I am up 4.42% YTD and on track for my worst year since 2008. Not sure that is isolated to me or others are also struggling. I take no solace in the fact my return is higher than many of the market indexes as my goal is to consistently compound my capital and not to shadow or beat any particular market index. I haven't a clue how the rest of the year will unfold. I think China is simply an excuse for an already overall sick market. But as we have seen, at least since 2008, rallies seem to come when the markets have looked the sickest. At my age and financial situation I am in no mood for any drawdown in my total nest egg - even a 1.5% or 2% decline. Then again I was never in the mood for any drawdown, young or old. So all I hold (for the moment) are three very small equity positions in small cap biotech and a bank loan fund. Junk corporates have performed especially poorly lately in part because of the decline in oil prices. On the other hand, junk munis are suddenly looking inviting again.
Comments
How do you invest meaningfully at all?
Or did you, given your next sentence.
Derf
Worst since '08? It may turn out to be. Still 5 months to go. But it's certainly a strange year. My best year since '08 was +29% in '09. The subsequent worst was +1.2% in '11. Currently, I'm off -1.5% YTD.
I've always kept a foot in the Dollar sensitive areas like commodities, NR, international bonds and foreign currencies. Those are dragging me down this year.
As a benchmark of sorts, I use Price's Balanced Retirement Fund, TRRIX, (formerly Retirement Income). It's a well-mannered well managed fund (generally 40/60) which I think suitable for someone a decade or so into retirement. It's also having a lackluster year, up just 1% YTD.
Not unlike any investor, I/we don't like to give back any money.
Had a decent YTD as of last Saturday. That value is taking a bit of a beating since last Friday. But, money (rates/bonds) is still very cheap for borrowing and I feel some equity areas will still be the areas into which the money will continue to run. We don't have any direct exposure, at this time; to Asia area. China.....well, not sure how to gauge that market; as how does one know what is real and what is government support? A whole different form of government QE! So, with fingers crossed; we will remain with the following for today.......
Pretty much a full rotation from 3 years ago for percentages for our portfolio. Broad U.S. equity is so-so, eh?; U.S. real estate is improving, but rough YTD and bonds mostly flat YTD. The support for our portfolio currently, has been from healthcare and Europe.
Below is our current mix.
---68% equity
---22% bonds
Of the equity mix: 42% is health related equity, 25% is blend caps U.S., 20% international and 13% U.S. real estate.
Equity funds:
HEDJ (Wisdomtree hedged Europe, a lot GB, Germany, France and a bet on a continued weakening Euro and improving economies)
FHLC (Fid. health etf)
FSPHX (Fid. select health)
PRHSX (TR Price health)
VIIIX (Vanguard Total U.S. index)
ITOT (I-shares, U.S. market)
GPROX (Granduer Peak)
DPRRX (U.S. real estate)
BRUIX (U.S. real estate)
FRIFX (U.S. real estate...50/50 equity bonds)
Bond funds:
BAGIX (investment grade mostly, similar to Pimco PTTRX)
DGCIX (Delaware bond, mixed)
FBNDX (Fid. I.G. bonds)
Stocks:
DPLO (IPO purchase last October) 30 year old private speciality pharmacy. I/we were very much aware of the quality of management.
ABC (AmerisourceBergen-pharma/medical items distribution, now veterinary, too,etc.)
Reporting from the end of a half sawn investment tree branch and hoping for no big winds to rock the tree.
Catch
I can see where Junkster is up 4.4% as claimed because he has booked profit from most of the positions he opened. One of the things that has helped me better my boggy, the Lipper Balaned Index, has been my special investment position (SPIFF) that I opened this past fall and held through late spring with its gains now booked has provided enough profit to push me ahead of it.
A few good spiffs, from time-to-time, can make your returns real healthy.
>> I am in no mood for ... even a 1.5% or 2% decline.
So how do you equity-invest at all if you do not ever want to see a 1.5% decline ?
"World-allocation portfolios seek to provide both capital appreciation and income by investing in three major areas: stocks, bonds, and cash. While these portfolios do explore the whole world, most of them focus on the U.S., Canada, Japan, and the larger markets in Europe. It is rare for such portfolios to invest more than 10% of their assets in emerging markets. These portfolios typically have at least 10% of assets in bonds, less than 70% of assets in stocks, and at least 40% of assets in non-U.S. stocks or bonds." http://money.usnews.com/funds/mutual-funds/rankings/world-allocation
RPGAX (which I own) seems to conform pretty closely to that definition. it's up 3.36% YTD. That would put it in the 5-6% bracket for a full year - if the trend continues.
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Yikes. Hadn't realized EM's were bleeding so badly. Thanks Bob for the insights.
I always attribute my good years to skill and my off years to bad luck.
If you trade a lot, skill has much to do with returns. Kudos to those who do it successfully.
If you are more of a passive allocation type investor, much of your year-to-year success depends on the whims of the various markets, and to some extent, the skill of the managers you have hired to manage that allocation. For example, your bond fund manager may have a premonition of impending doom and position the fund on the short side. That won't eliminate losses completely, but will provide superior returns to a manager who kept maturities long.
Just my 2 cents.