Another call for a market short. (costs, federal, bond, IRA)

[txfriend]

As of today, the combined YTD return of all my portfolios is 20.69% and I'm happy with that.

[BeerGeek40]

Originally Posted by FREE866

Bull market baby!!

https://www.youtube.com/watch?v=_vqyPbFccjo

[mathjak107]

This has been an exceptional year

Large caps up over 22% and qqq are up 50%

That is well above average returns.

This is why missing exceptional times with enough dollars invested hurts as it is these above average years that pull up the below average years

had i missed the up 50% on my fidelity blue chip growth fund that would be course altering as future compounding on that gain would have been missed too and that is an exceptional gain to miss if it is on substantial dollars .

the problem is few investors bail out at the near highs .. most throw in the towel after things have fallen , so they don’t miss much of the fall and then miss most of the gain as they dip their toes in the water at best . .

this story repeats over and over.

few here are going to end up beating staying invested longer term..

like i said , i can see shifting gears in a portfolio to meet a different objective but it shouldn’t involve less equities then you would otherwise have .

the difference between an S&p fund and the ark funds or fidelity blue chip growth is huge so being 40-60% equities can mean very different exposure and volatility so picking one or the other matters , so i can see going more conservative or more aggressive in exposure , but its the timing in or out of equities and in to cash or bonds that will burn you…

[Lizap]

Originally Posted by mathjak107

balanced portfolios are all over the map .

…the fidelity insight growth and income model is up 13% .

just looking at some popular funds the more aggressive fidelity balanced fund is up 17%

wellesly income is having a tough time , it s up just 3.90% ytd

Wellesley’s lackluster performance this year is due primarily to two things: it’s large percentage of bonds (typically around 60%) and its equity portion is mainly large cap value. It will perform well in a prolonged bear market. It is an excellent core holding for most retirees. I like to combine it with a more growth-oriented, balanced 60-40 fund..

[mathjak107]

wellesly had a pretty large position in long term bonds .it was almost 20% at one point so they anticipated something that never played out .


they have since cut that down.

i like wellesly and gold for a defensive play.

i don’t use it but it would make a nice conservative portfolio.

most back testing shows it performed better with about 15% gold then it did alone.

the one negative for wellesly in a downturn is now they have a big BBB segment in bonds

if that segment sees a credit hit in a downturn then it is no longer investment grade .

with every institution, fund and insurer that is forced to hold investment grade having to dump it that segment can be devastated.

that segment has 10x what it did in 2008 and with 70% of the non govt bond market in it ,moodys and s&p credit rating agency think it can be a financial disaster

for the record 40% voo which is an s&p fund and 60% BND total bond fund IS up about 9.37% so it wasn’t the fact they were in large caps and bonds .

it was more specifically what they bought that didn’t pan out

[FREE866]

Retired or not, if one has a 20-30 year investment time horizon ( like most 50-60 year olds do) the last thing I want is a "defensive" portfolio to try to avoid a bear market. Bear markets are a feature of investing, not a bug. The long term return of ~10% for stocks INCLUDES bear markets.

[mathjak107]

Originally Posted by FREE866

Retired or not, if one has a 20-30 year investment time horizon ( like most 50-60 year olds do) the last thing I want is a "defensive" portfolio to try to avoid a bear market. Bear markets are a feature of investing, not a bug. The long term return of ~10% for stocks INCLUDES bear markets.

i agree ,which is how the whole argument started .

for most 100% equities, preferably funds is the way to go..

for retirees a portion of the portfolio can be in a 100% equity model …we certainly have money we won’t eat with for two to 3 decades even at 65.

i doubt most living off their portfolio are going to want 100% equities..i know i was always a very aggressive investor but no way do want very high levels of equities in retirement.

50/50 overall works for us.

8-1/2 years in and our balance is higher then the day we retired, despite the dip and the six figures a year we take out to live on

[Lizap]

We have a 50-50 retirement portfolio of two funds (conservative and moderate allocation funds). Over the last 37 years, the average ROR has been slightly over 10% with much less risk than the overall market. With that said, I do not expect the ROR to average 10% over the next 10 years, as interest rates declined/bond prices increased significantly over part of the backtested period.

[mathjak107]

Originally Posted by Lizap

We have a 50-50 retirement portfolio of two funds (conservative and moderate allocation funds). Over the last 37 years, the average ROR has been slightly over 10% with much less risk than the overall market. With that said, I do not expect the ROR to average 10% over the next 10 years, as interest rates declined/bond prices increased significantly over part of the backtested period.

when i say 50/50 i mean including every dollar whether cash or not, whether retirement money or not , regardless of what the money is allocated or used for .

52% of ALL ASSETS IS equities , 37% bonds and 11% cash as of friday

looking at only the 3 models with actual investments and not including multiple 6 figures of cash would have the allocation higher then 50/50…

it can be very misleading when some says they are high equity levels but only count the portion in retirement money while almost as much sits in cash .

so it’s always best to define exactly what that allocation represents.

some portfolios even include a substantial cash position like the permanent portfolio or golden butterfly as part of it .

so comparing results to other models with no cash positions and keeping the cash outside the portfolio with the other models and not including its drag wouldn’t be a fair comparison in performance.

i like to express it as one total number with all the cash

by the way , we do have someone in the forum who does that ..they profess how they are not an investor but then tell people they are 100% equities because that is how the little bit in the retirement account is poised and it’s all they count

[mathjak107]

Originally Posted by txfriend

As of today, the combined YTD return of all my portfolios is 20.69% and I'm happy with that.

returns need to be looked at across the board or one is really fooling themselves . so we don’t know exactly what the above entails

not saying this is the case above , but we have people with far more cash instruments who dabble in markets and either highlight the performance the little bit invested is getting or they over exaggerate their allocation in the grand scheme of things .

that little bit invested they call 100% or 50% equities is really just a small part of their holdings

so the whole portfolio including cash moves the gain meter on their money way way less then what they state on that little portion invested .

i would bet many of the conservative investors here who say they are 50/50 or 40/60 or higher are actually somewhere in the low 30% range when taken as a whole with heavy cash positions or less so those stock gains end up being like peeing in the ocean over time when taken as a whole compared to what the actual invested portion got.

so i always count cash i am holding too as that is my actual allocation over all at the end of the day.

in practice i actually have 4 separate models

we have 2 years spending sitting in cash

an income model that is 25% conservative equity funds and 75% assorted fixed income for shorter term use

the bulk is in a 60/40 model for intermediate term use

lastly we have a 100% equity model with vti which is total market fund and berkshire for the long term money.




the whole thing according to instant x-ray is

52% equities

37% assorted bond funds

11% cash

so while it is bucketized for optimum efficiency for each time frame everything has an overall allocation so i know where i stand as far as risk and or volatility.

i don’t actually track my overall returns because money is always going in and coming out , i just go by where we stand vs the day we retired .

i can look up the portfolio models themselves on fidelity insight but at this stage i am not looking to beat benchmarks or indexes .

i want as efficient and comfortable ride as i can while maintaining a decent growth rate and that’s my only goal.

i like having my money compartmentalized by years of money not that it adds any real benefit other then letting me optimize it easier then one big portfolio

i think it would be interesting to have a thread showing overall how our passive investing is actually allocated when looked at as a whole not including brick and mortar real estate