YTD...FXAIX(SP500) -15.7...VBTLX(Bond index) +2.15...FSPSX (international) -23%...VNQ(RE) -13.7%
The 2 categories most used for comparison are SP500 + US Total bonds.
YTD...60/40(SP500/bonds) = -8.6%....50/50 = -6.78%...40/60 = -5%
The above is what you should use to compare your portfolio
So, what did we learn from this bear market?
1) Diversification didn't help you. When US SP500 sneeze, international stocks are sick. Last week: FXAIX lost -8.7...FSPSX lost -14.4%
2) Correlation is much higher when markets collapse
3) FI CEFs are volatile as stocks, actually, their volatility was higher, last week FXAIX lost -8.7 but 2 great CEFs PDI+PCI lost 15.5-16.4% which is 80% more loss. But, FI CEFs are a better buy at the bottom after you realized their NAV didn't lose as much.
4) The only true diversifiers to stocks are bonds and treasuries are the best.
5) As Retiree, you may want to add selling flexibility to your portfolio such as: when VIX > 40 sell some riskier stuff. It's difficult to do for most since it doesn't happen very often and most forget about it.
6) Most investors don't understand risk and surprised when their portfolio loses a lot more than they expected. If you are in 50/50 and lost 13% it's almost double than the above 50/50 at -6.8%.
7) Rebalance is a good idea until it's not. Every time you rebalance in a real bear market you add risk and more losses.
8) Higher dividends stocks didn't save you. YTD...SDY -20%...NOBL -17.9% but the "stupid" SP500=FXAIX lost -8.7 and I'm sure some of you own the ones that did better and claim that as long as you get dividends everything is OK
I'm positive for the year at 99+% in MM and will continue trading or do nothing until I see an uptrend. I will start investing as usual when I see positive weekly MACD (link
) and/or 3 line break(link
) with green bars which are faster than the weekly MACD.