ANALYSIS AND COMMENTARY
The market situation in July has been a rollercoaster ride. The first three weeks couldn't be better -- when Dow Jones index set its all-time high on the July 19th, my portfolio is up my $15,000 compared to June close. However, in a matter of days, my finance-stock-intensive portfolio suffered a $30,000 hemorrhage with the general market collapse.
My employee stock account is not immune either. An appreciation of $16,000 by the middle of the month is only followed by a $20,000 dive. So all combined, my portfolio is $50,000 under by July 31st compared to the intra-month high it once fetched. Alas, the volatility of managing a portfolio of one's own money in the market of this volatility is not for the faint heart.
On the brighter side, my portfolio still outperformed the benchmarks in this chopping journey. Actually, for the first time, my accumulated performance has exceeded my 50-35-15 benchmark. If you recall that I have never been fully invested as the benchmark portfolio most of the time, the outperformance should really be celebrated.
I started a new position this month. The purchase of Western Union is based on the belief that the business will benefit from the globalization and a price of 15x Free Cash Flow is a good price for a dominant player in a growth industry.
Looking ahead, the uncertainty of the market will obviously sustain for a while. However, even with the 10% cut of most of my finance stock holding, I do feel the fundamentals of my domestic positions are strong, and the impact of the credit market tightening is over-estimated. I'm ready to examine opportunities and commit more funds to the game if necessary.
My foreign equity funds have been performing extremely well compared with benchmark of EFA. Since my allocation is close to the desirable percentages, I will not make major purchases in the coming months.