[Note: I started the Sleepy Portfolio in 2005 to benchmark my personal portfolio, which was then invested mostly 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 the following asset allocation: 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 the Altamira T-bill Fund.]

The Sleepy Portfolio lost 5.45% of its value in the past 90 days. Falling stock prices were the culprit: Canadian stocks were down 8%, US stocks lost 9%, Europe and Pacific lost 10% and Emerging markets were down 7%. Bond prices rose modestly and REITs stayed roughly the same. The portfolio’s asset allocation is not significantly off target, so there will be no rebalancing just yet. As the cash accumulated through dividends and interest is also not significant enough to deploy into the asset class that is the most below target (US stocks), there will be no new transactions either.

Here’s how the portfolio looked at the end of 2Q-2010:

[Sleepy Portfolio at end of 2Q-2010]

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