Monthly Archives: December 2016

Performance Tracking November 2016

performance_20161130For calculation methodology see earlier post

Passive Portfolio

Trump’s election proved to be an inflection point for the market. Stocks received a bid on the expectation of his pro-growth policies, while rates shot up in anticipation of additional government borrowing to fund infrastructure spending, among others. Benchmark SPY climbed by 3.68% while AGG declined 2.75%. Within the stock market, sector rotation was the name of the game. Defensive sectors like utilities and staples gave way to financials, energy and consumer discretionary. Small caps outperformed while EM severely lagged. The precious metals complex had another bad month even though the immediate reaction after the election was positive. Gold has declined so much that the whole break-out from last December is about to be invalidated. A new low could well form early next year.

The passive portfolio lost 0.37% last month; without the PMs, it gained 1.11%, matching the 60/40 benchmark exactly.

Active Portfolio

The active portfolio eked out a positive month with a gain of 0.80%. DGI gained 2.24% vs. 3.68% for the SPY. Besides PMs, another source of under-performance was closed-end muni’s in the face of rising interest rates and potential tax cuts on the rich. The overall portfolio gained 0.63%, lagging the bench mark 60/40 and 75/25 portfolios.

There wasn’t much trading activity in the month as I loath to make big changes during big transitions. The most significant move was raising some cash by selling the vested RSUs in my employer.

Plan and Forecast

I laid out my S&P predictions here, and fully expect to pick up some bargains, esp. large cap growth stocks if the Q1 correction is realized. As part of the annual re-balance, I may fine-tweak my passive portfolio allocation by increase domestic equity by 5% and entirely exit the total bond market that’s currently only at 5% anyway. The majority of fixed income will be left in stable value funds which has proven prescient this month.