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Thursday, 1 July 2021

End of JUN 2021 "12% solution" portfolio changes

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

SELL SPY : SPDR S&P 500 Index Fund 

SELL JNK : SPDR Barclays High_yield Corporate Bond Fund

BUY QQQ : Powershares Nasdaq-100 Index Fund

BUY TLT : iShares 20+ Year Long-Term Treasury Bond Fund

My current account balance is A$12,164.40 and aside from the "12% solution" holdings I still have A$581.50 of the ASIA ETF, so the actual investment amounts for this month will be around A$6950 (60%) QQQ and A$4600 (40%) TLT, but the exact amount trading will be rounded down to the nearest whole number quantity of the ETFs.

According to the monthly newsletter, the 2020 performance for this model was +40.6% and for 2021 YTD performance is now +13.7%. My YTD performance is only 10.43% 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 (Betashares Asia Technology Tigers ETF).

I didn't get around to closing out my positions and shutting down the IG account before the end of June (Australian FY end), so I'll probably keep doing these monthly trades for another 12 months and see how things go. It's really not cost effective to do the required monthly trades with such a small portfolio using the IG trading platform. To do this properly would require either a larger financial committment (say a portfolio amount of $100,000+) or else find a trading platform that has suitable ETFs available to trade and $0 trade fees and no account keeping fee. Doing monthly trades also means any capital gains will be taxed at my marginal tax rate (you only get the 50% CGT discount for assets held for more than 12 months), so this would probably also be something better done inside an SMSF where the tax rate applied to short term capital gains is the same as long term capital gains, as is only 10%.

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