Bethe Portfolio Review: 30 May 2023

Arlington Cemetery

Before getting into the review of the Bethe portfolio the photo above reminds me of when Memorial Day was referred to as Decoration Day.  This was a day to decorate graves, particularly of fallen war soldiers.  Small towns celebrated the day with a parade that included the high school band, decorated bicycles, tractors, fire engines, assorted animals, etc.  The day usually ended with a baseball game.

And now for the Bethe update.  After the end of the second quarter I plan to slowly migrate this growth-income portfolio toward the Sector BPI Plus investing model, assume the sector approach continues to perform as it has over the past six months.

Bethe Security Recommendations

As currently constructed, the Bethe holds a significant percentage of the portfolio in CEFs.  I plan to hold on to these securities until after the second quarter dividends are paid.  Available cash will be used to pick up shares of Energy (VDE) and Real Estate (VNQ), the two sectors currently recommended for purchase.

Bethe Manual Risk Adjustments

As mentioned above, no changes are planned other than to use available cash to purchase a few shares of VDE and VNQ.  When the second quarter dividends show up I’ll check to see if there are any sectors recommended for purchase.

Bethe Performance Data

Since 12/31/2021 the S&P 500 (SPY) and Bethe are essentially equal in performance.  Of all the benchmarks listed, the strongest performance comes from the Dow Jones Industrial Average itself.  I do not have an investable security listed for the DJIA.  Note that the Bethe is besting both the Vanguard Total World Index (VT) and Vanguard’s Total Stock Market Index (VTI).

Bethe Risk Ratios

When it comes to risk involving the Bethe portfolio, we are seeing slippage and that is the primary reason for considering a shift to the Sector BPI model.  Over the last few months the Sortino Ratio moved into negative territory and Jensen’s Alpha is not improving.  For the first time over the past year the Information Ratio moved into negative territory.  All these signals require additional attention of the Bethe.