Tuesday, July 01, 2008

Portfolio June 2008

June was truly an awful month across many major market segments. The benchmark index ETFs all gave back between 8 to 10%. However, my actively managed portfolio benefited first from high energy prices and then from a reinvigorated PM bull to finished the month at +1.24%. YTD it's up 9.27%. The asset allocation accounts suffered with the rest of the market but fared better because of the overweight in energy and PMs along with hedged mutual funds. The AA accounts lost 5.09% for the month and 4.78% for the year. The overall portfolio lost 1.58% for the month but is still above water for the year with a gain of 2.78%.

As discussed in the previous post, I expect strength in the PM sector to continue. The overall market is frankly in dire straits as investor become disillusioned with the fairy tale of a 2nd half recovery. Cash is king again, or maybe it's only 2nd best? With real rates negative everywhere, gold is again shining through as a safehaven asset.

I'm making few allocation changes these days, although there are some short term trades around the margin. An example would be the covered calls I wrote last month. I'm not shorting this market aggressively as I've found that I do much better on the long side. With a heavy allocation to PM shares my portfolio is doing well despite the recent market turmoil.

There was a $20k addition to the AM accounts this month as I convinced my wife to move some cash from her ING accounts to Scottrade. I have already spread them over JTD, NXZ, BZF and CYB. The first two are closed end funds of dividend paying stocks and muni bonds respectively. The latter two are currency ETFs of the Brazillian Real and Chinese Yuan. The goal here is to better return than a savings account without taking too much risk.