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Frequent Contributor

Re: Market recovery, should you index?


@outandabout wrote:

 


@cliff wrote:

@ElLobo wrote:

  Index fund investors will earn average returns, going forward. 


ElLobo, I've been head down planning and writing a novel for the last couple of weeks, so I may not be current on the news and recent market action.

A short while back, knowing then that I wouldn't have time to seriously follow individual investments, I sold all my holdings and put the entire enchilada in a whole market index fund.  I was moved to do so by a drumbeat of bleatings urging me to 'HOP ABOARD!!!!  DOW 33,000 IS RIGHT AROUND THE CORNER!!"

Yes, this was a departure from my income focus of many years.  And I fully expected my cash returns to be drastically reduced.  But I was going to be busy with no time to spend worrying about the market.  I figured for once I'd obtain the results of average and below average investors and I'd just have to be satisfied with those results.

When I finish up the final chapter here in a day or so, I'm going to do two things.  First, I'm going to check my account and see if my unrealized returns synch up with that DOW 33,000!!! train I was urged to HOP ABOARD!!  And then I'm going to post a pre-order notice for my book here on Morningstar.

Yeah, the hop aboard thread didn't amount to much., but most investors understood it wasn't anything more than an attention getter.


 


 

 Talk about attention-getting; you had two trains to jump aboard, that of an "above average"/investor poster or the informed indexer. How would members have faired choosing #1 vs #2 train?

 

Targa Resources (TRGP)  9.2% yield………………………….-83.26%   since recommended on 1/10/20

Macquarie Infrastructure  (MIC) 9.1% yield…………………..-44.63%

Energy Transfer (ET)  9.1% yield……………………………….-65..04% 
  
Iron Mountain (IRM)  8.0% yield………………………………..-17.22%

Tanger Outlet (SKT)  8.7% yield…………………………………-66.51%

Nustar Logistics (NSS)  8.6% yield……………………………..-46.81%

AGNC Investment Corp (AGNCO)  7.2% yield……………….......-25.01%

 

Choose Indexing!!


Index ( VTI Vanguard Total Market Fund )……………………….-20.59%

 

 Most investors have seen the value of their portfolios decline YTD; some more than others.

Ya'll be careful........

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Frequent Contributor

Re: Market recovery, should you index?


@Bentley wrote:

@outandabout wrote:

 


@cliff wrote:

@ElLobo wrote:

  Index fund investors will earn average returns, going forward. 


ElLobo, I've been head down planning and writing a novel for the last couple of weeks, so I may not be current on the news and recent market action.

A short while back, knowing then that I wouldn't have time to seriously follow individual investments, I sold all my holdings and put the entire enchilada in a whole market index fund.  I was moved to do so by a drumbeat of bleatings urging me to 'HOP ABOARD!!!!  DOW 33,000 IS RIGHT AROUND THE CORNER!!"

Yes, this was a departure from my income focus of many years.  And I fully expected my cash returns to be drastically reduced.  But I was going to be busy with no time to spend worrying about the market.  I figured for once I'd obtain the results of average and below average investors and I'd just have to be satisfied with those results.

When I finish up the final chapter here in a day or so, I'm going to do two things.  First, I'm going to check my account and see if my unrealized returns synch up with that DOW 33,000!!! train I was urged to HOP ABOARD!!  And then I'm going to post a pre-order notice for my book here on Morningstar.

Yeah, the hop aboard thread didn't amount to much., but most investors understood it wasn't anything more than an attention getter.


 


 

 Talk about attention-getting; you had two trains to jump aboard, that of an "above average"/investor poster or the informed indexer. How would members have faired choosing #1 vs #2 train?

 

Targa Resources (TRGP)  9.2% yield………………………….-83.26%   since recommended on 1/10/20

Macquarie Infrastructure  (MIC) 9.1% yield…………………..-44.63%

Energy Transfer (ET)  9.1% yield……………………………….-65..04% 
  
Iron Mountain (IRM)  8.0% yield………………………………..-17.22%

Tanger Outlet (SKT)  8.7% yield…………………………………-66.51%

Nustar Logistics (NSS)  8.6% yield……………………………..-46.81%

AGNC Investment Corp (AGNCO)  7.2% yield……………….......-25.01%

 


Index ( VTI Vanguard Total Market Fund )……………………….-20.59%

 

 Most investors have seen the value of their portfolios decline YTD; some more than others.

Ya'll be careful........

I'll admit, Bentley, times have been trying this past month. When I started to reduce my equities last fall I realized I may be giving up future portfolio value, but there were enough indications that we were in need of a correction I just felt it was time for me to reduce risk. It's anyone's guess where the markets will end up at year's end, but I'm willing to buy and sell individual stocks over the next few months(?).

The virus correction may well have covered the expected loss we knew was on the horizon. Let's hope we won't have to test new lows.

Incidentally, Bentley, I was on neither of those two trains. I chose to hitch hike along my own path.

 


 

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Frequent Contributor

Re: Market recovery, should you index?

Outandback,

 Please correct your post above to reflect proper quotations. You should start your reply AFTER the grey line on the left of post OR at least color your entire reply and not just parts.

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Frequent Contributor

Re: Market recovery, should you index?

Nobody has commented about the bond/debt markets.

YTD, SPY is down 18%.

YTD, SDY, the unleveraged divey aristrocrat ETF, paying an extra 1% more yield than the market, is down 25%.

YTD, the roughly 1.8X leveraged MBS based PCI is down 32%.

YTD, PGX, the Invesco's unleveraged Preferred ETF is down 13%

YTD, REM, the unleveraged MREIT ETF is down 55%.

Yahoo! chart of the above.

The Fed/Treasury has pledged $4 trillion in TARP cash as part of the current stimulus package to prop up this market?

Would you switch from the market index SPY, down 18% YTD, to the non-market cap and higher yielding SDY, down 7% more than SPY in terms of eventual market recovery and a bit more yield?

Given TARP, would you move a bit of your SPY/SDY money into PCI, tilting towards both higher yield AND potentially higher cap gains?

What about REM, instead of PCI?

What about PGX instead of PCI, SPY, SDY?  If so, which?

Or just continue to hold the market index fund?

ElLobo, de la casa de la toro caca grande
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Frequent Contributor

Re: Market recovery, should you index?


@ElLobo wrote:

Nobody has commented about the bond/debt markets.

YTD, SPY is down 18%.

YTD, SDY, the unleveraged divey aristrocrat ETF, paying an extra 1% more yield than the market, is down 25%.

YTD, the roughly 1.8X leveraged MBS based PCI is down 32%.

YTD, PGX, the Invesco's unleveraged Preferred ETF is down 13%

YTD, REM, the unleveraged MREIT ETF is down 55%.


 

 YTD, BND is up 3.02%..................:)

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Participant ○○○

Re: Market recovery, should you index?


ElLobo, if I contributed to getting your thread off-topic, I apologize.  One more thing, though . . . . . 

I may need some technical help on setting up a GoFundMe thingy.  The purpose would be to collect monies to give to Morningstar so they can pay to institute the IGNORE function.  I figure if everyone who is sick and tired of bleating, trolling behavior contributed 25 cents, we could easily collect $50,000 or more.

If there was any money left after we get to ignore those who deserve to be ignored, we could have a Plan B to disburse the balance.

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Frequent Contributor

Re: Market recovery, should you index?


@cliff wrote:


ElLobo, if I contributed to getting your thread off-topic, I apologize.  One more thing, though . . . . . 

I may need some technical help on setting up a GoFundMe thingy.  The purpose would be to collect monies to give to Morningstar so they can pay to institute the IGNORE function.  I figure if everyone who is sick and tired of bleating, trolling behavior contributed 25 cents, we could easily collect $50,000 or more.

If there was any money left after we get to ignore those who deserve to be ignored, we could have a Plan B to disburse the balance.


You are never off topic, Cliff.  Besides, you're just a Participant, not a Valued Contributor, so nobody expects you to know any better.  But be extra careful, good buddy, even mentioning GoFundMe.  That's not only political but just about breaching the racial epithet M* limits on off topic matters.

ElLobo, de la casa de la toro caca grande
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Frequent Contributor

Re: Market recovery, should you index?


@cliff wrote:


ElLobo, if I contributed to getting your thread off-topic, I apologize.  One more thing, though . . . . . 

I may need some technical help on setting up a GoFundMe thingy.  The purpose would be to collect monies to give to Morningstar so they can pay to institute the IGNORE function.  I figure if everyone who is sick and tired of bleating, trolling behavior contributed 25 cents, we could easily collect $50,000 or more.

If there was any money left after we get to ignore those who deserve to be ignored, we could have a Plan B to disburse the balance.


Since we are off-topic anyway;  Happy birthday, Cliff.  Have a stiff one for me, and maybe even a drink or two :o}

 

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Participant ○○○

Re: Market recovery, should you index?


@bilperk wrote:


Since we are off-topic anyway;  Happy birthday, Cliff.  Have a stiff one for me, and maybe even a drink or two :o}

 

 


HA!  I just knew there'd be too much private info about me made public once the court released that FISA warrant application against me.

Thanks, Bill, but I'm not going to reduce my drink intake just because you suggest it.  In fact, I'm on day 25 of an experiment investigating an antidote to the bat virus.  Preliminary results indicate that cheap scotch, liberally consumed, prevents the consumer from catching the thing.

Seriously, though, getting old is not for the weak.  Right now our average age is 57 so I figure I've got a few good years left.

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Re: Market recovery, should you index?


@Bentley wrote:

Outandback,

 Please correct your post above to reflect proper quotations. You should start your reply AFTER the grey line on the left of post OR at least color your entire reply and not just parts.

 


M* should make it darker.

Since you always like facts and figures:

One year return for SGEN +57.54% vs VTI  -9.27%.

I would have suggested you look at SGEN, but..........

 

 

 

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Participant ○○

Re: Market recovery, should you index?

I'm sure a year or two from now we'll be reading stories about research that shows the indexers beat the active investors yet again (on average) - this time in the post covid-19 market. And I have no doubt those articles will be correct. 

But I still can't bring myself to index. I just can't accept the idea of buying absolutely everything blindly, no matter what the facts about any particular investment are. 

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Re: Market recovery, should you index?


@Academic wrote:

I'm sure a year or two from now we'll be reading stories about research that shows the indexers beat the active investors yet again (on average) - this time in the post covid-19 market. And I have no doubt those articles will be correct. 

But I still can't bring myself to index. I just can't accept the idea of buying absolutely everything blindly, no matter what the facts about any particular investment are. 


It isn't just a passive index versus actively managed issue.  It's a case where you might, for example, use the divey aristrocrat ETF, SDY, rather than SPY, or tilt your basic stock index allocation towards, maybehaps, utilities, real estate, health care, and/or communications by moving 5-10% of your index fund to appropriate ETFs.

Or maybe you move a part of your stock index allocation over towards something like PCI, maybehaps even BND!  Or preferred stock ETFs such as PFF.

It's quite easy to use such as Portfolio Visualizer to 'allocate' among several ETFs, along with your index fund, to see what potential 'benefit' you might get by doing so.

ElLobo, de la casa de la toro caca grande
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Participant ○○

Re: Market recovery, should you index?

I'm tempted to put 5% of port into "bingo money" and buy the following stocks.

BA (Boeing)
OXY (Occidental Petroleum)
CCL (Carnival Cruise)
PK (Park Hotels)
KHC (Kraft Heinz)
AAL (American Airlines)
PVH (Pierre Cardian)
DIS (Disney)
SBUX (Starbucks)
JD (JD.com / Chinese)

But I won't. I love the laziness of indexing. I try to stay close to the FTSE all world all cap index. But I did tilt to smaller and EM a bit.

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