Rebalancing the portfolio

Unfortunately, the word rebalancing has developed ugly connotations as it is often associated with automation, but at 2CHYP we like to do things a bit differently.  Rather than rebalancing at a certain time interval or when positions reach a certain size, we let opportunity dictate rebalancing.

Armada Hoffler (AHH) has recovered and while it remains a good stock in my opinion it is not quite good enough to warrant a 10% weight.  During AHH’s substantial price recovery, Spirit Realty (SRC) performed poorly in the market causing it to become relatively more opportunistic.  As the reward to risk ratio between the 2 stocks became more balanced, we bought SRC and sold AHH to make their weights roughly equal.

Also on the trimming block was New Senior Investment (SNR).  This was a stock we bought strictly for its deep value and huge yield.  While some value remains, the 10%+ move to the upside means there is less value and lower yield than when we bought it.  Trimming it provides us the opportunity to rebuy SNR if its price dips back down, while still capturing the gains of its move.

Commentary may contain forward looking statements which are by definition uncertain.  We retain no obligation to update or correct forward looking statements should the available information change.  Actual results may differ materially from our forecasts or estimations.

2CHYP Portfolio Snap Shot

4/20/17 2CHYP Performance since inception

2CHYP Weekly Trade Confirmation Report