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 cults communities)
Hopefully you will be hearing from me more frequently in the future.
Following the link to the performance chart I get the following Portfolio Visualizer error: “Unknown symbol: LPPTRK”
it must be an issue with the custom portfolio displaying to other users. I’ll have to come up with a different way of displaying the data for future posts.