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Last year, the media declared Allocation 60-40 dead, and this year they have risen from the dead, or risen from the ashes. WSJ, Barron's, M*, almost everybody. Media headlines are for the the current news with some hype.
While basic 60-40 (SP500-like + 10-yr Treasuries) had its ups and downs, there were only 5 years in history when both stocks and bonds were down, 1931 (both DODBX and VWELX existed then), 1941, 1969, 2018, 2022 (last year), and in absolute terms, 2022 was simply the worst year for 60-40 since 1937. It is almost natural that dramatic rebounds follow dramatic collapses (for funds at least). https://twitter.com/charliebilello/status/1609209009994612739
”From 12/31/2021 through 10/12/22, PRWCX lost 16.91%. Since then it has gained 13.54%.”
At the depth of the decline, $100 invested on 12/31/21 would have fallen to just over $83 - perhaps enough to spook some little old “grannies” (but no one here) into selling. Those who continued to hang on would have $94.34 remaining today for every $100 invested at the end of 2021.
Those with the foresight to pour additional money into the fund on 10/12/22 would have reaped significant reward. However, at that point there were more compelling opportunities in “growthier” funds that had fallen farther as well as in individual securities - were one willing to gamble a bit.
Yes, I pulled out the limited amount I’d had in PRWCX sometime in 2022. Reasons were complex. (1) I had many more opportunities at Fido than when constrained to TRP’s in-house funds in the past. (2) I revamped my portfolio early in ‘22 to encompass several alternative type funds as a risk mitigation measure. So, basically I consolidated the remaining PRWCX money into another similar fund. Rest assured the move had nothing to do with not wanting a “rock-star” manager.
Thanks @MikeM - No problem. Just that I’ve tried over recent months not to mention specific trades or holdings. I hope you and the others in PRWCX do well. Will follow the progress.
Comments
While basic 60-40 (SP500-like + 10-yr Treasuries) had its ups and downs, there were only 5 years in history when both stocks and bonds were down, 1931 (both DODBX and VWELX existed then), 1941, 1969, 2018, 2022 (last year), and in absolute terms, 2022 was simply the worst year for 60-40 since 1937. It is almost natural that dramatic rebounds follow dramatic collapses (for funds at least).
https://twitter.com/charliebilello/status/1609209009994612739
At the depth of the decline, $100 invested on 12/31/21 would have fallen to just over $83 - perhaps enough to spook some little old “grannies” (but no one here) into selling. Those who continued to hang on would have $94.34 remaining today for every $100 invested at the end of 2021.
Those with the foresight to pour additional money into the fund on 10/12/22 would have reaped significant reward. However, at that point there were more compelling opportunities in “growthier” funds that had fallen farther as well as in individual securities - were one willing to gamble a bit.
edit: for the record, I've actually increased my stake in PRWCX to just under 30% of my self-managed portfolio. For better or worst do we part.
Yes, I pulled out the limited amount I’d had in PRWCX sometime in 2022. Reasons were complex. (1) I had many more opportunities at Fido than when constrained to TRP’s in-house funds in the past. (2) I revamped my portfolio early in ‘22 to encompass several alternative type funds as a risk mitigation measure. So, basically I consolidated the remaining PRWCX money into another similar fund. Rest assured the move had nothing to do with not wanting a “rock-star” manager.
Must be our monthly contributions!
You guys are making progress, we are sitting at 88.4% in TRAIX/PRWCX.