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Thursday, August 29, 2013

Portfolio update

The model portfolio has shown some retreat from peaking at 40% returns in May.

The retreat is mainly due to Apple shares surging, reducing gains on the AAPL short position. BAC has been gaining, whilst GOOG has been showing some signs of retreat. The AAPL short position still provides a good hedge for the GOOG long position, though further declines in AAPL are likely to experience less momentum as the entire stock market is held up by quantitative easing.

I would expect September to see a reversal of the AAPL price move (perhaps down to around $450), with a continued surge in gold. GOOG and BAC are likely to remain flat or slightly decline as long term interest rates continue their climb, increasing the discount factor used by financial analysts.