on Trump's victory and anticipation that future tariffs may boost inflation.
As the end of the year approached, investors looked to how bonds will trade in 2025 with a new Republican government and an expected increase in the fiscal deficit, which would entail more Treasury debt issuance.
I expect this trade to remain volatile, however more confidence and clear steer from Trump's administration should bring calm and perhaps a technical reversal. I will be gradually trimming my TMF position in 2025 as it begins to approach the break even point.
China has proven resilient despite ongoing challenges domestically (real estate crisis) and externally (Trump's tariffs). Nonetheless, any positive news was more than welcomed by the market. As more clarity comes from the Party in Q1-Q2 2025 on its monetary policy, I expect China to recover. Markets are forward pricing, and I would argue that Trump's tariffs are largely already priced in, and the downside from the current levels remains limited.
UBS in its 2025 investment outlook announced that now is the time for real estate. UBS sees the outlook for residential and commercial real estate investments as bright. With constrained supply and rising demand, there are opportunities in sectors including logistics, data centers, and multifamily housing. I concur with that; the real estate sector has been hit hard by elevated interest rates. However, markets move in cycles, and now may be the prime time to catch a bargain. I added a number of REITs in my portfolio:
- PHP: healthcare properties in UK
- LAND: office and entertainment spaces in London and wider UK
- CCI: 5G network infrastructure in the US
I am going to stay the course and stick to my strategy in 2025, which can be summarised as declining Treasury yields, recovering China and recovering real estate.
Happy new year everyone!... Show More
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Sat Apr 18 2026 19:43:58 GMT+0000 (Coordinated Universal Time)
