032. My $1 Million Portfolio - May 2024

Welcome to the $1 Million Portfolio update for May 2024! We're sitting at $1.077M since March, which is roughly flat over the past 2 months (yes, I missed April's update!). YTD the portfolio is down 2.32%. All of this is due to my allocation to LT bonds, especially with the leverage and sitting on cash again. I'm still convinced rates are going down this year and convinced that it will be in the latter half of the year. So because I've been essentially priced out of QQQ/TQQQ, I went all in on TMF when it took a bath last week. That's now paying off. But April was a doozy... the portfolio went down maybe 8% for the month? Yeah, it was bad. But so far May is looking to be way better. There is that gambling problem again...
The 2024 $1 Million Portfolio Allocation remains:
35% - QQQ
15% - TQQQ
15% - TLT
10% - TMF
15% - SCHD or O
10% - GLD
Though it may now take me a bit of time to re-balance to this allocation. Life is messy. The overall allocation hasn't changed all that much since last year except that I'm adding a bit of leverage to the Large Cap Growth and Long Term Treasury allocation. It's risky and I'm OK with it. You better think about it if you're going to follow me.
In any case, thanks for stopping by to watch this quick update. I'll see you on the next one!

[@HunterChoquet]

You have to have the most odd portfolio set up I have ever seen lol , holding a triple leveraged with that much of ur portfolio

[@phuocle]

Yes... very weird at the moment for sure. Normally the portfolio is 50% QQQ, 25% TLT, 15% SCHD, and 10% GLD. This year I introduced leverage to the QQQ and TLT position, so it's more like 35% QQQ/15% TQQQ and 15% TLT/10% TMF. But right now it's all out of whack but I'm comfortable holding it, even these triple leveraged positions, so all is good.

[@HelloWorld-hb7yt]

@@phuocle - you haven't made much money from these positions, where do the $1M came from... was it from stocks or just income earnings?

[@phuocle]

@@HelloWorld-hb7yt Stocks over the long term to get the $1M. You really can't look at this in such a short period of time. I highly suggest looking at the asset class allocation over a longer period of time over at Portfolio Visualizer. Put in 50% large cap growth, 25% long term treasury, 15% large cap value or REIT, and 10% gold. Over the long time horizon, it gives good risk adjusted returns. I'd probably switch out QQQ for something like SCHG or VUG in the near future but not yet.

[@HelloWorld-hb7yt]

since 2021, you haven't made money?

[@phuocle]

Basically, yes. My benchmark right now is a 60/40 portfolio as I'm really after risk-adjusted returns at this stage in my life. And that has returned a CAGR of 3.9% since 2021 due to the beating bonds have taken, especially long term bonds. Over the longer time horizon, I expect almost market returns with the risk profile of a 60/40.

[@SurprisedFirzen]

bond investment doesn't make much sense ingeneral imo

[@phuocle]

It depends... the bonds in this portfolio are a specific type... long term bonds. They primarily serve as a diversifier to help re-balance. But they can be great investments in their own right, depending on the time period and in a falling rate environment. Look up "bond convexity" to see how even a small movement in interest rates can cause outsized capital gains.

[@SurprisedFirzen]

@@phuocle bond are shown to underperform equities consistently and by a wide margin. If you are trying for the interest rate play, why not select equities to capture both alpha and beta.

[@phuocle]

@@SurprisedFirzen We may have to disagree on this one. I'm looking for market like returns with less drawdowns. The only proven way to come close to that is to use a bit of bonds and commodities to help bring the risk under control. I'm happy to continue having the conversation but please do me a favor and take a look at the returns you'd get from a 50% LCG, 25% LT bonds, 15% LCV, and 10% Gold portfolio and see how it compares to something like 100% stocks or 80/20 stocks and then we can debate. 🙂