September 2022 Portfolio Review

Another terrible, horrible, no good month - sound familiar? In an already bad year, September was especially bad - portfolios down between 5.7 and 11.8%. Q3 dividends meant a few portfolios didn’t require many withdrawals - a thin silver lining on an otherwise dreadfully gray cloud.

2022/09 Portfolio Review Spreadsheet
Comp Prev. Mnthly Inflation,Classic 60/40,Golden Butterfly,All Seasons,RPC Stability,RPC Income,Bogleheads 80/20,Qian,Levered Butterfly,100% Equities,RPC Growth,Levered Seasons10/2/2022,0.6917,-7.61%,-6.62%,-7.52%,-5.72%,-9.96%,-8.75%,-10.84%,-9.49%,-9.77%,-11.78%,-11.18%Month’s Rank,4,2,3,1,8...

Down, down, down they go. Another month of terrible performance, highlighted by the fact that only one asset among the twenty that I track finished the month in positive territory: DBMF, the managed futures fund. For portfolios, all eleven finished deep in the red, with the “best” still losing 5.7%. Inflation remains high, with a print of 8% for the previous twelve months. But more dramatic seems to be the Federal Reserve’s willingness to raise interest rates to counteract said inflation rates. When all you have is a Howitzer, everything looks like something to blow to smithereens, I guess.

I am trying to look for silver linings, though, and so three cheers for DBMF, the preferred asset for investing in a managed futures strategy. DBMF was up 5.77% for the month, a good month for any asset in any month, really, but even more dramatic in this case as it was the only one in the black. I am a recent convert to managed futures, but am really glad that I am, since it is heartening to see it do well at a time like this. Theoretically at least, it could do just as well in an opposite market environment - that’s the advantage of being able to go long or short across dozens of futures contracts. The embedded leverage ETFs brought up the rear, as usual, and in the non-leveraged category, both the REIT index fund VNQ and the utilities index fund VPU were both down double digits.

Third quarter dividends also proved helpful, as some portfolios were able to avoid having to withdraw that much from a sinking ship. Distributions for the month continued their upward trajectory, with a whopping $3591 withdrawn this quarter, which is 7.7% more than was drawn at the start.

As for portfolios, it was a bloodbath all around. The RPC Stability did the least horribly, but an ostensibly stable portfolio like that being down 5.72% should give one pause. Three portfolios had double-digit losses in the month, and no surprise two of those were the most leveraged (the RPC Growth - hold your chuckles - and the Levered Seasons. The third double-digit loser, the Qian portfolio, is really struggling even with a modest amount of leverage. Its high allocation to bonds is certainly not helping.

In the horserace between Risk Parity-influence portfolios and not, RP continues to have a slight edge, though I’d emphasize it really wouldn’t be wise to claim any victory just by being slightly less miserable than a counterpart. RP portfolios were first, second and third this month, but also eighth, ninth, tenth, and eleventh. Can’t really call that much of a victory, really.

Monthly Results:

September 2022 Monthly Results

Cumulative Results:

September 2022 Cumulative Results

Asset Performance:

Asset Performance for September 2022