Investing Blog

Outside of my own retirement accounts and long term investments I like to goof around with 5-6 stocks that I switch up, re-allocate and reinvest every few months. I changed up quite a bit of my portfolio on January 26 after I started to get a little more confidence in the markets, and that I could manage to at least make some money on the reflation trade. Now, nearly 4 months later, I’m up 18% and though I’m reasonably happy, I could have done better.

First of all, here’s my holdings and how they’ve performed since Jan 26.

iShares Silver Trust (SLV) +15%
Market Vectors Steel ETF (SLX) +41%
Philip Morris International (PM) +11%
Powershares DB Crude (DXO) +39.9%
Ultra Financials Proshares (UYG) +12.9%
UltraShort 20year treasuries (TBT) +4.5%

So, all of them are up, that’s a plus. But they’re not all doing that great, especially when compared to the general market which is up 8.1% on the S&P. All but one of my picks is beating the S&P, which is good, but I want perfect. And I should have had perfect, I mean, come on, I used leveraged ETFs for crying out loud.

Some more positive things
The steel ETF has performed excellently, though I view it as a nearly no brainer entry. Its a pure stimulus package play, and if I weren’t so greedy I’d start taking profits here. But since stimulus money hasn’t even made it out of the scam also known as DC, I’m not quite ready to let it go just yet.

The double crude holding did well, but I was also down considerably for quite some time with this one. After trading it for awhile its volatile as all get out, which is great, but all leveraged ETFs eventually fall to zero due to the power of mathematics. I’m not ready to let it go just yet, its still got some room to run, and if we can put together a week of rallies I’ll laugh all the way to the bank.

Less Positive Things
Making money is great, but I want to make more. Again, I’m greedy, that’s the kind of person I am. Anyway, Philip Morris, the silver, triple financials and double treasuries are ticking me off.

Philip Morris is a great name, awesome buy and hold, but other traders aren’t quite with me on this one. The long term money is making its way back to the market, which is great for this stock, but its not happening soon enough. I’ll consider dumping this one on the next earnings release and picking up more for my long term account.

Silver is so-so, its run recently has made me very happy. However, the $14 level is historically tricky and I don’t want to get caught up by a trendline. I’m still holding for the anti-inflation play, but I’ll consider liquidating some at this price. I’m holding a ton of metals right now, especially silver, though in my speculative account. (Oanda.com leverage )

Negative Things
Now the treasuries and financial ETFs can go shove it. I’m a little disappointed in how these two ETFs tracked both of their underlying indices. Though it should be expected in daily leveraged ETFs that you won’t have perfect tracking, and I didn’t, I did expect these two to run nicely. I would have made 10x my returns in the financials ETF had I bought the unleveraged XLF product. That’s annoying as all get out. And though I was right about the treasury bubble debacle, I wasn’t rewarded. End of story.

Ranting and Review
All in all I’m a pretty happy camper, I’ll take my cake and eat it too, but I have certainly learned my lesson with leveraged ETFs. You have to be far too confident to hold a leveraged ETF for any longer than a few days, otherwise you’re holding a knife by the blade. Though they worked out ok, I didn’t lose money, I didn’t beat the general market.

Onward I go. I’m probably going to revamp some holdings soon, probably liquidate some of my leveraged ETFs and keep the rest. I’ll be sure to let you guys know of any updates. I just need to tell myself that maybe leveraged ETFs aren’t the right way to go.

ETF, Investing