Monday, May 28, 2012

Long Short Portfolio Review

Over the weekend, I did an evaluation of the long short portfolio.   Since May 2, 2012, the S&P has declined 6.0%.   During the same time, my long short portfolio has declined 2.3%, which seems good initially.   However, when I reviewed the portfolio change by long positions and short positions, I was disappointed.  The longs had fallen by 1.0% and the shorts  also had a negative return of 1.3% despite the overall market decline.  Two shorts have risen signficantly  in price during the market decline, which resulted in an overall negative return for the short positions. 

I would have been better off just investing in stocks of strong, resilient companies versus also shorting companies I believed are doing poorly.  

For now, I will continue my long short positions for at least another week.   If I continue to experience poor results from the short positions, I will close the positions and only continue working on the long side for the portfolio.
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This is not financial or investing advice. Please consult a professional advisor.

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