May 2018, Chicken Little Portfolio Performance

"It's not the money I will miss, it is the things" 
-- Private Judy Benjamin 

The 'Wealth Effect' is the money people spend when they become wealthier, often because of rising stock & housing prices. Will people continue to spend if assets do not rally in 2018? 

2018 may not have a positive wealth effect

May 2018 performance

In May 2018, the Chicken Little Portfolio gained 0.86% while the Dow Jones Industrial Average gained 1.37%. 

May 2018YTD 2018
Chicken Little0.86%-1.75%
Dow Jones Industrials1.37%-0.46%

So far, 2018 has been challenging for investors as all broad asset classes have struggled. As of the end of May, all major asset classes followed by Chicken Little have negative returns. 

This leads to the question of what will happen to consumer spending if people do not have a positive wealth effect. In recent years, every asset has gone up almost every day (see "free money" post).  The economy might stall without rising asset prices. 

AssetSymbolMay 2018YTD 2018
Dow Jones IndustrialsDIA1.37%-0.46%
Non-US StocksEFA-1.89%-1.29%
Emerging Market StocksEEM-2.62%-3.03%
US Long-Term BondsTLT2.20%-3.66%

June 2018 portfolio positions

Chicken Little is prepared for a deflationary depression by being long US Treasuries with a good amount of cash. No trades this month -- the portfolio has more 'cash' because a Treasury bond has moved closer to maturity. Chicken Little retains a modest short position in gold. 

Previous month's report                           Subsequent Month's report

Chicken LittleDow Jones Industrials
2018 (through May)-1.75%-0.46%
2015 (April through Dec)-2.49%-0.27%
since inception (3/31/15)-1.75%47.18%

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