Chicken Little Portfolio Performance June 2016

In June 2016, the Chicken Little Portfolio gained 4.05% while the Dow Jones Industrial Average gained 1.00%.
Central Banks Print Money at Historic Pace

June 2016 performance

June 20162016 YTDSince Inception (3/31/2015)
Chicken Little4.05%6.21%3.57%
Dow Jones Industrials1.00%4.17%3.89%

The big movers in May were the safe-havens of gold and long-term US Treasury bonds; this continues the trends from earlier in the year.  

In fact, almost every asset class has gone up in price so far this year. The fact that the biggest winners are gold and Treasuries, leads me to believe that Central Bank printing of money is pumping up all asset prices. Click to read my recent PBS article on Central Bank money printing

To be concrete, emerging market stocks have returned 7.57% this year. This could be because these economies are prospering, or it could be because of loose money policies of global central banks. Because all asset prices are going up, I interpret the emerging market equity performance as coming from printing money. If the world's economies were strong, we would expect interest rates to rise, and long-term US Treasury prices to fall. 

The Chicken Little portfolio gained 4.05% in May. This was a great month; driven entirely by strong gains in Treasury bonds.

AssetSymbolJune 2016YTD 2016
Dow Jones IndustrialsDIA1.00%4.17%
Non-US StocksEFA-2.39%-2.95%
Emerging Market StocksEEM4.52%7.57%
US Long-Term Treasury BondsTLT6.92%16.26%

July 2016 portfolio positions

As of July 1, 2016 the Chicken Little Portfolio remains ready for a global, deflationary depression. Chicken Little is heavily invested in US Treasuries, and fractionally short US and international stocks. There were no big changes in the Chicken Little portfolio during June 2016. 

Future posts will explain two small changes in the portfolio. First, Chicken Little sold some 30-year Treasury bonds. Second, Chicken Little become slightly more negative on non-US stocks.

Previous month's report                           Subsequent Month's report


  1. It seems that as interest rates on bonds rise the bonds would become valuable and, hence, more expensive. What am I misunderstanding ?

    1. Thank you for your comment. Higher interest rates are great for people about to buy a bond.

      Would you prefer to buy a 10 year treasury yielding

      7% -- about the post WWII average


      1.4% -- current yield under Greenspan/Bernanke/Yellen financial repression.

      high rates are great for new bond buyers.

      However, one you have purchased your bond, the current price of the bond goes down if interest rates rise.