NWP Model Investment Portfolio Update:
This week my portfolio generated a return of -3.0% compared to the S&P500 index, which returned 2.5% over the same period. However, since inception (9/23/11) the NWP Portfolio has generated a return of 12.4% outperforming the S&P 500 index by 2.1%. The S&P500 returned 10.3% over the same period.
Winners: This week my winners were in my fixed-income ETFs, particularly PLW, which is a laddered treasury bond ETF and my muni bond fund, TFI. However, my position in high yield bonds, HYG had a tough week, although I am still up ~4% on that position since inception.
Losers: Everything else… Basically all equities, specialty equities and commodities positions slide this week with my worst performers being my two leveraged ETFs, my Vanguard FTSE All-World ex-US ETF, VEU and my unlevered S&P 500 index tracker SPY.
Sell orders: Coming soon on my Leveraged ETFs. I do not think that there will be much more upside in the foreseeable future on my leveraged ETFs, specifically the U.S. Equities 3x ETF, symbol BGU. This trade is already up 31% for me and I think it is running out of steam. Right now the market is sideways and choppy and I think we will continue to see the market be volatile within a range 10%-15%. I think I may have missed a good exit point at 1,300 last week, but I will be looking for another opportunity as soon as the S&P 500 index crosses the upper band in 20-days Bollinger Bands analysis.
I don’t want to be stuck in the leveraged positions if things start to nose dive as we get closer to the Thanksgiving week and the U.S. debt plan deadline. I expect more rating downgrades by Moody’s, S&P and Fitch that will be followed by a market reaction and I want to be unlevered by then. I plan to buy again after the dip and pull in another 30% or so gain in short-term trading action.
NWP Stats Update:
My readers are my lifebood, without you guys coming to my site, reading, commenting and participating, this site would be totally not fun. Therefore I believe it is important to let you know how the site is doing, let me know if you like receiving these updates.
Here are October web site statistics:
| Web Site Statistics October 1 to October 31 | |
| Visits: | 994 |
| Pageviews: | 2,340 |
| Unique Visitors: | 598 |
| Average Time on Site: (minutes) | 16% |
| Bounce Rate: | 65% |
| Direct Traffic: | 15% |
| Referring Sites: | 73% |
| Search Engines: | 7% |
| Readership Statistics | |||
| 1-Oct-11 | 31-Oct-11 | % Change | |
| Twitter Followers: | 66 | 122 | 85% |
| Newsletter Subscribers: | 46 | 54 | 17% |
| RSS Readers: | 25 | 31 | 24% |
| Alexa Ranking: | 443,676 | 248,053 | 44% |
Most Recent Posts:
Most Popular Posts:
- “I Don’t Want To Be Rich, I Just Want To Be Free”
- No Risk, No Reward; Is That Really True?
- Should You Leverage The S&P 500 Index In Your Retirement Investment Portfolio?
- 5 Key Planning Steps to Ensure Financial Freedom – #5: Financial Advisors and Monitoring
- 5 Key Planning Steps to Ensure Financial Freedom – #4: Simple and Successful Budgeting
My Favorite Reads From Around the Web:
- On Becoming a Millionaire www.BraveNewLife.com
- A Busted Transmission, And A Great Blessing www.FatGuySkinnyWallet.com
- Why You Should Write Your Personal Finance Executive Summary Today www.MoneyBeagle.com
- Not Enough Financial Literacy For A Bailout Plan Vote www.NovelInvestor.com
- Secrets of a Personal Finance Blogger www.BarbaraFriedbergPersonalFinance.com
- The most comprehensive guide on “how to become debt free” ever written. www.PunchDebtInTheFace.com
- How to Get Your Free Credit Score www.YoungAdultFinances.com
Related External Links
Related posts:
[...] to these sites that were kind enough to share our writing to their readers this past month: Net Worth Protect, One Cent At A Time, The Frugal Toad, Prairie EcoThrifter, Barbara Friedberg Personal Finance, and [...]
Hi, i´m new in your blog, my favorite blog globalperspectives.info from Steve Meyers ended, and i´m looking for a new one.
I bought a short position when the S&P500 reached the 1280 area, the FAZ ETF (3X Levereage Reverse ETF).
Your view is very similar, with my opinion.
I think you will do well with that position in the current environment, just be sure you are aware of the risks. Clearly a 3x exposure means 3-times the losses if the market moves in the wrong direction on you. But, there is a unique risk in that levered ETFs utilize daily asset rebalancing. In addition, there is also counterparty risk embedded in these instruments because these ETFs use swap contracts to get their 3x leverage. This means that if an ETF faces a bank or other financial institution in the swap contract and then the back goes bust, the ETF will take a hit if the bank owes money on the contract. It is likely that the swap contract has daily or weekly margining so in theory the losses should not be excessive assuming the ETF has multiple counterparties. However, if there is a concentration in a single counterparty and/or a massive daily move it could hit the ETF very badly. That being said, I am all for leveraged ETFs IN VERY SMALL DOSES, 15% or less of your portfolio. I also use them for more of a tactical trading approach as opposed to a long-term hold.
I agree with your point of view. That´s why a invest in the FAZ, and i only have 10% of my portfolio invest his this position. Let´s see were this can go, and how deep it goes.
I follow this site too http://gainspainscapital.com
Those leveraged positions can really come to bite you. Next time, look at call or put options.
Options are typically a losing bet, at least 80% of all options contracts expire worthless. My experience is that they are only useful as a leg in a very specific, multi-leg trading strategy. Outright long or short buts using options are money-losers for average investors. The time decay is a real killer….
However, I hear your point on leveraged ETFs, hence why I am do not plan to be a long term holder.
Also think we’re heading back into a trading range through the holiday. Hopefully it won’t get too bumpy.
And thanks for the mention, too.
Thanks for the mention!
Thanks for including me in your roundup! You’re seeing some good growth in most of your metrics.