Thursday, January 31, 2008

Portfolio January 2008

January was a month not too soon to be over. At one point, my portfolio was down double digits which would have made it the worst percentage decline ever. It recovered nicely though. The actively managed accounts retreated 1.67%, the asset allocation accounts 4.06%, giving an overall decline of 2.77%. It was nowhere as bad as the worst month (Sept 2006, -4.29%) or August and November of last year. Looking at the benchmark ETFs, SPY and VTI each gave up more than 6%. As horrible as they were, they fared better than EFA, EEM or the Q's. Relatively speaking, I did very well.

Most of the out performance came from the precious metals where the HUI index gained 12% for the month. However, my PM portfolio actually declined slightly since it was skewed towards silver and juniors which lagged big name gold miners. However, it was more than made up by the 16% increase in CEF.

I also did very well in my trading account which is not part of the portfolios reported here. I made a gain of $10k (from a starting value just over $25k) due to a combination of being on the right side, leverage and getting the major turning points right. It goes without saying that it's almost impossible to keep up this kind of performance although I'd like to try :-)

The month-ending portfolio allocations are in the tables below. This is the first time I break down the non-PM resource/commodity sector into subsectors of energy, base metal and agricultural. I'm underweighing base metals because of their sensitivity to economic conditions. On the other hand, I've been adding to agriculturals on weakness this past month.

As mentioned here, I got out of the closed-end muni bond funds. The choices are either going back in or to buy TIPS (TIP) on anticipation of an increase in inflation. Long bonds (i.e. TLT) are out of the question as we're near the top of its price channel. For now, I'm perfectly content to leave the money in cash to ponder my options.