June 2022, Chicken Little Portfolio Performance

Stocks, bonds, gold, and crypto all fell in the first half of 2022. Is it time to buy? No, for two reasons. First, real interest rates remain negative. Second, and relatedly, the Fed has not begun to sell bonds. The Fed is scheduled to sell about $1 Trillion a year until they blink after they have further ruined the economy. I continue to suggest people sell some portion of their risky assets (see post: sell now). 

The Fed has e-printed $9 trillion. 

June 2022 performance
The Dow Jones Industrial Average lost 6.52% in June 2022 while the Chicken Little portfolio gained 0.74%. Year to date, Chicken Little has lost 0.54%, while the Dow has lost 14.42%

June 2022YTD 2022
Chicken Little0.74%-0.54%
Dow Jones Industrials-6.52%-14.42%

June 2022 was a sea of red with with all major asset classes losing ground. Stock markets around the world lost between five and ten percent in the month. The 'safety' trades of long-term US treasuries and gold lost about 1.5%. Bitcoin lost 36% (in one month!) bringing its total loss in the year to 57%.  That's a crypto crash. 

AssetSymbolJune 2022YTD 2022
Dow Jones IndustrialsDIA-6.52%-14.42%
Non-US StocksEFA-8.60%-18.67%
Emerging Market StocksEEM-5.11%-17.17%
US Long-Term BondsTLT-1.46%-21.97%

July 2022 portfolio position
The Chicken Little Portfolio remains prepared for financial disaster. The portfolio owns no stocks, almost no bonds, and has a short position in stocks. 

There were two trades in June. 

First, increased the size of the short stock position. 'Buy the dip' has worked for decades, perhaps even centuries if you could hold on during the Depression of the 1930s. I continue to believe that buy the dip will end in disaster.  

Second, modestly increased the long US Treasury Long-Term bond position. The portfolio is still very underweight Long-Term bonds. If real interest rates could get up to 3-4%, the portfolio would move toward 50% Treasuries. 

The portfolio's only risky asset remains the underweight position in long-term US Government bonds with protection in the form of being short stocks

July 5, 2022, Dow: 31,000  

Chicken LittleDow Jones Industrials
2022 (through June)-0.54%-14.42%
2015 (April through Dec)-2.49%-0.27%
since inception (3/31/15)24.72%100.74%


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