Portfolio Updates

Portfolio Update March 2022 – Rate Hike Liftoff Also Lifting Stocks

Calvin Lo

Thanks to the Fed kicking off rate hikes with a 0.25% increase (only) in its federal funds rate, the markets actually cheered the certainty by going on a buying frenzy for the second half of the month and closing out the quarter on pretty strong positive momentum.

As a result, both the Family and Personal Portfolios benefitted from the optimism, helping to offset some of the losses suffered since the start of the year.

It seems that the market is still highly dependent on the Fed for direction, despite the Russia-Ukraine was causing an initial selling blip.

Inflation is still running hot though, and all eyes are on the Fed on whether they will be more aggressive with rate hikes and potentially start to shrink its balance sheet, a.k.a. tapering.

Personally, I don’t believe the market will decline below its recent lows anytime soon in our current trajectory. However, I’m preparing for a sideways market for the next couple of years due to the rising inflationary environment. All bets are off though if a recession does materialise this year, if the predictions based on the recent yield curve inversion comes through.

In terms of portfolio management, I’ve been doing some research into more passive approaches to investing including ways to automate the investing process, especially for the Family Portfolio. I’m toying with the idea of automating the bulk of the portfolio and just dedicating a small portion to more active and higher risk strategies.

As for the Personal Portfolio, that will remain more speculative and experimental, since those funds aren’t earmarked for retirement or family use.

I’ll be sharing what I find in coming weeks so stay tuned. Subscribe below if you’re interested to be notified whenever I post.

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

Family Portfolio

  • March performance: +6.7% vs SPX +5.6% vs NDX +6.1%
  • YTD performance: -11.9% vs SPX -4.5% vs NDX -8.4%
  • All-time performance (since Aug 2016): +4.9% (+7.2% including dividends)
  • March dividends: S$202 (+159% yoy)
  • Bought: VT, QQQ, ARKK
  • Sold: ABBV, ZM, TDOC, SQQQ, SARK

Finally after so much red, we got a green month even slightly beating the indexes. I believe it’s nothing to do with great stock-picking but more about the portfolio having a higher beta or volatility than the indexes.

When market goes up, the portfolio might go up more but the same applies vice versa when the markets goes down, as we’ve seen seeing since the start of the year until mid-March. That’s why the portfolio is still down pretty substantially YTD.

Currently, the portfolio is pretty heavy in growth names with higher beta. Besides Big Tech stocks, I also have quite a few disruptive innovation a.k.a. ARK Invest style stocks.

Since our lead time to retirement is still pretty long, I’m hoping the increased exposure to growth stocks will allow our portfolio to grow faster in terms of capital appreciation. As we get closer to retirement age, I’ll slowly rotate out of growth into dividend stocks.

As for trades, I’ve taken off the inverse ETFs SQQQ and SARK at a loss as the market rebounded. I had those to act as insurance in the event of rapid escalation in the war and/or a more aggressive than expected Fed. Since neither happened and the market reversed, I didn’t feel the need to have them on anymore.

In the spirit of increasing passivity, I’ve swapped out Zoom (ZM) and Teladoc (TDOC) for ARK Innovation ETF (ARKK) since those 2 stocks are in ARKK’s top holdings anyway. Will depend more on Cathie Wood et al to manage the high growth part of the portfolio. I realised that ARKK and many high growth stocks move in tandem anyway.

Last but not least, I sold AbbVie (ABBV) since it has run up quite substantially (and still continues to after I sold). Healthcare was never within my circle of competence and I’ve had less time to keep up with company developments. I realised that I know very little about the company besides it being a Dividend Aristocrat/Champion/King (can’t remember which one). So with prices high I thought it was an opportune time to exit my position.

As for index funds VT and QQQ, I’ve been looking into ways to automate the monthly DCA investments so hopefully going forward I don’t even have to key in trades for those.

Personal Portfolio

  • March performance: +23.4%
  • YTD performance: +2.7%
  • All-time performance (since July 2020): +58.0%
  • Bought: None
  • Sold: TSLA

Both Tesla (TSLA) and Palantir (PLTR) performing superbly this month, up 25.5% and 13.5% respectively thus the nice green number. Similarly, the gains are mostly only to offset earlier losses.

Not much activity for the stocks side, only selling a single share of Tesla on the way up just to scratch the itch. With the news of the stock split, I think Tesla is pretty undervalued at this point of time. Not saying Tesla is not worth the current stock price, but I just think the price is ahead of fundamentals right now.

Hopefully the stock price will go back lower as it has in the past and I can pick up some shares again.

I was slightly more active in options trading on the side (not captured in the performance calculations). So far I’ve not shared much, since I’m still figuring out how to track and report on options, which are a slightly different ball game from stocks. Spoiler alert, I’m still paying tuition fees on my options trades. 😛

If I do decide to go heavier into options trading, I do intend to share as well once I figure out the best way to present the information.

Social Portfolio

I’ve been experimenting with different trading strategies in this account, but with limited success so far. I’m still figuring out how to set stop loss levels, since majority of my trades seem to end up hitting stop losses early.

I’ve also stopped my copy trade with KoraTrades to free up some capital, so I’m left with jaynemesis.

I’ve closed all other positions to start on a clean slate and only enter into short term trades for the time being.

How did your portfolio perform in March?

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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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