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YTD Market returns...not that impressive?
Old 07-13-2019, 06:01 AM   #1
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YTD Market returns...not that impressive?

Like most of us here I track investment returns each month and at interim points in Excel. The highs on 7/12/19 were 17.2% for DJIA and 20.2% for S&P 500 which seem eye-popping.

However, I was wondering why my total NW wasn't as impressive given these market highs. Looking back at the highs in 2018 (10/3 for DJIA and 9/20 for S&P) the returns from those highs are only 1.9% and 2.8% respectively.

So yes very thankful the markets have recovered from that bad stretch in Q4 of 2018 but it goes to show you how the "numbers" can be deceiving. Long term averages are the best way to look at markets.
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Old 07-13-2019, 06:09 AM   #2
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Originally Posted by arch57 View Post
Like most of us here I track investment returns each month and at interim points in Excel. The highs on 7/12/19 were 17.2% for DJIA and 20.2% for S&P 500 which seem eye-popping.

However, I was wondering why my total NW wasn't as impressive given these market highs. Looking back at the highs in 2018 (10/3 for DJIA and 9/20 for S&P) the returns from those highs are only 1.9% and 2.8% respectively.

So yes very thankful the markets have recovered from that bad stretch in Q4 of 2018 but it goes to show you how the "numbers" can be deceiving. Long term averages are the best way to look at markets.
Exactly and the concept that if the markets drop 20% in year 1, then they need to go up 25% in year 2 to just get back to even.
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Old 07-13-2019, 06:15 AM   #3
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+1

2018 was a lousy year. The market has been making up for it.
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Old 07-13-2019, 06:17 AM   #4
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Like most of us here I track investment returns each month and at interim points in Excel. The highs on 7/12/19 were 17.2% for DJIA and 20.2% for S&P 500 which seem eye-popping.

However, I was wondering why my total NW wasn't as impressive given these market highs. Looking back at the highs in 2018 (10/3 for DJIA and 9/20 for S&P) the returns from those highs are only 1.9% and 2.8% respectively.

So yes very thankful the markets have recovered from that bad stretch in Q4 of 2018 but it goes to show you how the "numbers" can be deceiving. Long term averages are the best way to look at markets.
The standard of looking at total returns only on a year-by-year basis +YTD for the current year is arbitrary, but convenient since there are so many sources for that info (M*, Google, Yahoo, etc.). I disagree about looking at long term averages since that hides the volatility which is important to a retiree, especially one who had the unfortunate experience of retiring in 2008.

I track monthly growth, from that I can extract monthly volatility and then calculated an annualized version of it as well as drawdowns as well as a CAGR over any timeframe I wish. I don't think it's "best", but I think it's much better than simply long term averages which hides too much useful info.
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Old 07-13-2019, 08:27 AM   #5
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I find it totally unhelpful to learn how many points the market is up or down in the last day. The least the reporters should do is convert to a percentage. But even that is useless because yesterday could have been the opposite. Of course this means "no news", which doesn't attract listeners. The best reporting would be rolling averages of various lengths. Maybe 7 days for the "players", and 30 day, 90 day, 1 year, 5 year. But those long ones aren't "news". They're important to keep perspective, but not news.
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Old 07-13-2019, 08:33 AM   #6
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A single-day market movement is no big deal.

What I really do not like is when it goes down every day for a week. Or worse, most of a month.

Now, you are talking serious money.
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Old 07-13-2019, 08:39 AM   #7
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My portfolio is back to where it was after the Q4 December downturn.
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Old 07-13-2019, 08:44 AM   #8
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My portfolio is back to where it was after the Q4 December downturn.
Yep, same here, we just hit a new NW and asset high after a big trough.
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Old 07-13-2019, 08:47 AM   #9
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I don't track my returns on spreadsheets. I just use the info Fidelity gives me. And to be honest, I rarely look at that more than 3-4 times a year. I do look at my $ balance fairly often and I'm at an all time high as I imagine most are here. Is that the equivalent of a 'wheeee'?
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Old 07-13-2019, 08:56 AM   #10
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Since I retired end of June 2018, I look at what my return was in the first year of my retirement, as well as the first 6 months of this year.

Even with the late 2018 meltdown, I was still up 4% in my equity/bond investments from end of June 2018 to end of June 2019. Not impressive, but My SWR is running less than 1/2 of that, so I am still coming out ahead.

I am at an all-time high now, but whenever that occurs I look at what the impact of a 10% drop in my investments would leave me with, just to keep an even keel on things.
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Old 07-13-2019, 09:03 AM   #11
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I have more or less recovered in 2019 what I lost in the last three months (or so) of 2018.

YTD is +10.4% for me (about a 45/55 AA currently), which is about what was lost in the combination of October and December 2018.
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Old 07-13-2019, 09:12 AM   #12
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... Long term averages are the best way to look at markets.
Yes, of course. But then why would you

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... track investment returns each month and at interim points in Excel. ...
Your post got me thinking. I don't recall that DW and I have ever discussed the investment returns on our portfolio. (And she is a retired megabank SVP). We are passive investors, so we get what the market gives, which over a long investment horizon is quite acceptable to us. So in the immortal words of Alfred E. Neuman: "What? Me worry?"

I do track the returns of a couple of stock-picking portfolios against passive benchmarks. I'm sure the statisticians would say that five or even ten years of data is necessary before any conclusions can be drawn. Being impatient, my rule is that I don't look at any comparisons shorter than two years of returns.
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Old 07-13-2019, 09:29 AM   #13
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Good observation. Its easy to use different starting points and get wildly different numbers.

Its the withdrawal part that makes me keep tracking my returns as the chart makes it look kind of sad (as it doesn't have a way to show the massive down payment I took out), but the return is still very healthy and I have to keep reminding myself that while the chart shows I am still down, I'm actually ahead.
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Old 07-13-2019, 10:58 AM   #14
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Your post got me thinking. I don't recall that DW and I have ever discussed the investment returns on our portfolio. (And she is a retired megabank SVP).
My DW thinks I’m nuts tracking everything and she was a finance major herself. Being an engineer I like to “play” with numbers and started our investment spreadsheet in 2006. Do all my own investing so wanted to track when we reached enough to retire. Fascinating to look back at the meltdown in 2007 and see how staying patient and not changing our portfolio out of fear paid off in the recovery.
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Old 07-13-2019, 11:36 AM   #15
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... I like to “play” with numbers and started our investment spreadsheet in 2006. ...
There are certainly hobbies that are worse, though this one can get expensive if one starts reacting to the noise in the signal. Sounds like you are not one of those. Good.
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Old 07-14-2019, 05:33 AM   #16
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My DW thinks I’m nuts tracking everything and she was a finance major herself. Being an engineer I like to “play” with numbers and started our investment spreadsheet in 2006. Do all my own investing so wanted to track when we reached enough to retire. Fascinating to look back at the meltdown in 2007 and see how staying patient and not changing our portfolio out of fear paid off in the recovery.

Great observation! Sticking to your plan during a downturn isn’t easy but missing the recovery would have been an expensive mistake. I stuck with my plan and was pleasantly surprised by how much those accounts recovered. I just wish I had made some additional investments when valuations were really low.
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Old 07-14-2019, 06:08 AM   #17
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Its nice to be at an all time high but when I notice that it just recently popped over my 2/2018 previous high I feel like I have been in a year long limbo. We still have a ways to go to see if 2019 will stay up at these levels.
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Old 07-14-2019, 06:20 AM   #18
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If your tool (Excel, Personal Capital, Fund Manager, etc) gives you the ability to do so easily, it's interesting to see what percentage you're up since Jan 1, *2018*. For me, excluding the cash part of my investment portfolio, it's 6.2% percent..YTD on same part of the portfolio is 12.7%..
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Old 07-14-2019, 06:41 AM   #19
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If your tool (Excel, Personal Capital, Fund Manager, etc) gives you the ability to do so easily, it's interesting to see what percentage you're up since Jan 1, *2018*. For me, excluding the cash part of my investment portfolio, it's 6.2% percent..YTD on same part of the portfolio is 12.7%..
Look from later in January after the market rally and just before things started going south. My 2018 high point was 1/26/2018, up almost 4% from Jan 1.
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Old 07-14-2019, 06:51 AM   #20
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This prompted me to check my own numbers. As of the 7/12/19 close, I'm up around 18.5% for the year. If I look back to 7/31/18 though, my return is around 4.3%. It might sound a bit lame looking at it that way, but when you factor in that little pullback we had at the end of 2018, I'll take it!

From my peak in September 2018 to the bottom on Christmas Eve, I was down around 17.5%. The comeback from then was swift, though. By New Year's Eve's close, I was only down about 13% off that high. And, while 2018 as a whole is a year I'm not going to brag about, despite the turmoil in Feb/Mar and again in Oct/Dec, I finished it with a loss of around 6.9%.

I did make a few mistakes during that downturn, at the end of the year. I sold a few stocks at a loss, to get the tax break, and had planned on buying them back after 30 days, at reduced prices. Well, damn if just about every stock I did that with didn't suddenly shoot back up! This recovery was a lot quicker than I thought it would be. It wasn't a huge amount in the overall scheme of things, though. A rough guess is that if I had just left it alone, I'd be about 0.5% better off now. So, to put that in perspective...since the Christmas Eve bottom, my return now is about 25.1%. If I had just left those stocks alone, I'd be around 25.6%. I'm not going to cry over that, though.
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