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Portfolio Performance update for first half 2022

Portfolio Performance for 1st Half 2022

The information below is purely educational and not financial advise. 


PortfolioSP50060/40
YTD-7.5%-20.6%-17.1%

2022 Performance

Portfolio Composition

As much as I would love my portfolio to be completely rule based and algorithmic, I'm still refining a lot of processes and the environment appeared to have some unique features, but in general I would describe the holdings for the first half of 2022 as the following:

    Part 1: long exposure to equities with built in crash hedges (also 0 Bonds)

    Part 2: opportunistic short volatility trades

The unique features starting at the beginning of the year were:    

  • VIX levels getting close to 30 in January
  • 10 plus year bull market in US stocks (SP 500 - basically straight up since Financial Crisis)
  • Interest Rates being so low for so long
  • Inflation fears

Approach for my portfolio, I'm long term bullish (I'm very optimistic technology unlocking more value and productivity), but current price levels just seem so high.  It is almost impossible to time to the market so I kept a reasonable size of my portfolio long, but used options to structure crash protection hedges while maintaining most of the upside.  To do this cash efficiently I used SP 500 and Nasdaq 100 options, futures and options on index products.

Instead of buying bonds, I opportunistically shorted options in a neutral manner across commodities (gld, uso, crude options, bito), equity etfs, bond etfs, and some single names

Portfolio Going Forward

I plan to keep the composition mostly the same, but create more process around both major pieces.  The first being the equity exposure with crash protection and the second the approach to opportunistically selling options.  Some ideas include sizing, and based on comfort, type of structure (for example I'm comfortable selling naked options in SP 500 if the size is small, but for single names and commodities like oil, I'm still not comfortable with naked options.




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