Wednesday, March 01, 2006

Portfolio February 2006

After a stellar January, the actively managed (AM) portion of my portfolio declined 2.81%, paced by precious metal (PM) and energy stocks. The decline was partially offset by gains from my company stock. The asset allocated (AA) portion fared better, gaining 0.29%. The overall portfolio lost 1.47% in the month. From the inception date of January 11, the AM, AA and overall portfolio gained 6.13%, 1.93% and 4.24%, respectively. The returns were calculated as described here.

As discussed elsewhere in this blog, I pared back my PM positions by 1/3 early this month. I’m still unsure about the near-term trajectory of the PM complex. If the correction continues I intend to hold and add more during dips. Otherwise I’ll continue to lighten towards my upside target of 390 in the HUI.

Energy stocks are the second largest holdings in my portfolio. They are concentrated in natural gas and Canadian oil sands plays all of which were intended as long term holds. Currently, I’m looking to add positions in uranium, coal and alternative energies.

It’s ironic that I was looking to unload my company stock which gained almost 7% in February. The stock’s increasing weighting in my portfolio was a motivation to look for exit points. Besides, having to keep it a secret was contrary to the principle of openness this blog tries to maintain. That being said, there are good technical and fundamental reasons for this stock to climb higher, perhaps as much as 30% in 3 months. This kind of upside trumps other considerations any time.

Some benchmarks were added to the performance table this month. I used ETFs as the proxies for respective indices that also allow tracking of dividend payouts. Included also were the 70/30 combination of SPY/AGG and the 35/35/30 combination of SPY/IWM/AGG. Both were more precise benchmarks for the asset allocated portfolio.