The Momentum signals I use for the Dual momentum portfolio has served me well through the Corona related stock market crash. It now signals almost only the risk-off assets cash and bonds. A few more per cent decline and and there will be no stock signals at all.
I have also, as described in the investment strategy, downsized the Trending value and Long term portfolios to 5% each of the total portfolio.
With this I consider Idun Portfolio to be well positioned until the crisis is over and the market optimism is back. No one knows how long the bear market will last, months or years, but eventually it will turn into a bull market again. The experience from earlier crashes is that there will now be good opportunities for value investing and stock picking. I hope/expect Trending value to perform well the coming years, and also Long term, while Dual momentum will protect the downside as long as the bear roars.
Some learnings from last few weeks:
1. I use a modest leverage as part of the strategy, but I lack firm rules for how to deal with it.
I have now closed all leveraged positions and also sit on quite some cash. I should have done this already when the first signals to leave stocks where show in late February. This delay has cost me roughly 6-7% per cent in performance this year.
2. I am a big fan of diversification in order to reduce the risk. Over the last year I have introduced a SE/Global variant of the Dual momentum portfolio, and in January I was forced to close my Dual momentum SEK-portfolio, which was replaced with a second SE/Global portfolio. Both variants were in February positioned in Spiltan Aktiefond Investmentbolag, a mutual fund investing in a number of Swedish investment companies. And my Long term portfolio has evolved into investing in a subset of the same investment companies. As a consequence I was quite heavily concentrated in these companies when the decline started and these companies fell faster than the rest of the portfolio. I have therefore removed Spiltan Aktiefond Investmentbolag as selectable fund from SE/Global 1, even though I still consider it an excellent performer.
3. I should have downsized Trending value and Long term already at the same time when I should have ended my leverage.
4. I am in general quite pleased with the behavior of my rules-based portfolio. It suits my temperament well, and enables me to stay calm and take firm actions also during stormy weather.
I have also, as described in the investment strategy, downsized the Trending value and Long term portfolios to 5% each of the total portfolio.
With this I consider Idun Portfolio to be well positioned until the crisis is over and the market optimism is back. No one knows how long the bear market will last, months or years, but eventually it will turn into a bull market again. The experience from earlier crashes is that there will now be good opportunities for value investing and stock picking. I hope/expect Trending value to perform well the coming years, and also Long term, while Dual momentum will protect the downside as long as the bear roars.
Some learnings from last few weeks:
1. I use a modest leverage as part of the strategy, but I lack firm rules for how to deal with it.
I have now closed all leveraged positions and also sit on quite some cash. I should have done this already when the first signals to leave stocks where show in late February. This delay has cost me roughly 6-7% per cent in performance this year.
2. I am a big fan of diversification in order to reduce the risk. Over the last year I have introduced a SE/Global variant of the Dual momentum portfolio, and in January I was forced to close my Dual momentum SEK-portfolio, which was replaced with a second SE/Global portfolio. Both variants were in February positioned in Spiltan Aktiefond Investmentbolag, a mutual fund investing in a number of Swedish investment companies. And my Long term portfolio has evolved into investing in a subset of the same investment companies. As a consequence I was quite heavily concentrated in these companies when the decline started and these companies fell faster than the rest of the portfolio. I have therefore removed Spiltan Aktiefond Investmentbolag as selectable fund from SE/Global 1, even though I still consider it an excellent performer.
3. I should have downsized Trending value and Long term already at the same time when I should have ended my leverage.
4. I am in general quite pleased with the behavior of my rules-based portfolio. It suits my temperament well, and enables me to stay calm and take firm actions also during stormy weather.
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