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Participant ○○○

Re: Portfolio YTD is down 6.7%

I don't think it is animosity..just an exchange of viewpoints - one poster market-hops using TA while the other has a philosophy of a stable portfolio allocation. Let us wish all of us success.

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Frequent Contributor

Re: Portfolio YTD is down 6.7%

As with so many things, it isn't so much WHAT you say, but HOW you say it.  Tone often overshadows content, and that is especially true when you don't have access to physical cues and are remote and anonymous.  If your intent is to be helpful or persuasive, you don't want your tone to be off-putting.  I personally see no advantage in some of the content here; neither helpful, persuasive, or, most assuredly, benign.  Otoh, I often see poor logic, nastiness, argumentativeness, insults, and bickering.  Nothing worthwhile is accomplished by engaging in such; imo, of course.

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Frequent Contributor

Re: Portfolio YTD is down 6.7%

One of the most important lessons I've learned as a DIY investor over the last 7 years since I retired and reinforced lately is "know your portfolio".  Is the portfolio risk (asset allocation) and performance during the market correction tolerable to you?  It is also important to mentally accept and prepare yourself for possible Worst Case Drawdown based upon historical DFA data (see link below) from Paul Merriman website which shows results of varying stock:bond allocations of a globally diversified portfolio (70% US/30% Int'l).  For me, as an example, I am willing to accept another further 20% to 25% drop from where my portfolio is today.  If I were not able to accept that, I would immediately know my portfolio is too risky.  Even with this additional downdraft, I hope to retain much of the income yield generated by my portfolio, and if I have shortfall, I have bond OEFs I can sell (this is also extremely important as some people don't have bond OEFs so they should have some other low volatility funds to be able to sell or tap to help pay bills) and fill in any gaps of income for several years, estimating up to 8 years or so, to buy me time to let my risky investments recover.  The good news for me is I am seeing my daily portfolio beta to the S&P 500 returning to more normal behavior pre-COVID-19.  Today my portfolio was only down .42 of what the S&P was.  I hope someone finds this useful and helpful.  

link

WARNING TO FD:  DO NOT RESPOND TO MY ABOVE POST.  I HAVE HAD MORE THAN ENOUGH OF YOU AND YOUR ATTACKS ON ME.  I HAVE NEVER REPORTED ANYONE TO MORNINGSTAR AND YOU WILL BE THE FIRST.  THANK YOU.  

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Participant ○○○

Re: Portfolio YTD is down 6.7%

Bogleheads are fond of saying "there are many roads to Babylon".

I would NEVER buy any NON investment grade bonds. And the only acceptable "hedging" for me would be back to USD if I ever decide to buy and hold non-USD denominated bonds. 

That said I'm fascinated with the idea of Bond CSF investing. And I love to read about our market timers.

 

 

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Frequent Contributor

Re: Portfolio YTD is down 6.7%


@galeno wrote:

 

<snip>

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.

 


Hi Galeno,

I am not sure what I am looking at in your table, but it inspired me to check the CAGR of my Fidelity Accounts since 1/1/2016. My 5-year CAGR of 11.03% does not include CPI, deposits, or withdrawals. I used this calculation for today's balance:

(4/22/2020 gross balance - all cash deposits) + Withdrawals = Adjusted 4/22/2020 balance.

Is that how you calculated it?

Incidentally, I began transitioning to my 20/80 portfolio from 50/50 in 2016 in preparation for retirement. Also, what is "Bond CSF" investing? I am not sure that I know that term.

Thank you,

Holiday

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Participant ○○○

Re: Portfolio YTD is down 6.7%

I meant CEF investing. 

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Frequent Contributor

Re: Portfolio YTD is down 6.7%


@galeno wrote:

I meant CEF investing.


Hi Galeno, 

Typo, got it! Now it makes sense. I don't want to hold much leverage right now either. That is for folks with steadier hands.

Thank you,

Holiday

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Frequent Contributor

Re: Portfolio YTD is down 6.7%

Portfolio Checkup

As of COB Friday, and excluding what looks to be 1% pop my portfolio increase of 1.08% today, my YTD performance is -7.6%, -6.6% including today.  

High level AA is within tolerance of my targets.  Within equities, my Developed Int'l is overweight and REITs are underweight, but I am not going rebalance.  

Bond OEFs 32%

Bond CEFs 15.5%

Equities 46.5%

Gold/PM/Commodities 6%

Portfolio continues to yield 4%+, more than covering my annual gap expenses so not needing to sell any shares.  

Action:  Just monitor/evaluate and continue to collect distributions.  Work on golf game.  I think I finally learned what is meant by and how to achieve an inside out golf swing.  Finally, after 50 years of trying.  

 

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Participant ○○○

Re: Portfolio YTD is down 6.7%

The below is an aggressive AA. At least 68% "equities" assuming the bonds in the 32% bond OEFs are US Treasuries or TIPS.

 

Bond OEFs 32%

Bond CEFs 15.5%

Equities 46.5%

Gold/PM/Commodities 6%

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Frequent Contributor

Re: Portfolio YTD is down 6.7%

Hi Galeno ...  Let me explain a little.  For last 7 years my daily portfolio beta to the S&P 500 was relatively tightly range bound between .3 and .6.  Corona comes and all hell breaks loose.  Portfolio is now healing and getting back to above range,  Bear in mind with the 4%+ portfolio yield and ample bond OEFs (Bucket 1) I can tap for cash if I have to, I should have sufficient liquidity to get me by at least 10 years of gap expenses.  

My bond CEFs (Bucket 2) are volatile.  But with 10 years of coverage in Bucket 1, I can afford to invest in bond CEFs which based on historicals should outperform my bond OEFs over a time frame of 3yr to 5yr.  And historically, I have seen bond CEFs to be rather recovery elastic, meaning what they lose in one year (as bad as it may be) has recovered in the next year.  So while bond CEFs have volatility like equities, the rebound historically has been quicker.  Risky?  Absolutely.  But I have time to let them recover.  

My equities are of course risky.  But having the 10 years coverage in Bucket 1, I have time to let them recover.  

Gold and commodities are inflation and uncertainty hedge, hard assets generally uncorrelated to bonds and equities and should be helped by weaker USD.  

Risky?  Absolutely.  Investing is risky.  But with good portfolio yield and a Bucket 1 I can monitor and maintain as a backstop, I am comfortable with the risk.  Did Corona results surprise me?  Absolutely.  I had never seen that happen to my portfolio in 7 years.  But I think my buckets plan is sound.  I am buying my most precious asset, time, with Bucket 1 to get me by the rocky roads that may come up.  

Thanks for the comment.  I view the purpose of this thread is to share our portfolio construction and results so others can compare and contrast.  And if any questions like you have, people can raise with respect.  I appreciate that.  But its only a matter of time before you know who crashes in and throws his darts with big ego and disrespect.  Tick, tick, tick .....

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Re: Portfolio YTD is down 6.7%


@PaulR888 wrote:

Within equities, my Developed Int'l is overweight and REITs are underweight, but I am not going rebalance.  


Just curious @PaulR888, what % of equities is REITs? I was toying with the idea of RE, but when I looked at VNQ a few days ago, to my surprise I observed that it has rebounded very strongly from the March low (gained > 50%!). I didn't think RE would rebound so strongly. There is a solid block of conventional wisdom that thinks "work from home" will be a permanent change in the corporate landscape. So I've put that idea on the back burner.

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Participant ○○○

Re: Portfolio YTD is down 6.7%

This is one CRAZY ride! Hang on tight everyone! 

Our port has been flirting with peak value since Friday. Like it doesn't want to go there.

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Frequent Contributor

Re: Portfolio YTD is down 6.7%


@chang wrote:

@PaulR888 wrote:

Within equities, my Developed Int'l is overweight and REITs are underweight, but I am not going rebalance.  


Just curious @PaulR888, what % of equities is REITs? I was toying with the idea of RE, but when I looked at VNQ a few days ago, to my surprise I observed that it has rebounded very strongly from the March low (gained > 50%!). I didn't think RE would rebound so strongly. There is a solid block of conventional wisdom that thinks "work from home" will be a permanent change in the corporate landscape. So I've put that idea on the back burner.


Hi Chang ...   I am firm believer in REITs as a portfolio diversifier and of course income generator, but they got hammered.  Still some good long term buys though.  My target allocation for REITs is 25% of my equity portfolio, with half medical (which generally pay about 1% higher dividend in good times) and half non-medical.  

I own STOR, O, NHI and HTA (plus a small sliver of a hybrid mREIT that got pulverized but I held on and Gundlach yesterday recommended just hang on and ride these babies out and too late to sell).  

STOR was selling recently at prices below the IPO.  Crazy.  I bought a sliver only because I wanted to feel good for participating in the fire sale.  Berkshire owns some, did not sell and did not buy either.  Perplexing to me.  O and STOR will do better if and when problematic sectors like health and fitness, movie theaters, family entertainment, education and restaurants recover.  STOR is still down 31% YTD.  If I wanted to make one purchase today, that would be it.  O and STOR, both in net lease space, have high profit margin.  NHI is a very diversified medical REIT and HTA is pure medical office buildings play.  As alternative plays there are cell towers and data centers.  Digital Realty is big player, COR is smaller.  I don't understand their technology so I pass but their price held anyways.  

Edit:  Was curious why VNQ was not down and just looked at portfolio.  It has the cell towers and data centers and other non retail investments.  So makes sense price held.  

Edit 2:  Coincidentally ...

https://seekingalpha.com/article/4352906-tale-of-2-net-lease-reits-realty-income-vs-store-capital?ut...

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Frequent Contributor

Re: Portfolio YTD is down 6.7%


@galeno wrote:

This is one CRAZY ride! Hang on tight everyone! 

Our port has been flirting with peak value since Friday. Like it doesn't want to go there.


Hi @galeno,

I believe that you value simplicity. I charted a 50/50 portfolio of SPY and TLT. I chose these two because they have a strong inverse correlation.

I calculated a rebalanced portfolio using strict rules which means immediate rebalance at the first instance based on closing prices. A rebalance was triggered when the value of each position matched or exceeded the band limit.

50-50 Port Rebalancing Actual.jpg

My portfolio is more complex than 50/50 TLT/SPY and I rebalanced 3 times since the beginning of the year which puts me somewhere between 10% and 20% bands depending on the positions that triggered it.

But, the example I charted does roughly hold in my case.  My portfolio peak was near 3/6/2020, and I recovered  that High by the end of April.

The 20% band portfolio was rebalanced on 3/12/2020 and since then, the two positions only reached a 14% difference.

The 10% band portfolio was rebalanced on 2/28/2020, 3/16/2020, and 5/11/2020.  Since then, the two positions have only reached a 6.8% difference.

Holiday

 

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Re: Portfolio YTD is down 6.7%


@PaulR888 wrote:

@chang wrote:

@PaulR888 wrote:

Within equities, my Developed Int'l is overweight and REITs are underweight, but I am not going rebalance.  


Just curious @PaulR888, what % of equities is REITs? I was toying with the idea of RE, but when I looked at VNQ a few days ago, to my surprise I observed that it has rebounded very strongly from the March low (gained > 50%!). I didn't think RE would rebound so strongly. There is a solid block of conventional wisdom that thinks "work from home" will be a permanent change in the corporate landscape. So I've put that idea on the back burner.


Hi Chang ...   I am firm believer in REITs as a portfolio diversifier and of course income generator, but they got hammered.  Still some good long term buys though.  My target allocation for REITs is 25% of my equity portfolio, with half medical (which generally pay about 1% higher dividend in good times) and half non-medical.  

I own STOR, O, NHI and HTA (plus a small sliver of a hybrid mREIT that got pulverized but I held on and Gundlach yesterday recommended just hang on and ride these babies out and too late to sell).  

STOR was selling recently at prices below the IPO.  Crazy.  I bought a sliver only because I wanted to feel good for participating in the fire sale.  Berkshire owns some, did not sell and did not buy either.  Perplexing to me.  O and STOR will do better if and when problematic sectors like health and fitness, movie theaters, family entertainment, education and restaurants recover.  STOR is still down 31% YTD.  If I wanted to make one purchase today, that would be it.  O and STOR, both in net lease space, have high profit margin.  NHI is a very diversified medical REIT and HTA is pure medical office buildings play.  As alternative plays there are cell towers and data centers.  Digital Realty is big player, COR is smaller.  I don't understand their technology so I pass but their price held anyways.  

Edit:  Was curious why VNQ was not down and just looked at portfolio.  It has the cell towers and data centers and other non retail investments.  So makes sense price held.  

Edit 2:  Coincidentally ...

https://seekingalpha.com/article/4352906-tale-of-2-net-lease-reits-realty-income-vs-store-capital?ut...


Thanks @PaulR888. The level of detailed knowledge in your reply is enough to warn me off. RE/REITs is a door I've just never opened. Given that I'm trying hard to avoid new positions in anything, and even a large, new "explore" position would be only 3% of equity, I think I will just keep this on the back burner until RE experiences a prolonged (e.g., 3 year) period of severe under-performance relative to the equity market as a whole. Then maybe...

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Participant ○○○

Re: Portfolio YTD is down 6.7%

Port down. Needs to go up 3.2% to hit PV. 

0% YTD.

Oh well.

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