I started the Sleepy Portfolio in 2005 to benchmark my personal portfolio, the bulk of which was then invested in individual stocks. The portfolio started off with an initial cash infusion of $100,000 but no new money has been added since. The portfolio has a target allocation of 5% cash, 15% short bonds, 5% real return bonds, 20% Canadian stocks, 22.5% US stocks, 22.5% Europe and Pacific, 5% Emerging markets and 5% REITs. The entire portfolio (apart from the cash portion) is invested in broad-market, exchange-traded funds (ETFs) trading in the Canadian and US stock exchanges. The cash portion is invested in a high-interest savings account that is available through many discount brokers.

The market value of the Sleepy Portfolio remains more or less unchanged since my previous report. As of July 1, 2011, the Sleepy Portfolio is valued at $136,263, a slight loss of 0.62% in the second quarter of 2011. The Portfolio would have lost much more but for the significant rally in the stock markets in the last week of June. The asset class that gained the most during the quarter was real return bonds. The biggest losers were Canadian stocks (down 6.5%) and emerging markets (down 3.0%). Surprisingly, given all the economic troubles in Europe, EAFE stocks actually gained 1% during the quarter. Other asset classes remained more or less flat during the quarter.

Here’s how the portfolio looked as of July 1, 2011:

[Sleepy Portfolio Snapshot as of July 1, 2011]

If the Sleepy Portfolio had a higher value, it would make sense to rebalance by selling REITs and Real Return Bonds and buying US and EAFE stocks. But here it is not economical to trim REITs by 1.3%, which works out to just $112. Therefore, we won’t be making any transactions in the portfolio. The only activities in the portfolio during the quarter were the dividend payments from the component ETFs, which totalled $632.

This article has 3 comments

  1. @CC: You would have done better if you had been 100% in gold — leveraged, of course.

  2. Or if you shorted a leveraged bear gold ETN.

  3. @Canadian Couch Potato, @Preet: Or shorted Sino-Forest (TRE) or Yellow Media (YLO) or Research in Motion (RIM). What kind of a return is -0.62% over 3 months? I tell you, passive investing sucks!