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Valued Contributor

Re: "How Are Diversified Portfolios Holding Up During the Crash?"

HI Win,

I enjoy your posts and our exchanges.

Not to worry about terminology. 

I think we understand each other.

Stay well.

Bob

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Valued Contributor

Re: "How Are Diversified Portfolios Holding Up During the Crash?"


@ElLobo wrote:

My 2X portfolio dropped more than twice what the underlying non-leveraged funds or indexes fell.  I received, YTD, 2.1 times the portfolio income that the unleveraged funds generated.  I won't know how much my total portfolio cash flow will go down, going forward, until the middle of April.  I won't be surprised if it drops down, from 2.1X to 1X, still covering my retirement withrawals.

My portfolio, a month ago, was roughly 2X, consisted of 1 CEF, PCI (20%) and 3 ETNs (SDYL (30%), PFFL (20%), and MORL (30%))  Today, it is roughly 40% SDYL, 50% PFFL, 10% cash.

So far, it's doing what I expected it to do, regardless of whether the market went down, or up.


I have to keep your "amazing" style 😊

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Contributor ○

Re: "How Are Diversified Portfolios Holding Up During the Crash?"


@Win1177 wrote:

Bob,

Maybe I should change the word “carnage” to a less profound word? What I was referring to is the fact that many of the medium to higher quality bond funds I held (VBILX, VICSX, etc.) with investment grade corporates/ treasuries, FELL as stocks sold off. I would have expected them to have held up better.

Granted, they fell a fraction of equity funds and individual stocks, but still did not provide as much “downside protection” as I was expecting.


Hi Win ...  I know you are looking for ballast bond funds and you are not happy with VICSX.  VBILX looks fine to me.  Personally, for a ballast bond fund I would find -3% or better YTD is acceptable.   VICSX has too high of a sector bet.  Think IOFIX.  DODIX TGLMX/TGMNX has some appeal but I am sure you can search Vanguard for other options.  So far, no harm no foul.  Stress test is good to help you pick something better for your portfolio.  Since you have a significant portfolio, I would avoid bond funds who say current income is a focus.  That would be yield above 3%.  In my portfolio, they have lost more.  I need to reach for yield as my portfolio is smaller.  My weighted average YTD of my bond OEFs as of yesterday was -6.6% and the current income funds took it down.  I can live with the volatility as you said no where near equity volatility, but I see no reason you should.  Good luck.  

CORRECTION:  Sorry Win.  I gave you a bum example.  Maybe look at TGLMX/TGMNX.  I would lean toward an Intermediate Core Bond fund for you or a Total Return bond fund.

Also, the other day I listened to a Fidelity webcast and American Funds was represented.  They mentioned their American Funds Bond Fund of America as a solid intermediate core bond fund offering balance and diversification.  Maybe check that one out too and if nothing else use for comparison if shopping for a good core bond fund (See BFAFX).  

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