I missed the February update for the portfolio (those of you who follow me on Twitter know I have posted very little recently). This was due to a health issue that emerged over the past few months, and a major career decision I’ve had to grapple with at the same time. I may write about both those experiences in time. For now, suffice it to say I am mostly recovered and healthy, with no life-threatening issues. Over the next few months I hope to get back to a more frequent cadence of writing and engaging.
Unfortunately, my leveraged permanent portfolio has provided little comfort during this period. It returned -5.72% in February, -1.42% in February, and has returned -0.71% month-to-date in March. Full performance data set is available here as usual. Year-to-date, the portfolio is -7.73%. This has provided a little better downside protection compared to most broad equity market indices (ACWI was -10.02% through 03/04/2022). But not much.
The real issue has been the ex-US equity exposure within the portfolio. A 50/50 NTSX/GLD portfolio would have returned -1.10% over the same period.
The current allocation is below.
Despite a difficult stretch, I remain confident in the leveraged permanent portfolio concept, and its utility as a relatively stable core for a wealth allocation over long time horizons. The low correlation of GLD to equities and fixed income provides a source of liquidity even in this difficult period. GLD is +7.51% year-to-date, versus -3.09% for the US Agg Bond Index and -10% for ACWI. Depending on an investor’s objectives, this portion of the allocation could be used to tactically rebalance into equities, or to fund near-term cash flow needs.
Personally, I will likely just rebalance some of the GLD into the hard-hit ex-US small cap portion of the portfolio. The discretionary stock portion of my wealth allocation has held up very well so far in 2022, and I have ample liquidity available to redeploy into new opportunities that will likely emerge over the coming months. (Here I owe a shoutout to fellow members of the LMT and MO investing
Hopefully you will be hearing from me more frequently in the future.