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Participant ○○○

Portfolio YTD is down 6.7%

 

Just looked at my port. It's down 6.7% YTD and down 9.4% from its peak. I'm just not feeling the fear. Yet?

With this BEAR our 40/60 port drifted down to 35/65 so on Mar 31 I over-rebalanced to 45/55.

By year's end I want the port to be 50/50. 

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Explorer ○○

Re: Portfolio YTD is down 6.7%

40/60 Wellesley is down -4.99 YTD and -7.8 since Feb 18.

Balanced funds are great for those of us that don't have the discipline to rebalance.

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Participant ○○○

Re: Portfolio YTD is down 6.7%

 

Our port is NOW down 4.4% YTD and down 7.2% from its peak value. And we're 46/54 not 40/60. So we're beating VWINX. Which is VERY HARD to do.

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Frequent Contributor

Re: Portfolio YTD is down 6.7%

At the lowest point, my portfolio was down 29%.  It is now down 15%.  But it is not a vanilla flavored portfolio.  It generates 4%+ yield for me to live on, and has exposure to CEFs, REITs and BDCs to help get the yield.  These 3 amigos got hit hard so will need time to recover.  My goal is not to minimize volatility.  If it were, I would be in all balanced/allocation funds and call it a day.  I want yield, yield, yield to live on without selling anything.  

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Frequent Contributor

Re: Portfolio YTD is down 6.7%

I just looked at Morningstar's calculations for my portfolio.  As of today it is up 1.24% for the last 12 months and averages a +5.95% for the last 3 years.  The only fund that I have that is down is a pure stock fund, American Funds Mutual Fund, which is down 3.52% for the last 12 months.  But that is 8.01% better than its category.

In the last few weeks it was a lot worse and I have no idea what the future will bear so I'm neither selling or buying right now.

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Explorer ○○

Re: Portfolio YTD is down 6.7%


@galeno wrote:

 

Our port is NOW down 4.4% YTD and down 7.2% from its peak value. And we're 46/54 not 40/60. So we're beating VWINX. Which is VERY HARD to do.


As of 4/9 close Wellesley -3.49 YTD , -6.35 since 2/18. Good job, though. 

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Explorer ○

Re: Portfolio YTD is down 6.7%

As of 4/9, down 6.37%, AA= 49/29/22 (stock, bond, cash equivalents (VG MMF & TSP G Fund=stable value 401K type fund). Not unhappy with the AA. Have some 'dry powder' if the market tanks could buy something but I don't HAVE to do anything. Retired since March 80, 70 yrs age. 

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Frequent Contributor

Re: Portfolio YTD is down 6.7%

For the last several years, my portfolio has had a beta to the S&P 500 (the Market) in the range of .3 to .6.  Things changed from Feb 20 (the Market high) to now. 

From the Feb 20 Market high to the Market low on Mar 23, the S&P 500 was down 34% and my portfolio was down 29%.  So my beta to the Market jumped to .85.  

The rebound from Mar 23 to now shows my portfolio riskier than the Market.  The Market has re-bounded to down 16% from the Market high and my portfolio is down 18% from the Market high.  

YTD, the Market is down 12% and my portfolio is down 15.5%.  

While I would have preferred my portfolio remained in the beta range of .3 to .6 but during this crisis it did not.  Not catastrophic.  I hope I can maintain the 4% yield and if not I have backup in several low vol bond OEFs to tap for several years. 

My reasoning for the beta/risk change is that I stretch for yield with most of my 33% in bond OEFs.  And I stretch for yield with 17% in bond CEFs, 12% REITs, 6% BDCs and 3% HQL.  My portfolio yields 4%+ and that is what I live off, without having to sell any shares of anything.  Stretching for yield was OK for a long time but when the "fit hit the shan" my real risk was exposed.  I plan to de-risk my portfolio with some minor tweaks after things get better to soften the ride for next time.  The area I will focus on is my REITs.  I do not need 2 retail REITs.  Will likely swap one for a data center or cell tower/fiber REIT,  Hopefully when this settles out I will return to a .3 to .6 beta range to Market where I am more comfortable and this event will be a one off.  

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Participant ○○○

Re: Portfolio YTD is down 6.7%


@PaulR888 wrote:

For the last several years, my portfolio has had a beta to the S&P 500 (the Market) in the range of .3 to .6.  Things changed from Feb 20 (the Market high) to now. 

From the Feb 20 Market high to the Market low on Mar 23, the S&P 500 was down 34% and my portfolio was down 29%.  So my beta to the Market jumped to .85.  

The rebound from Mar 23 to now shows my portfolio riskier than the Market.  The Market has re-bounded to down 16% from the Market high and my portfolio is down 18% from the Market high.  

YTD, the Market is down 12% and my portfolio is down 15.5%.  

While I would have preferred my portfolio remained in the beta range of .3 to .6 but during this crisis it did not.  Not catastrophic.  I hope I can maintain the 4% yield and if not I have backup in several low vol bond OEFs to tap for several years. 

My reasoning for the beta/risk change is that I stretch for yield with most of my 33% in bond OEFs.  And I stretch for yield with 17% in bond CEFs, 12% REITs, 6% BDCs and 3% HQL.  My portfolio yields 4%+ and that is what I live off, without having to sell any shares of anything.  Stretching for yield was OK for a long time but when the "fit hit the shan" my real risk was exposed.  I plan to de-risk my portfolio with some minor tweaks after things get better to soften the ride for next time.  The area I will focus on is my REITs.  I do not need 2 retail REITs.  Will likely swap one for a data center or cell tower/fiber REIT,  Hopefully when this settles out I will return to a .3 to .6 beta range to Market where I am more comfortable and this event will be a one off.  


Thorough explanation of your strategy Paul. I enjoyed reading it.

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Follower ○○

Re: Portfolio YTD is down 6.7%

Mine is down 11.5  at lowest one, but it is up now

 

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Participant ○○○

Re: Portfolio YTD is down 6.7%


@PaulR888 wrote:

For the last several years, my portfolio has had a beta to the S&P 500 (the Market) in the range of .3 to .6.  Things changed from Feb 20 (the Market high) to now. 

From the Feb 20 Market high to the Market low on Mar 23, the S&P 500 was down 34% and my portfolio was down 29%.  So my beta to the Market jumped to .85.  

The rebound from Mar 23 to now shows my portfolio riskier than the Market.  The Market has re-bounded to down 16% from the Market high and my portfolio is down 18% from the Market high.  

YTD, the Market is down 12% and my portfolio is down 15.5%.  

While I would have preferred my portfolio remained in the beta range of .3 to .6 but during this crisis it did not.  Not catastrophic.  I hope I can maintain the 4% yield and if not I have backup in several low vol bond OEFs to tap for several years. 

My reasoning for the beta/risk change is that I stretch for yield with most of my 33% in bond OEFs.  And I stretch for yield with 17% in bond CEFs, 12% REITs, 6% BDCs and 3% HQL.  My portfolio yields 4%+ and that is what I live off, without having to sell any shares of anything.  Stretching for yield was OK for a long time but when the "fit hit the shan" my real risk was exposed.  I plan to de-risk my portfolio with some minor tweaks after things get better to soften the ride for next time.  The area I will focus on is my REITs.  I do not need 2 retail REITs.  Will likely swap one for a data center or cell tower/fiber REIT,  Hopefully when this settles out I will return to a .3 to .6 beta range to Market where I am more comfortable and this event will be a one off.  


I've ALWAYS been wary of "reaching for yield". The most I've ever reached for yield is 25% of our FI allocation in corporate bonds. The same % as BND. Today we hold corps as 20% of FI. 5% less than BND. The rest of our FI allocation is in Treasuries, TIPS, and CASH.

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Frequent Contributor

Re: Portfolio YTD is down 6.7%


@PaulR888 wrote:

For the last several years, my portfolio has had a beta to the S&P 500 (the Market) in the range of .3 to .6.  Things changed from Feb 20 (the Market high) to now. 

From the Feb 20 Market high to the Market low on Mar 23, the S&P 500 was down 34% and my portfolio was down 29%.  So my beta to the Market jumped to .85.  

The rebound from Mar 23 to now shows my portfolio riskier than the Market.  The Market has re-bounded to down 16% from the Market high and my portfolio is down 18% from the Market high.  

YTD, the Market is down 12% and my portfolio is down 15.5%.  

While I would have preferred my portfolio remained in the beta range of .3 to .6 but during this crisis it did not.  Not catastrophic.  I hope I can maintain the 4% yield and if not I have backup in several low vol bond OEFs to tap for several years. 

My reasoning for the beta/risk change is that I stretch for yield with most of my 33% in bond OEFs.  And I stretch for yield with 17% in bond CEFs, 12% REITs, 6% BDCs and 3% HQL.  My portfolio yields 4%+ and that is what I live off, without having to sell any shares of anything.  Stretching for yield was OK for a long time but when the "fit hit the shan" my real risk was exposed.  I plan to de-risk my portfolio with some minor tweaks after things get better to soften the ride for next time.  The area I will focus on is my REITs.  I do not need 2 retail REITs.  Will likely swap one for a data center or cell tower/fiber REIT,  Hopefully when this settles out I will return to a .3 to .6 beta range to Market where I am more comfortable and this event will be a one off.  


From the Feb 20 Market high to the Market low on Mar 23, the S&P 500 was down 34% and my portfolio was down 29%.  So my beta to the Market jumped to .85.  

YTD, the Market is down 12% and my portfolio is down 15.5%.  

I have to keep this one and frame it. Per YTD your 50/50 actually lost more than the market and should be a learning case for risk/volatility.

As usual, lots of explanations and moving parts but the reality is different.  

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Frequent Contributor

Re: Portfolio YTD is down 6.7%


@FD1001 wrote:

 

I have to keep this one and frame it. Per YTD your 50/50 actually lost more than the market and should be a learning case for risk/volatility.

As usual, lots of explanations and moving parts but the reality is different.  

 

Paul:  The learning for me was that my portfolio worked fine for my first 7 years in retirement until COVID-19 which exposed the fact that my 50:50 can behave like much higher risk due to my tilt for yield in bond CEFs, REITs and BDCs when those get hammered.  That's OK with me, not catastrophic results because I kept allocations reasonable.  The bond CEFs will recover.  I fixed my BDC issue today.  And last issue to fix will be my REITs but I need some more time for that.  This have been a good stress test for my portfolio and it survived.  I learned where its weaknesses are and what and how I can improve.  Bottom line I have a plan I am comfortable and happy with and I believe will generally work well for me.  I prepared myself for a 40% Worst Drawdown and so far never got to worst case.  But I think that is important for a Buy and Holder to prepare one's psyche for.  Btw, DFA data show in 2018 a worlwide diversified 100% stock portfolio lost 11.8%, a 40:60 worldwide diversified portfolio lost 4.3% and the S&P 500 lost 4.4%.  Those were unusual results in 2018 and COVID-19 has also caused unusual results.  

BY THE WAY FD, BUT WHEN WILL YOU POST YOUR PROPOSAL THAT A BUY AND HOLDER CAN EVALUATE FOR LONG TERM?   ALL I KNOW IS THE TRIFECTA BOND PORTFOLIO YOU SUGGESTED FOR SUCH, I.E., "BUY AND GO TO SLEEP" WERE YOUR WORDS AND THEY ALL LOST ABOUT 13% OR SO IN THE CRASH.  YOU CONVENIENTLY AVOID THIS QUESTION LIKE YOU CONVENIENTLY SAY YOU ALWAYS EXIT BEFORE THE BAD PERFORMANCE ARRIVES.  STILL WAITING ...  TIC .. TIC ... TIC

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Frequent Contributor

Re: Portfolio YTD is down 6.7%


@galeno wrote:

Our port is NOW down 4.4% YTD and down 7.2% from its peak value. And we're 46/54 not 40/60. So we're beating VWINX. Which is VERY HARD to do.

That's great @galeno! How was your performance last year or three years trailing? I'm not a party pooper just commenting that not everyone is playing the same game. More risk = better performance sometimes, and more loss sometimes. Finding the balance within personal risk tolerance is the art of investing in my opinion. Wishing you continued good luck.


 

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Re: Portfolio YTD is down 6.7%


@PaulR888 wrote:

@FD1001 wrote:

 

I have to keep this one and frame it. Per YTD your 50/50 actually lost more than the market and should be a learning case for risk/volatility.

As usual, lots of explanations and moving parts but the reality is different.  

 

Paul:  The learning for me was that my portfolio worked fine for my first 7 years in retirement until COVID-19 which exposed the fact that my 50:50 can behave like much higher risk due to my tilt for yield in bond CEFs, REITs and BDCs when those get hammered.  That's OK with me, not catastrophic results because I kept allocations reasonable.  The bond CEFs will recover.  I fixed my BDC issue today.  And last issue to fix will be my REITs but I need some more time for that.  This have been a good stress test for my portfolio and it survived.  I learned where its weaknesses are and what and how I can improve.  Bottom line I have a plan I am comfortable and happy with and I believe will generally work well for me.  I prepared myself for a 40% Worst Drawdown and so far never got to worst case.  But I think that is important for a Buy and Holder to prepare one's psyche for.  Btw, DFA data show in 2018 a worlwide diversified 100% stock portfolio lost 11.8%, a 40:60 worldwide diversified portfolio lost 4.3% and the S&P 500 lost 4.4%.  Those were unusual results in 2018 and COVID-19 has also caused unusual results.  


 


It's amazing how you give yourself a pass and looking for excuses no matter the results. How does it work generally well, when your 50/50 lost more than stocks?

Your diversification failed because it wasn't one and buy and hold isn't a guarantee when you hold the wrong stuff.

I'm amazed by your knowledge of REITS, BDC, CEFs

You absolutely need a financial adviser.

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Re: Portfolio YTD is down 6.7%


@FD1001 wrote:
It's amazing how you give yourself a pass and looking for excuses no matter the results. How does it work generally well, when your 50/50 lost more than stocks?

Your diversification failed because it wasn't one and buy and hold isn't a guarantee when you hold the wrong stuff.

I'm amazed by your knowledge of REITS, BDC, CEFs

You absolutely need a financial adviser.

 

Paul:  Are you really as dense as the words you type imply?  Diversification does not guarantee one will always beat the S&P 500.  Go back to what I said about 2018.  If one does not like REITs, BDCs or CEFs there are other ways to find yield.  Preferreds, Utilities, MLPs .. One has to pick their poison.  There is no free lunch when it comes to yield.  But getting sufficient yield seems to me the easiest and safest way for me to pay my bills and hopefully not run out of money by eliminating or reducing sells.  What I lose in Bucket 3 stocks is immaterial to me today because I give that Bucket 10 years to perform and my portfolio supports at least that amount of time.  I have 4%+ income coming in and lots of backup up bond OEFs to tap in case the dividends are cut.  You are good at highlighting what I say and criticize.  What do you offer besides bond funds?  Your 3 bond fund portfolio you said one could go to sleep with STUNK.  Why don't you frame them and criticize them?  You are the one that needs a financial advisor.  If I were you, I would be scared crapless to be retired with no plan but uncanny luck and/or lies. 

By the way, that chart you posted about how to beat the market by avoiding the bad days was really stupid.  How do you do that?  As I said, the good days are mixed in with the bad days in an unpredictable way that no market timer can do what you say with any degree of consistency.  Go back an review the Dalbar study.  Tomorrow looks to be a good day based on futures market so anyone out of the market will miss out.  Got it?


 

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Frequent Contributor

Re: Portfolio YTD is down 6.7%

  • 4/17/2020, my portfolio has returned -0.67% YTD.
  • The S&P 500 has returned -14.87% 

My target allocation is 80% "bonds" and 20% stocks but the stock allocation does swing between 15% and 25%. I also rebalance. My allocation is a bit less than 15% right now because my spouse decided to retire and her retirement plan is 100% "cash" while waiting for the rollover to process.

A significant part of my "bond" portfolio is laddered which helps eliminate sequence of return risk because distributions are taken from rungs that mature at PAR and face value is returned.

 Paul, I enjoy reading your posts. No need to explain yourself to someone who only wants to argue. Jumping into and out of bond OEF's to avoid some perceived capital loss is not my cup of tea either. It is better to hold a diversified portfolio, and in my case, rebalance.

Thank you,

Holiday

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Frequent Contributor

Re: Portfolio YTD is down 6.7%

Paul, several facts.  When stocks were down 34% your 50/50 portfolio was down 29%. A classic 50/50 SPY/BND was down about 17-18%.  Later your portfolio did worse than stocks.  My portfolio was UP several % all that time, I guess timing the market does work for some, the evidence is (here). BTW, Dick who invests mainly in CEFs was also in a very high % in cash and did it in the past too.

But, there is a more serious question, what will happen to your portfolio if markets will start going down again, will your portfolio do better this time?

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Re: Portfolio YTD is down 6.7%


@FD1001 wrote:

Paul, several facts.  When stocks were down 34% your 50/50 portfolio was down 29%. A classic 50/50 SPY/BND was down about 17-18%.  Later your portfolio did worse than stocks.  My portfolio was UP several % all that time, I guess timing the market does work for some, the evidence is (here). BTW, Dick who invests mainly in CEFs was also in a very high % in cash and did it in %%the past too.

But, there is a more serious question, what will happen to your portfolio if markets will start going down again, will your portfolio do better this time?


Paul:  Nope you still don't get it and I am giving up with you (See my final sentence below).  Admittedly, I do not have a classic 50:50.  If I wanted one, I would just buy VWINX and call it a day. (By the way, why don't you just annuitize everything and call it a day?)  I want yield, yield, yield to pay my bills without having to sell anything which adds more risk to a paper 50:50 and gets hammered when the fit hits the shan like now.  Just a fact of life.  But this too shall pass.  I don't care if your porfolio is up all the time.  You have/had mostly cash.  You are losing when you factor in inflation.  You do not have a portfolio or a plan that interests me at all.  And when you picked your fantastic 3 funds they all sucked, not just one or two, but all of them.  And you mention Dick, he posted a month or so on Fidelity forum that yes he was 96% cash but he had casualties along the way and said he was down 18% YTD because of some hiccups which always seem to happen even to someone as smart as him.  Nobody can consistently do what Dick or you aim to do.  (See Dalbar study again.)   And finally, as I said, I am mentally prepared for my portfolio with higher effective risk to have a Worst Drawdown of 40%.  In that hopefully unlikely event, I hope I still have a big chunk of dividends still coming in and if not I have Bucket 1 to tap for 8 years or so to hold me over.  Do you think my portfolio will recover in 8 years?  I am more long term and more willing to spend my 4%+ yield and judge my portfolio (with 50% stocks) results over a 10 year horizon.  You are very short term and don't ever want to lose more than a nickel and willing to hold huge cash at times which generates no income to pay bills and does not help portfolio grow. This is my last post on this.  

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Participant ○○○

Re: Portfolio YTD is down 6.7%

 

The animosity on this thread seems to come from disagreements on which market timing system is best and the best ways to reach for yield.

Personally I avoid any investment strategies with market timing or reaching for yield. Usually they are too intense, complicated, and costly. They also seem to blow up badly when there is any type of crisis.

But I am also guilty. When the market drops hard my greed glands go into overdrive. We all sin.

I've done market timing THREE times since I became a Boglehead in 2006. When I over-rebalanced from 60/40 to 70/30 in 2009 and then back to 60/40 in 2011. The third time was when I over rebalanced from 40/60 to 45/55 on March 31st. I'm thinking of over-rebalance in January to 50/50. That would be the FOURTH time.

As far as reaching for yield I do that too. But on a smaller scale than does the standard TBM fund (e.g. BND) and a much smaller scale vs the investors on the bond board. For the last 3 years we held 25% of our FI allocation in corp bonds. Now it's 20%. The rest is always in treasuries, TIPS, and cash.

Here's our results from Jan 1, 2016 to YTD

xxxxxxPortxxxVTIxxxxxxVTxxxxVWELXxVWINXxxCPI

CAGR 02.98% 05.19% 05.75% 04.83% 03.80% 01.65%
GSDx 09.21% 18.51% 20.15% 13.09% 08.54% 00.85%

Note: CAGR is NET of CPI.

 

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