Hello Hello! I hope your’re all safe and sound. As another month came to an end, it’s time to adjust the SIA-style Pension Portfolio (PP) alongside the Global Leaders Portfolio (GLP). I have described all current thoughts about what’s happening and what’s most important on the global capital markets here while rebalancing GLP. Please take a look!
The rebalance
PP obviously needs much less action and oversight than GLP. It’s aim is to minimize efforts 1st thing. PP is nicely adjusted to Contraction period we’re in, so only tiny adjustments happen this month.
Namely I took the $1k monthly injection and purchased SPY and EEM with a 50/50 split. That’s because of two things I describe in details in the GLP rebalancing post and will only mention them shortly here: (1) big volatility normalisation in May (2) relative yields of equities vs. bonds and cash now looking attractive. Besides PP equity allocation was at 10% only at end of April. That’s the middle of what SIA suggests during Contraction. We have some space to be adding to equities then without risking going out of limits.
The anchors of the GLP performed as follows in May:
TLT moved -3.2% in May as an effect of an unwind of the massive “flight to quality” that pushed it higher in Feb/March (flight to quality: a technical term used to describe a situation when investors look to hide their holdings in safest possible assets while selling out of equities in times of market turmoil).
GLD effectively gained 2.5% in May expressing investors’ further expectations of (a) higher inflation in the future (b) Gold still being a value carrier as times are uncertain.
Portfolio holdings are traded at the closing price on the rebalancing day.
Current structure of the GLP can be found on Portfolios page.
Total Personal Return since inception (TPR) o GLP as of close 29th May 2020: +0.1%.
Next update in a month.
Yours,
PC
Disclaimers: None of the ideas, views and thoughts presented here shall ever be taken as a recommendation to buy or sell stocks,bonds,FX,commodities or any other financial instruments as stated in REGULATION (EU) No 596/2014 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC or the Regulation of the Polish Minister of Finance of 19 October 2005 on information constituting recommendations regarding financial instruments, their issuers or exhibitors (Journal of Laws of 2005, No. 206, item 1715) or the Polish Act of 10 February 2017 amending the act on trading in financial instruments and some other acts. The article is for educational reasons and purely presents private views of the author, thus the author shall not be claimed eligibile for any losses of a third party resulting from trading activities based upon this article. The author uses his best knowledge and data from sources believed to be reliable, but makes no representations as to the accuracy of the data.Full Disclaimers&Liability Limitations page.
