June 2017 Performance

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PERFORMANCE:

The Equal weighted portfolio returned 0.8% and is the baseline for the other portfolios. 

The TA portfolio (which actively allocates among the four asset classes that are in the equal weighted portfolio) outperformed the equal weighted portfolio returning 1.6%. 

The Enhanced portfolio (which uses the allocation of the TA portfolio and seeks to enhance those returns with security selection) did the worst losing -0.9%.

The relevant security returns (used in the above three portfolio's) for the month of June (excluding dividends) were: VTWO 3.1%, IEMG 0.4%, VONE 0.2%, DSEUX -2.5%, JNK -0.5%, AGG -0.2%

Color significance for whole post: 
Red is small cap equity 
Orange is large cap equity
Purple is high yield debt
Green is investment grade debt


ALLOCATION:

Allocations at month end for each portfolio are shown above. 
ATTRIBUTION: 

Jun - 17
Allocation Rt   0.8%
Selection Rt   -2.5%
The way to think of this is that the "Allocation Rt" is how much the TA portfolio out (or under) performed the equal weighted portfolio (how much did the asset allocation benefit returns). The "Selection Rt" is how much the enhanced portfolio out (or under) performed the TA portfolio (how much security selection benefited returns).


COMMENTARY:

Equal Portfolio: This portfolio is the baseline, which the other portfolios are based off of.

TA portfolio: Having the full allocation being in equity was helpful in particular the heavy weight to small cap equity was very beneficial.

Enhanced portfolio:  The vote in Great Britain added uncertainty in international markets which hurt equity pricing overseas. The drop in oil prices also hurt both DSEUX which is 25% invested in energy companies and emerging market equities which have a high correlation to commodities prices.  International markets were also hurt by a change in central banks discussions. They began talking about raising rates because their economies are getting stronger.  This is a good sign, in that it means they are doing well but also means the stimulus will be reduced in coming months. I remain focused on international over US equity with full acknowledgment that this bias was painful in June.


TRADES (performed in the morning on July 3rd):

Equal Weight Portfolio:
  • Beginning cash $197.27
  • No trade made as allocations were within acceptable parameters and cash was below $1000
TA Portfolio:
  • Beginning cash $14.68
  • Sold 75 shares of VTWO at $113.51 per share, $7 commission, total proceeds $8,506.25
  • Purchased 76 shares of VONE at $111.72 per share, $7 commission, total cost $8,497.72
  • Cash left over $23.21
Enhanced TA Portfolio:
  • Beginning cash $161.91
  • Sold 164 shares of IEMG at $59.26 per share, $7 commission, total proceeds $8,235.64
  • Purchased 82 shares of KXI at 102.26 per share, $7 commission, total cost $8,392
  • Cash left over $5.23

DISCLAIMER:
Past performance is not a guarantee of future performance.  This strategy is presented for informational purposes only and is not a solicitation to buy or sell any securities. October is one of the peculiarly dangerous months to speculate in stocks in.  The others are July, January, September, April, November, May , March, June, December, August and February. ~ Mark Twain

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