[Note: I started the Sleepy Portfolio in 2005 to benchmark my personal portfolio, which was then invested mostly in individual stocks. The portfolio started off with an initial cash infusion of $100,000 but no new money has been added since. The portfolio has the following asset allocation: 5% cash, 15% short bonds, 5% real return bonds, 20% Canadian stocks, 22.5% US stocks, 22.5% Europe and Pacific, 5% Emerging markets and 5% REITs. The entire portfolio (apart from the cash portion) is invested in broad-market, exchange-traded funds (ETFs) trading in the Canadian and US stock exchanges. The cash portion is invested in the Altamira T-bill Fund.]
So much for Hindenburg omens and death crosses! The market rally in September that saw US markets post one of the biggest monthly gains in the past 10 years meant that the Sleepy Portfolio gained 9.4 percent since our last update. Canadian stocks, EAFE markets (all foreign market returns are reported in Canadian dollar terms), Emerging markets and REITs all posted double digit gains in the past quarter. US markets gained 8 percent and Real return bonds returned 4.7 percent. Only short-term bonds and cash stayed at more or less the same level. Year-to-date, the portfolio has gained 4.8 percent.
Here’s how the portfolio looked at the end of 3Q-2010:
The portfolio has accumulated a bit of cash and US stocks are roughly 2 percent below target. So, that’s where the accumulated portfolio income will be reinvested. It would be just the second trade in the Sleepy Portfolio in 2010. If current trends hold, the portfolio will end up spending less than 5 basis points on trading commissions this year.