Late again this month due to some personal travel and an unexpected sinus infection. See here for the usual performance report. May was another uninspired month for the portfolio with a -0.95% loss versus modest gains for comparables. The portfolio definitely protected better than these benchmarks during June’s most volatile days. However, in the grand scheme of things it didn’t make that much of a difference.
Current allocation:
Note that this is as of the 06/24/22 close. June’s drawdown is reflected in these numbers. The most notable impact here is that gold’s weight increased a couple points versus the rest of the allocation, which had the overall effect of reducing gross exposure. You will notice a couple of new line items here also: an ex-US DM Value fund and a US Small Cap Value ETF.
Due to the quirks of my personal cash flow, I’ve had excess cash to invest during this period of market turbulence. One of the things I like to do to promote mental flexibility is add incrementally to strategies/assets that might benefit from a sustained regime change, if it seems a regime change could be underway (since we can only know for certain in hindsight). Different market regimes have different rules in terms of what will and won’t work. From a behavioral perspective, conditioning and reconditioning one’s self to the rules of a new regime is no mean feat. It takes time. It takes real dollars. Only real dollars will generate acute enough pleasure and pain responses to make the conditioning stick.
The role of a diversified portfolio core isn’t to outperform at any given point in time. The diversified core’s role is to be resilient and adaptive enough to keep you in the game across many different regimes. Also, if desired, to provide the capital base to take some big swings in the satellite portion of the portfolio. I don’t think I’ve ever come close to “cracking” the best way of integrating market feedback into a portfolio, but I know it’s something I want to continue to work on over time.