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Saturday, 29 May 2021

End of MAY 2021 "12% solution" portfolio changes

For the end of May the emailed trading signal is to invest 60% in SPY and 40% in JNK. As this is a change in allocation from last month, it requires selling MDY and buying SPY. When the market is open (Monday night my time) my monthly trade will therefore be:

SELL MDY : SPDR S&P MidCap 400 Index Fund

BUY SPY : SPDR S&P 500 Index Fund 

HOLD JNK : SPDR Barclays High_yield Corporate Bond Fund

According to the monthly newsletter, the 2020 performance for this model was +40.6% and for 2021 YTD performance is now +11.2%. My YTD performance is only 6.78% due to a combination of timing differences, buy/sell spread, trading costs, not having an exact 60:40 asset allocation (due to rounding down to the nearest tradeable quantity) and the fact the my '12% solution' portfolio is on my IG trading account which also includes some ASIA (Betshares Asia Technology Tigers ETF) which has been trending down in recent months.

I suspect that due to the small value of this portfolio (around $10,000) the trading costs and account keeping fees will be a massive drag on my actual ROI compared to the 'model portfolio'. It would probably be better to implement the "12% solution" via an account that has zero trading costs and no account keeping fees, but I can't be bothered opening yet another trading account for what is basically an experiment. I'll probably close all positions at the end of June, close the IG account and repay some of my portfolio loan, as the potential profit doesn't justify the extra calculations I'll need to do for my annual tax return for this account. 

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