Portfolio Updates

Portfolio Update April 2022 – One Step Forward, Two Steps Back

Calvin Lo

Just when I thought markets might be recovering after a good month in March, the market reversed to the downside again. Seems like markets might be on this up and down rollercoaster ride for the near future. That said, the overall trend is still down though with the S&P 500 making lower highs and lower lows.

The US Fed has started hiking rates and it’s just a matter of time before they start selling off bonds (quantitative tightening or QT). This time around however if inflation remains persistent, the Fed might not have the option of reversing course and reinstating QE like they did before.

With inflation and rates expected to keep rising, most assets are not expected to do well at least in the short term, including equities, bonds, crypto, and even gold. The only trades left in town seems to be commodities or possibly even value stocks. IMO, it might be worth reserving some cash especially in USD at the ready for deployment in the event the market crashes down to 40-50% from its peak.

What’s for sure is that the era of easy money and quick gains from the stock market is over. Investors have to be extra selective of which assets to own and in what proportions. Asset allocation and diversification will be more important than before. FinTwit is now almost devoid of stonks memes and boasts of multi-baggers.

Since I have a 15-20 year investing horizon, I think the best time to deploy capital might be here as stock prices decline and sentiment is bearish. The time to hold back and conserve cash was when stocks were going to the moon and sentiment was euphoric. The caveat is that either the companies I buy have to be of high quality or I just buy index funds.

On a personal note, we were on vacation latter half of April. Balik kampung to my hometown in Malaysia. We were so excited, we planned our shortly after announcements of Singapore-Malaysia border reopening. As a result, I wasn’t monitoring the portfolio and market movements much. Didn’t have time to write much either.

See my portfolio holdings and strategy on my Portfolio page. I’ve included portfolio pie charts that update in real-time.

Family Portfolio

  • April performance: -10.9% vs SPX -8.8% vs NDX -13.4%
  • YTD performance: -20.7% vs SPX -13.9% vs NDX -22.1%
  • All-time performance (since Aug 2016): -7.7% (-5.6% including dividends)
  • April dividends: S$0 (-100% yoy)
  • Bought: VT, QQQ, ARKK, FB, AAPL
  • Sold: None

This portfolio managed to outperform the Nasdaq at least, but the drop was still painful. The portfolio is back underwater. The problem with accumulating stocks while the market is in a strong bull run is that our cost basis has increased quite a bit.

No sweat though, it’s still early days in our accumulation phase and we still have quite a few years before retirement comes around. If we were closer to retirement though, this decline would’ve really hurt.

I’ve set up my FSMOne account to automatically DCA every month into VT, ARKK and HST. See my previous post on Automating Your Investments with FSMOne. Unfortunately, FSMOne doesn’t offer RSP for QQQ and VNQ, so I might have to find alternatives. Stay tuned.

No dividends this month, since most were paid out in March.

Besides DCA into core ETFs VT, QQQ and ARKK, I’ve also added to Meta (FB) and Apple (AAPL) opportunistically on dips. I believe fears about FB are overblown and the AAPL machine is humming as strong as ever.

I’m seriously considering adding the Vanguard Value Index Fund (VTV) as a long term core holding, since this shift towards normalised interest rates and higher inflation increasingly appears to be structural/permanent. However, I’m hesitant to add yet another core holding especially since I’ve been trying so hard to reduce the number of positions in this portfolio. We’ll see…

Personal Portfolio

  • April performance: -16.6%
  • YTD performance: -14.9%
  • All-time performance (since July 2020): +22.3%
  • Bought: TSLA
  • Sold: None

Tesla (TSLA) was hit by selling over fears of Elon Musk having to liquidate some of his stock to fund his Twitter (TWTR) acquisition.

TSLA was down 19% for the month, so this portfolio was pretty much tracking that. I averaged down on TSLA so the performance appears to be slightly better, but in reality it’s not.

I’m seeing more Tesla cars on Singapore roads recently (maybe also cos I’m looking out for them now). Singapore was late to the EV party but has finally jumped on the bandwagon, introducing more EV-friendly policies and installing more chargers recently.

If TSLA price tanks further, I will consider adding aggressively. My personal price target for TSLA is around $1,500 so I’m ready to add even at $1,000/share. Stock split is coming up too so I’m excited to be able to add in smaller increments and possibly even trade options on TSLA stock.

On a side note, options trading has not gone well. Bought some calls on FB and AMD which will most likely expire worthless. Sigh. If I have extra time, I might look into options wheel strategy which seems like a possible way to profit from a sideways market.

See my investment thesis on TSLA here.

Social Portfolio

Not much to update here. Made 2 commodity-related trades but booked losses on both. Might look into ways to profit from more declines, probably by shorting or with inverse ETFs. Don’t fight the Fed, especially in the short term.

How did your portfolio perform in April?

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Disclaimer: This is not financial advice. I am not professional financial advisor nor do I work in the finance industry. Anything I write here is purely my personal opinion. Please do your own research and due diligence before investing into anything. All investments come with associated risks. Best to consult a financial advisor if you’re still unsure.

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