Balanced Portfolio and frustration of this market...

[COcheesehead]

It's actually up to date....heres a calculator to play around with.....put in 10-20-30 year time frames....the numbers are astounding


https://www.officialdata.org/us/stocks/s-p-500/2000?amount=1000000&endYear=2022

Hey that uses CAPE. I thought that’s irrelevant.

 

[mikes425]

I think I hit a nerve. Lots of push back.

Dunno...wasn't really attacking that piece myself but....I will say i absolutely and positively hope, and tend to believe he's wrong, and that there will be at least moderate improvement, within 1-3 years. I'm not seeing grounds to dismiss that chance given that there's plenty of politically motivated market-manipulation and artificially inseminated negative spin aimed at undermining any and all economic positives. So all that aside, I'm optimistic.: )

 

[FREE866]

We live on the interest so there are no “withdrawals”. We earn 140% of our income needs from interest alone. That is one of the benefits of individual bonds. You earn interest and at maturity you get you money back.

Regarding inflation…you don’t buy bonds for inflation. It’s sort of like complaining that cars won’t fly. It’s not their intended purpose. Bonds are for income and can preservation.
I own other things for my inflation hedge.

Ha!...then you have SERIOUS boatloads of cash--congratulations--I mean that!


regardless, stock market is an incredible way to increase ones wealth....that calculator I posted above is hard data proof....problem, like Buffet says its about peoples behavior with the stock market that dooms them!

 

[FREE866]

Hey that uses CAPE. I thought that’s irrelevant.

??


No it doesn't...its historical performance of the S and P 500

 

[COcheesehead]

??


No it doesn't...its historical performance of the S and P 500

From the data set…

“As of September 2018, I now also include an alternative version of CAPE that is somewhat different”

 

[COcheesehead]

Dunno...wasn't really attacking that piece myself but....I will say i absolutely and positively hope, and tend to believe he's wrong, and that there will be at least moderate improvement, within 1-3 years. I'm not seeing grounds to dismiss that chance given that there's plenty of politically motivated market-manipulation and artificially inseminated negative spin aimed at undermining any and all economic positives. So all that aside, I'm optimistic.: )

I wasn’t talking about you.

 

[COcheesehead]

Ha!...then you have SERIOUS boatloads of cash--congratulations--I mean that!


regardless, stock market is an incredible way to increase ones wealth....that calculator I posted above is hard data proof....problem, like Buffet says its about peoples behavior with the stock market that dooms them!

Timing in the market is an important factor. Sequence of return risk is real. Some folks don’t understand that.
So many on here live by FireCalc and its results, but the concept is the very first thing discussed on the FireCalc page.

 

[FREE866]

From the data set…

“As of September 2018, I now also include an alternative version of CAPE that is somewhat different”

That sentence has zero influence on what the historical returns have been for the S and P 500


Calculator is pretty self explanatory. For some reason you're in some type of denial over this.

 

[mikes425]

I wasn’t talking about you.

No, I know, I was just adding my perspective. I mean, regardless of the NAVs, tho i suspect nowhere near your return, even holding the ST bond funds i have - even with their NAV losses - I'll receive about 82k in div. income this year, and I still work some. For me at 65 with Medicare commencing a few wks ago and, (if some psychotic politicians don't successfully F with that or SS, which I PAID for) I'll be fine, even without those benefits, according to FireCalc et.al.

 

[marko]

Never heard of the guy so I looked him up. He’s a technician. Technical analysis has long since been debunked by numerous studies. Its value is attested to by the fact that in thirty or so years Timmer’s expertise hasn’t made him enough money that he can leave his day job.

I actually know him. Not well but to say hello and small talk. He lives in my neck of the woods. As Diector of Global Macro, I'd say he's definitely not still working in order to put food on the table. I've seen his house from afar...he's doing alright.

 

[COcheesehead]

That sentence has zero influence on what the historical returns have been for the S and P 500


Calculator is pretty self explanatory. For some reason you're in some type of denial over this.

I know my numbers. I know what I need to earn to make my plan work. I have been investing for almost 30 years. I think I understand more than the average joe. Right now I see little compelling reason to put anymore into equities in the current environment when I can get 5%-6%+ in individual bonds considering the headwinds for the next 5-10 years. Yes the market over long periods will return more than bonds. One has to step back and decide is it worth the risk to gain a percent more - the current consensus on equity return going forward or does 5%-6% make your life great.

 

[COcheesehead]

No, I know, I was just adding my perspective.

And I appreciate that. Thank you.

 

[WhenIsItTime]

Hi, and sorry if this is a duplication of prior post(s) but i continue to be confounded and frustrated with my 45/55 AA portfolio performance, specifically the fact that ultra-short and short bond funds - which are my largest FI positions - continue to move "in tandem" with equities - and, lose NAV...just not as extremely as last year. Yes I have shifted some of my FI to MM funds for the safe 4-5% return..but maybe not enough? I have an hourly/occasional FA who bills me for questions and have raised this issue multiple times but he has only suggested reducing equity a bit and --adding proceeds to 1-3 yr Treasury or MM, plus reiterating that DIV returns are improving on bond funds. I am in fact on track to realize about 80k in interest/div. income for '23, an improvement over last year so, no complaints on that. However while I try to ignore the day to day, I can't help feeling like this is simply a "going nowhere" PF - largely due to bond funds selected for relatively low sensitivity to rising rates or credit issues only showing further downside this year and are certainly nowhere close to making up for last year's losses, collectively. Above all, seeing these 'ballast' vehicles move down significantly "together" with equities on down days frankly angers me more and more. I'm sure there may be some macro picture i'm not appreciating fully about this but with multiple positive economic signals, the volatility seems tied to market manipulation- politically motivated or otherwise.

Happy to get any thoughts about when this 'trend' may turn around. or from others in the same boat who share my sentiments. At least i can get a reality check if i'm "not the only one" experiencing this frustration in what is traditionally considered a defensively allocated PF. Thanks for letting me vent and don't beat me up if i'm missing 'the obvious' but it just isn't all 'adding up' logically on many levels. Or maybe..it's just a balanced portfolio reflecting a flat "going nowhere" market for a year or two.

I have never been a big bond guy. I was in some bond funds and suffered the fund downside. Given current situation, I'm now in MM for 3 yrs liquidity and mostly stock(s) otherwise. I am fortunate to have a low wd rate.

With that said, it is interesting in FireCalc how AA can have big swings and not significantly affect outcomes.

 

[FREE866]

I know my numbers. I know what I need to earn to make my plan work. I have been investing for almost 30 years. I think I understand more than the average joe. Right now I see little compelling reason to put anymore into equities in the current environment when I can get 5%-6%+ in individual bonds considering the headwinds for the next 5-10 years. Yes the market over long periods will return more than bonds. One has to step back and decide is it worth the risk to gain a percent more - the current consensus on equity return going forward or does 5%-6% make your life great.

Im not telling you to buy more stocks. You said my data was outdated--that calculator shows it is not. As I said earlier, you sound set-congrats!


And I pay no attention to "consensus" on anything, esp not stock market predictions. These talking heads on TV are a complete joke for the most part.

 

[COcheesehead]

Im not telling you to buy more stocks. You said my data was outdated--that calculator shows it is not. As I said earlier, you sound set-congrats!


And I pay no attention to "consensus" on anything, esp not stock market predictions. These talking heads on TV are a complete joke for the most part.

The projections for 7% are from the major brokerages. I don’t watch financial news and haven’t for years. It’s entertainment, not education.

 

[COcheesehead]

I have never been a big bond guy. I was in some bond funds and suffered the fund downside. Given current situation, I'm now in MM for 3 yrs liquidity and mostly stock(s) otherwise. I am fortunate to have a low wd rate.

With that said, it is interesting in FireCalc how AA can have big swings and not significantly affect outcomes.

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

 

[FREE866]

The projections for 7% are from the major brokerages. I don’t watch financial news and haven’t for years. It’s entertainment, not education.

Yeah, and the major brokerages are just as clueless...trust me...I worked at a couple of them lol


7% hahaha.....they pretty much always say 7-8%....its a "safe" prediction and they mostly all follow in step....."cautiously optimistic" and every other buzzword phrase the PR dept comes up with.....it's a joke....

 

[COcheesehead]

Yeah, and the major brokerages are just as clueless...trust me...I worked at a couple of them lol


7% hahaha.....they pretty much always say 7-8%....its a "safe" prediction and they mostly all follow in step....."cautiously optimistic" and every other buzzword phrase the PR dept comes up with.....it's a joke....

I wish you the best. We have a unique opportunity now. Some see it, some don’t.

 

[Montecfo]

The projections for 7% are from the major brokerages. I don’t watch financial news and haven’t for years. It’s entertainment, not education.

Folks have been projecting tepid future stock market gains since at least 2014-15. I recall figures like 4-6 % over the next 5-10 years being grimly forecast. Equity markets have been around double that fortunately.

That does not mean the next 5-10 won't be low. The best predictor is current PE at start of prediction and the interest rate environment.We remain historically high there so could be right this time, especially with dramatically higher government debt. But then I interest rates are likely to fall from here so maybe that cuts the other way.

And I may tweak things or become more defensive at some point but I am mainly taking what the market gives.

That includes extending bond terms while rates are attractive which I have done.

 

[COcheesehead]

Folks have been projecting tepid future stock market gains since at least 2014-15. I recall figures like 4-6 % over the next 5-10 years being grimly forecast. Equity markets have been around double that fortunately.

That does not mean the next 5-10 won't be low. The best predictor is current PE at start of prediction and the interest rate environment.We remain historically high there so could be right this time, especially with dramatically higher government debt. But then I interest rates are likely to fall from here so maybe that cuts the other way.

And I may tweak things or become more defensive at some point but I am mainly taking what the market gives.

That includes extending bond terms while rates are attractive which I have done.

Exactly what I have done.

 

[Markola]

Never heard of the guy so I looked him up. He’s a technician. Technical analysis has long since been debunked by numerous studies. Its value is attested to by the fact that in thirty or so years Timmer’s expertise hasn’t made him enough money that he can leave his day job.

No opinion on Timmer but I like the saying, “Technical analysis is just astrology for men.”

 

[COcheesehead]

No opinion on Timmer but I like the saying, “Technical analysis is just astrology for men.”

So why is it so widely used?

 

[mrfeh]

Or maybe..it's just a balanced portfolio reflecting a flat "going nowhere" market for a year or two.

This.

Stop watching the market so closely and think about returns over years, not months.

 

[eytonxav]

I used to look at my port weekly, but have stopped looking so frequently and find I worry less and it also prevents me from making stupid changes.

 

[OldShooter]

No opinion on Timmer but I like the saying, “Technical analysis is just astrology for men.”

So why is it so widely used?

Easy. For the same reason that stock picking is pushed and that we have ubiquitous punditry. The purveyors of this nonsense have found that they can make money by pushing it.

It's a heavy lift to be sure (or at least it was for me) but once one realizes that randomness is an excellent first approximation to short-term market behavior, the reason for these pathologies becomes clear: No one can predict random.