Deanco Investment “Group” Update – March 2020 (Month 29)
There is no group, it is just me and my money. Each month I’m sharing my investment portfolio, individual investments, and performance (good or bad). This is my March 2020 update (29 months of tracking it).
That was an ugly month…for everyone! To tell you how bad the stocks I own in my portfolio are my portfolio lost to the global stock market this month…while being only 57% allocated to stocks (and with only 19% allocated to individual stocks).
Pro Tip [hint…Deano]: To generate alpha you are supposed to pick stocks that outperform the overall market. You are not doing this correctly!!!
I own some individual names that got obliterated during the downturn in March. Almost everything I own continues to puke…hard. Fun times!?! I’m not having fun at all and unfortunately don’t anticipate things to get better. But I’m hunkering down to weather it! I don’t intend to sell positions that are on the ropes. I believe they will live to fight another day and I look forward to selling them then.
Asset Class Allocation
The only thing that I own that didn’t get hammered this month was my bond position. That’s it! Everything sold off hard. Gold held in there a bit better but still sold off. I’m not entirely happy with my current asset class allocations but I’m also not planning any major changes to anything right now.
I am not planning to add to stocks because I think we will see things go lower (I hope not but Mr. Market doesn’t care what I think). I don’t think I can time the market so I’m not selling stocks either (in case I’m wrong about them going lower). I am going to sit on my current bond allocation and wait to deploy it later (or hold onto it in case something drastic happens in my real life and I need to tap funds). I’m not planning to sell any of my commodity positions (even though I’m pretty overweight in that area). I’ve been working to reposition all of my allocations towards their targets but the markets just keep whipping around and I’m not moving fast enough to catch it (which is by design).
I can say I am very happy about one thing (within my stock asset class allocation). This month was the first month where I achieved the correct stock sector allocation. I have been working towards this for many months (since November when I implemented a new model for how I manage my portfolio).
Transactions This Month
- Sold: SCHO – Schwab Short Term US Treasury ETF
- Bought: Various Fidelity Sector ETFs
Thinking: Late last month I had sold off some of my commodities position (and was storing it in Bonds until I could reinvest it). I was overweight commodities more than I wanted to be (and underweight stocks more than I wanted to be). The stock market had dipped at the end of February and I reinvested this money at the beginning of March. Worked like a charm! The stock market got crushed in March and bottomed out almost 28% below my investment that day. Great timing Deano!!! I sometimes think the world is set up to punk me…over and over and over again. Ha! It isn’t that bad. This was not a huge move it was just a little rebalancing (which I do often). I just felt like this particular time was particularly a slap in the face! Regardless, over the past few months, I have been working to get my stock portfolio to match the sector weighting of the 25-year average of the S&P 500. With this rebalancing I finally got everything lined up the way I wanted it. I’ve been working on this since November and tried to move things slowly taking advantage of swings in sector returns where I could. I am very excited about this methodology going forward. It should make my investment management process take only a few hours each month. I plan to do this at the beginning of each month when I calculate the prior month’s performance and allocate any new capital for the month. If I need to do any rebalancing between the sectors, I will do it at this time as well (but will likely only do this is there was a big divergence between sectors during the month).
- Sold: MU – Micron Technology
- Sold: BIIB – Biogen Inc
- Sold: MO – Altria Group Inc
- Sold: PM – Philip Morris International
- Bought: Various Fidelity Sector ETFs
Thinking: I’ve been moving away from investing in individual stocks over the past few months. I’ve been lightening positions a ton and reinvesting the proceeds in Fidelity Sector ETFs. The amount of time/energy it takes to keep up with individual stocks is too much and I don’t think the benefits I receive are worth the effort. I’ve been tracking all this in detail for 29 months and I still will (because I like doing it and I like the level of control I feel over my portfolio when I do it). As far as investing in individual stocks goes, I might change my mind on the topic later but for now, I’m too busy with work and other things in life to dedicate the time to individual stock selection. I enjoy investing but I feel like 1) it is impossible to beat the overall stock market consistently (especially if you are not doing it full-time) and 2) most of the outperformance / underperformance in my portfolio over the past 29 months have more to do with luck / things nobody could plan for (good or bad), and 3) I started doing this a couple of years ago because I was losing sleep about my investments (and that is no longer the case). I decided that this month any position where I was sitting on a gain I would close that position out (get out while the getting was good). I have tons of stocks that are down significantly. I’m not going to unload those (or get shaken out of the position) because I believe the companies are good, undervalued, and will eventually bounce back. I will eventually exit all those positions as well but not at fire-sale prices. I’ll just hold onto them. I’m not in any hurry at all. I sold out of the 4 positions this month because they had performed well for me (and I wanted to whittle down the names I have to keep up with).
- Day Trading(?!?!): DXC, M, VIAC, TUSK
Thinking: During some of the above selling and reinvesting I did some day trading?!? I didn’t intend to and didn’t even want to…believe me! I have several positions in my portfolio that are down 60+% (fun times!!!). During the height of the selling in March, some of these positions were absurdly oversold in my opinion. When I sold out of some of the above stocks, I added to several of my positions. Things rallied and in two days I was up between 20% and 48% in the positions. I sold out of every share I had bought two days earlier in all those positions (closing out every single trade I’d made). The darn buys hadn’t even settled yet! The last time I traded like this was during the financial crisis in 2008-09. It was not fun then and it was not fun now. As I closed out the trades, I sat looking at the screen and thought about how I couldn’t believe this level of volatility had returned to the market. I also thought “I’m too old for this shit!” HA!
For full update download this ^^^ PDF.
My individual positions (and all kind of additional information about each of them) can be found here:
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