June 2023 Portfolio Review

Greetings from Amsterdam! Nice month for investors - the kind that reminds you why it’s time in the market, not timing the market. Inflation dropping. All portfolios up but one, led by 100% equities. Meanwhile, not a great showing for RP - all 3 portfolios on the overall podium are traditionals.  

2023/6 Portfolio Review Spreadsheet
Comp Prev. Mnthly Inflation,Classic 60/40,Golden Butterfly,All Seasons,RPC Stability,RPC Income,Bogleheads 80/20,Qian,Levered Butterfly,Cap Eff Butterfly,100% Equities,RPC Growth,Levered Seasons7/2/2023,0.003333,2.88%,1.45%,1.01%,1.71%,1.07%,3.51%,-0.29%,2.14%,2.24%,4.66%,3.87%,3.85%Month’s Ra…

Wasn’t sure I’d be able to do a portfolio review to review June - I’m on Day 3 of a 33-day trip to Europe. Arrived in Amsterdam yesterday and we had a busy day yesterday and have a full itinerary tday, but jet lag intervened to have me up at 5:00 am - enough time to pop out one of these before beginning the day. Great weather, beautiful city, wonderful food (had a Dutch pancake for breakfast, Lebanese Sajeria for lunch, and Spanish ham and olives accompanied by a Belgian Witbier for dinner) and spending great time with my son - wow!

The good vibes continued with this portfolio review. June was certainly a good one, the kind that sneaks up on you and reminds you why investing works, if you stick with it. The 100% Equities won the month on the strength of strong US and international stocks, combined with great dividends this month. It was up 4.66%, edging out the RPC Growth portfolio (+3.87%) and the Levered Seasons (+3.85%). This performance helped the 100% Equities portfolio cushion its lead in the overall rankings. It is now up to $899,315, so just about 10% down from its starting point. Considering what we went through in 2022, when the sequence of returns risk hit the portfolios at the worst possible time - basically at the starting gate - I’m actually pretty impressed that we have been pulling out 4% and they remain healthy and viable.

The distribution of mid-year dividends also contributed to good portfolio performance, with two even having their entire distribution fulfilled by dividends received. Speaking of distributions, there was hardly a nudge upwards from the amount pulled in May due to pretty modest inflation. The CPI figure is now down to 4% annualized. Rising valuations, supported by dividends, with dropping inflation - what’s not to like?

Well, bonds. They were down this month, but to be fair, that’s exactly what we’d expect in a good month for equities. The 3X leveraged intermediate-term bond fund was down 5.5% and the non-leveraged version (VGIT) fell 1.2%. Again, not a problem, since this is what diversification means, but you can see the limits of a portfolio like the Qian, which is so dominated by fixed income. It was down -.3% in a month where you couldn’t swing a dead cat without hitting a profitable portfolio. No bueno.

In terms of what worked this month, it was just about everything. GDLC, the digital currency basket fund, climbed 23.8%, in what was another strong month for crypto. The next best funds were all of the 3X leveraged equity funds: TNA, UPRO and DRN, and then AVUV, Avantis’s Small-cap Value fund, was the best non-leveraged investment, up 9.6%.

Finally, like May 2023, this was not a month when Risk Parity seemed to be much of a magic potion. The simple, two-fund all equity portfolio is in first place, followed by the 80/20 and the 60/40, so it is really hard (right now) to say definitively that Risk Parity solves a problem that simplicity couldn’t solve either. As I said to myself and through the blog when I started, the whole idea behind this is a test, and if it should be the case that Risk Parity finishes behind traditional portfolios, then so be it. Of course, a two-month stretch in a two year test is not close to being enough to call out any results.

Monthly Results:

June 2023 Portfolio Perfomance

Cumulative Results:

Cumulative Performance as of June 2023

Asset Performance:

Asset Performance for June 2023