The month of January was the first real negative month for the market in quite a while. It was also a negative month for the CCIP. The stock market has been pulled down due to uncertainty in foreign markets such as Greece and China, as well as new anti-business rhetoric coming out of Washington. Even a much better than expected GDP number for the 4th quarter could not pull the market out of its current mood. Even with these difficult markets, as well as a number of positions which have been hammered recently, the CCIP was able to outperform the market by 1.44% a similar out performance to December when the CCIP outperformed by 1.67%. Although I cannot be sure, I believe that the asset allocation model I have shifted to in the last few months has helped the portfolio outperform. This has resulted in the CCIP pulling back ahead in comparison to the SPY ETF since inception.
The portfolio continues to beat the market since its inception (by about 5.65%). The chart below presents the monthly performance of the CCIP for January, the green rows designate the months the CCIP outperformed the market. The table also shows the performance of the portfolio since inception.
Portfolio Results
The 2009 Since Inception results are as follows:
1. Since Inception Results
CCIP Absolute Return (March 7 through February 2, 2009) = 63.52%
Benchmark S&P 500 (SPY) Absolute Return (March 7 through February 2, 2009) = 57.87%
The CCIP has outperformed the S&P 500 benchmark by a total of 5.65%
February 2010 Next Steps
The market is getting more and more dicey when it comes to which stocks perform and which do not. The days are over of mindless buying that consistently sends the market higher and higher regardless of the news.
As such, the selection of positions in the CCIP is becoming more difficult, and also more risky in the sense that a bad earnings report, or a loss of a key contract can send a stock down 10-20%. Unfortunately, selling a call on such positions cannot hedge against that type of fall.
I am going to continue to use my asset allocation strategy which I have been utilizing for the past few months, as I have seen a sharp decrease in the volatility of the CCIP vs. SPY, to the tune of about half as much volatility with the same or better returns.
As always, please post any thoughts or questions you have regarding the CCIP and the posts on the blog.
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