ETF Monkey Personal Portfolio

A Peek Into ETF Monkey’s Personal Portfolio – Q1 2019

On January 18, 2019, I published an article revealing the status of my personal portfolio as of the end of 2018. In that article I shared that, while my portfolio had underperformed the market through Q3, my caution paid off in spades during the deep downturn of Q4, particularly the month of December.

In Q4, the Dow dropped by 11.83%, the S&P 500 by 13.97% and the Nasdaq an otherworldly 17.54%! In contrast, my portfolio only took a hit of 4.78% during Q4. For 2018 as a whole, my portfolio declined by 1.94%. In contrast, for the full year the Dow dropped by 5.63%, the S&P 500 by 6.24% and the Nasdaq by 3.88%.

Q1 2019 – A Period of Learning and Reflection

In late-January, I wrote an article for Seeking Alpha featuring a 2-ETF combination that beat the total return of the Vanguard Total Stock Market ETF (VTI) over a 10-year period, and with lower risk to boot!

Included in the comments section was a response from a reader who complimented me on my efforts to balance risk vs. reward, and suggested some information from Peter L. Bernstein and John C. Bogle on exactly that topic. As a result of what I learned, I started spending a fair amount of time on the Portfolio Visualizer website, running all sorts of historical backtests and, frankly, finding myself surprised at some of the results I came up with.

From that work ultimately came a 5-article series that went in search of the ‘perfect portfolio for the next 10 years;’ spanning both this blog as well as Seeking Alpha. I might suggest that the entire series is beneficial reading for any investor serious about the matter of portfolio allocation, and ensuring that one is not taking on a lot of extra risk without a commensurate addition to reward. To make it easy for you, I developed a brief article with a handy index to the entire series.

Q1 Status and Comments on Activity

Here are the same graphics that I first presented in my Q3 2018 summary. Feel free to take a quick peek at the explanations I offered with respect to the details of how these work.

First, what I refer to as the big picture.

ETF Monkey Portfolio - March 2019 Summary Weightings
Summary Weightings – By Asset Class

I’ll start with a few comments here, before we move on to the details of my holdings. I don’t generally do this, but since there are some substantial changes, I will also reproduce the December 2018 version of the same graphic here.

If you compare the two, you will quickly notice a rather substantial 7.5% increase in my target weighting for bonds; now at 26.45% as opposed to 18.94% as of YE 2018. In brief, that allocation came from lowering my allocations in cash, U.S stocks, and a small drop in TIPs. I made these decisions as a direct result of beginning the process of incorporating the learnings of that 5-article series in my personal portfolio.

Next, the details of all my positions, in descending order by weight.

ETF Monkey Personal Portfolio - March 2019 Detail Weightings
Detail of Holdings

The ‘Difference’ column features the adjustments I have made in various weightings between 12/31/18 and 3/29/19. As explained in detail in that Q3 2018 article I referenced, any difference less than .50% is in yellow (immaterial), any difference greater than .50% is either green (higher) or red (lower).

As can be seen, the major difference is that I incorporated the
iShares 20+ Year Treasury Bond ETF (TLT) into my portfolio. As mentioned earlier, this is a direct result of the material covered in the ‘perfect portfolio’ series. Looking at the items in red, you will be able to quickly determine that the funds for that purchase came from a combination of cash, BSV, ITOT, and TIP, representing the asset classes I adjusted downwards, as described above.

Final Thoughts

As can quickly be seen, I continue to ‘put my money where my mouth is.’ The actions taken during Q1 in my personal portfolio line up with what I have recommended to readers both here on my blog and in my work for Seeking Alpha.

Let’s talk for a minute, though, about my initial 6% allocation to TLT.

In my writings, while I offer suggestions and ideas for readers to ponder, I am always careful to point out that each investor needs to carefully consider both their personal view of the “big picture” as well as their unique circumstances. One of the key takeaways from the Peter L. Bernstein article reviewed in the introductory article of my 5-article series is that each investor must be comfortable enough with their asset allocation that they do not overreact during periods of market turbulence.

My 5-article series describes as much as a 50% allocation to TLT, which holds long-term U.S. Treasuries. At this particular point in time, however, I am personally pondering the fact that the yield curve is almost flat between shorter and longer-term bonds. As a result, I have decided to ease my way into longer-term Treasuries, hedging just a little against the possibility that rising rates eat into the price of TLT.

Now, that decision is clearly open to debate. Some readers may not agree with this approach. But that’s the beauty of investing, isn’t it? Each of us retains the dignity to make our own choices. At the same time, we must be equally clear about the reality that we are the ones who will reap the ultimate results of these choices.

I hope all of this has given you at least a little something to think about.

Until next time, then, I wish you . . .

Happy investing!

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