Portfolio Overview: Too Much Cash

THE ENLIGHTENED-AMERICAN PORTFOLIO SPREADSHEET

  • Enlightened-American Portfolio: +10.0% through Dec 1, 2010 (my actual IRR, including cash balance)
  • DJIA: +7.9%
  • Nasdaq: +12.4%
  • S&P 500: +8.2%
  • DJ Wilshire 5000: +10.7%
  • Russell 2000 (smallcap): +17.2%

After holding copious amounts of cash for nearly two years, our under-invested position is finally catching up with us. The markets’ blasting above 11,000 resulted in several of the specialized indices outpacing our portfolio though we are still besting the Dow Jones Industrial and S&P 500.

With the exception of a few minor hiccups (getting optioned out of ROCK being the most recent — that stock is now up 7% from the option price), I do not regret the conservative approach employed. Barring a spectacular year-end market melt-up (quite possible), I have delivered better returns than the broad market while protecting capital via a 30-40% cash hoard. I am proud of this accomplishment. The fact that the market did not crash this year does not mean risk did not exist. Positive outcomes do not preclude existence of the risk taken to achieve that outcome. Put another way, if you choose to drive home drunk and arrive safely, does that make your actions not risky?

I do not expect much excitement from the rest of the year as markets tend to drift up during the holiday season. If this year holds suit, cheers to all the investors out there — we made it through another year with capital intact and slowly growing.

More on this topic (What's this?)
Dow Dogs Are Front Of The Pack
Glassman Strikes Back
Read more on Dow Jones Industrial Average (DJI) at Wikinvest

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