Thursday, May 08, 2008

Portfolio April 2008

It's good to be back! My "vacation" was more hurried than anticipated. Traveling with a toddler was much harder than anticipated. After only checking the market sporadically, I take some solace in ending with a positive month. My portfolio lagged behind the general market as gold and gold miners took a drubbing. The actively managed accounts gained 4.96%, bringing the YTD total to 3.5%. The asset allocation accounts gained 3.68%, bringing the YTD total to -1.32%. Both are doing well over the benchmarks, although the lead shrunk in the past month.

I'm still trying to get a handle on the markets after being away for two weeks. I've mentioned the "momentum" inherent in my views before; for now, I still see the S&P in a bull phase, the 200 pt drop on Tuesday notwithstanding. On the daily chart, some momentum indicators are pointing down, but I see that as a prelude to the necessary skirmishes around the critical 1400-1410 level. All that said, there's little sense to speculate on the S&P when both energy and materials are acting so well. It reinforces my point that we had an oversold interim bottom in Jan-Mar -- and an interim bottom does not change the major underlying trends, so what has worked will continue to work.

I anticipated some fireworks while away. There may be two events that fit that designation. Firstly, the Shanghai index successfully defended the 3000 level as I predicted and has been up over 20% since. The government reduced its stamp duty which was seen as an important change in attitude. (No, it's not a free market, but then again, there is no free market anywhere.) I normally like to see a second bottom but don't expect a severe re-test in this case. The second major event may be the bottoming of the PM complex with gold dropping below the $850, its nominal high in the 80's. I'll write about the PMs again later this week.

There wasn't much trading activity last month. I withdrew some funds from my trading account to pay for living expenses and taxes. The next major task is the annual rebalance of my asset allocation portfolio. I'll probably leave the allocation unchanged, but juggling half a dozen accounts and sort through the tax consequences will be challenging.