Balanced Portfolio and frustration of this market...

[COcheesehead]

Global Polo

[marko]

Quote:

Originally Posted by pb4uski Global Macro, not Global Marco

Quote:

Originally Posted by COcheesehead Global Polo

Hello. Did somebody call me?

[racy]

The market goes up, the market goes down. In the long run it has gone up more than it has gone down. I've tracked my portfolio's monthly balance for the past 400 months. 287 of those months have been better than the previous month. That's 72% of the total.
I'm not frustrated.

[jebmke]

Quote:

Originally Posted by racy The market goes up, the market goes down. In the long run it has gone up more than it has gone down. I've tracked my portfolio's monthly balance for the past 400 months. 287 of those months have been better than the previous month. That's 72% of the total. I'm not frustrated.

I just checked - my 45/55 portfolio is ahead of December, 2020; behind December 2021.

So, only one down year recently. Hard to get excited.

[OldShooter]

Quote:

Originally Posted by racy The market goes up, the market goes down. In the long run it has gone up more than it has gone down. I've tracked my portfolio's monthly balance for the past 400 months. 287 of those months have been better than the previous month. That's 72% of the total. I'm not frustrated.

This is all anyone really needs to know.

[audreyh1]

Quote:

Originally Posted by racy The market goes up, the market goes down. In the long run it has gone up more than it has gone down. I've tracked my portfolio's monthly balance for the past 400 months. 287 of those months have been better than the previous month. That's 72% of the total. I'm not frustrated.

Wow - over 33 years!

[marko]

Quote:

Originally Posted by OldShooter This is all anyone really needs to know.

+1
People need to repeat the mantra: "Over time". You'll go insane otherwise. Patience, grasshopper.

[target2019]

You don't need to collect numbers to see the varying outcomes. But I've enjoyed doing it for 33 years, 4 months.

The problem is not looking at your numbers too much. It's that some have no reference for their results.

Look at the big picture, maybe something like this: https://www.crsp.org/files/CRSP_Big_Picture_2022.pdf

[schellem]

My 86/8/6 is up 10% YTD, not complaining. I expect it to go up and down, take a little more risk if you want a little more return.

[JJpop]

Quote:

Originally Posted by COcheesehead Don’t invest in bond funds. No par, no static duration, redemption drag and you pay fees.

We are mostly invested in treasuries, brokered CD’s, I Bonds, some GO muni’s a few corp bonds and a couple MYGA’s.

Crazy as it sounds we are 98 pct fixed and love the stress free interest payments.

Our SS covers all of our basic needs.

What pct of your fixed is in individual corp bonds?

That is my dilemma now when things are maturing do I go for a 5 year corp bond rated A or AA or a lower yielding CD or treasury….

[COcheesehead]

Quote:

Originally Posted by JJpop We are mostly invested in treasuries, brokered CD’s, I Bonds, some GO muni’s a few corp bonds and a couple MYGA’s. Crazy as it sounds we are 98 pct fixed and love the stress free interest payments. Our SS covers all of our basic needs. What pct of your fixed is in individual corp bonds? That is my dilemma now when things are maturing do I go for a 5 year corp bond rated A or AA or a lower yielding CD or treasury….

I have about 70% of our portfolio in individual bonds. About 30% of our income comes from corporate bonds. I buy wide, but always investment grade.

[mikes425]

Quote:

Originally Posted by schellem My 86/8/6 is up 10% YTD, not complaining. I expect it to go up and down, take a little more risk if you want a little more return.

Nothing to complain about there😉

[mickeyd]

My AA is not unlike Op's. I am about 45/45/10. My average return now is about 6%-7%. Not a record breaker, but I sleep well.

OP...think long-term and get a good nite's sleep.

[mikes425]

Quote:

Originally Posted by mickeyd My AA is not unlike Op's. I am about 45/45/10. My average return now is about 6%-7%. Not a record breaker, but I sleep well. OP...think long-term and get a good nite's sleep.

Thanks from OP Mike... It's definitely been a challenging year in terms of expecting bond funds to offset the equity losses. Take a day like today- or most of the days of the last month or so give or take a few... Just hard to watch what seems to be total political brinksmanship seemingly being the primary component tanking or casting uncertainty on markets for no logical reason other than sheer manipulation. In my case I watch ultra short and ST bond funds go down in NAV (rates up) right along with major equity indexes when they plummet. As I say, it's frustration and hard not to notice this phenomenon. Given a fair amount of good economic news despite financial media BS, it doesn't add up. That said, yeah, i can only presume that this too shall pass. Eventually. It'd just be nice to have some idea when.

[foxfirev5]

As I age into the next phase of my life, doing nothing with investments is becoming easier. The LMP of Strips, TIPS and I Bonds allows the rest of the stuff to go untouched. Eventually I won't even need confirmation from investment forums.

[target2019]

Expecting bond funds to offset equity losses in a 50/50 portfolio?

When I examined data from the Backtest-Portfolio workbook, using TSM and TBM synthesized data, that did not happen in 11 out of 60 years.

If you use shorter term bond funds, I think there would be more failures.

What you are experiencing is the end of a long bond cycle coupled with high inflation.

[Montecfo]

True bonds do not usually "offset" equity losses. However they usually provide ballast.

Last year's bond debacle was well telegraphed as the end of cheap money. So most of the carnage was avoidable.

But for the buy/hold set and forget crowd it was the perfect storm.

[target2019]

For bond index funds I see there was a perfect storm in 2008 also. As you point out an individual bond would have provided more ballast than the buy & hold index fund last year.

So, with a bond you're improving ballast, but on a real return basis, what does it mean?

For the bond index I see improvement. With any index fund you're gonna get what the market gives. There are swings that are difficult for some investors, but those seem to be down-played until a sizeable decline gets your attention.

One thing's for sure, a paid advisor has advice for you that may just be what other advisers are saying.

[Markola]

Quote:

Originally Posted by target2019 Expecting bond funds to offset equity losses in a 50/50 portfolio? When I examined data from the Backtest-Portfolio workbook, using TSM and TBM synthesized data, that did not happen in 11 out of 60 years. If you use shorter term bond funds, I think there would be more failures. What you are experiencing is the end of a long bond cycle coupled with high inflation.

The way I read this, bond funds provide excellent ballast, as intended. A 2008 50/50 portfolio was down around 15% vs, what, at least 30% for a 100% stock portfolio?

I hear you about the end of the bond cycle. I’m being patient and am reserving judgment, because:

a) My 50/50 portfolio is hanging in there this YTD, and
b) I respect the Bogleheads and they, nor my Vanguard advisor are counseling any changes.

[target2019]

Quote:

Originally Posted by Markola The way I read this, bond funds provide excellent ballast, as intended. A 2008 50/50 portfolio was down around 15% vs, what, at least 30% for a 100% stock portfolio? I hear you about the end of the bond cycle. I’m being patient and am reserving judgment, because: a) My 50/50 portfolio is hanging in there this YTD, and b) I respect the Bogleheads and they, nor my Vanguard advisor are counseling any changes.

I was trying to address the OP's observations. The data was to make the point that bond index being able to offset equity losses is not 100% fact. As you say, it's ballast, which is probablly now better understood by OP.

I'm not endorsing the group, just using a spreadsheet with data I found on the site. There's really no advice in that, just another way to backtest and compare asset allocations.