Monday, July 09, 2007

Portfolio June 2007

Alright, another very late monthly summary. There was nothing exciting. The major indexes were down in June, with S&P giving up 1.5% or so. My portfolio equally took a hit. I took positions in the passive accounts near the highs of last month. Consequently, passive accounts incurred greater losses than the general market: -1.8%. The biggest loss came from international REITS (RWX) which was expected, but I still decided to include it in an allocation strategy intended for long term buy-and-hold. The actively managed accounts only gave back 0.8%, largely due to continued strength in the energy sector. Cash level at the end of the month was nearly $22k.

I have finished taking initial positions in the passive accounts. Some ongoing maintenance is still required as new deposits such as 401k contributions are made. I’m also satisfied with my PM positions. New additions will probably come in the area of base metal and oil services sectors.

Since I expect the US economy to slow down or even slip into a recession later this year due to the weak housing market I have been thinking about the need for protection when that day comes. Looking at the brighter side of things, I don’t expect a deep recession even if there is one. I also expect the central banks to open up the liquidity spigot in response so that PMs will do very well. It’s also hard to see growth rates in BRIC countries turn negative so commodities will continue to be in demand. If and when the market turns, I’ll probably scale in my hedges/shorts, starting with emerging markets (but ready to take quick profits), and move onto domestic equities with emphasis on financials and consumer discretionaries.