Balanced Portfolio and frustration of this market...

[Montecfo]

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.

Stock movements are not random. Stocks move generally higher over time as earnings grow.

Do we really need to cover this every single thread?

 

[target2019]

Yes, balances go up and down. Then there's those pesky interest rates replacing zero rate for a decade.

What did I forget to mention?

 

[OldShooter]

Stock movements are not random. Stocks move generally higher over time as earnings grow. Do we really need to cover this every single thread?

Gee, I don't know. You seem to be the one who can't read the words "first approximation." I will repeat my answer to you from a previous thread. Possibly you missed it:

You are correct. It is, however, a very useful first approximation to assume that short-term prices are random and it fits the results data very well.

In fact, the distribution of prices is fairly complex and unknown in its details.* Unlike a normal or Gaussian distribution it is asymmetric with fat tails; the tail to the left (downwards) is fatter than the right tail. This makes a standard deviation calculation mathematically meaningless despite its popularity.† Prices are path-dependent to a degree, too. This is why it is possible to identify small momentum effects. Path dependency is anathema to pure randomness. But, as you say, there is a long term upward bias. This is why buy and hold works. (and virtually nothing else does.)

...

---------------------------------------------
* Nassim Taleb has observed, amusingly, that if you do not know what a distribution is a priori, you cannot know how many samples are needed to characterize it. I recall a video (sorry not the link) where Eugene Fama bemoans the fact that he has only 100 years of data.
---------------------------------------------
† This is why we laugh at so many "100 year" floods, too. The erroneous assumption is that the weather is Gaussian.

 

[Markola]

So why is it so widely used?

For the same reasons people pay astrologists.

 

[Montecfo]

Gee, I don't know. You seem to be the one who can't read the words "first approximation." I will repeat my answer to you from a previous thread. Possibly you missed it:

No need for personal attacks. I can only assume you were not aware of the repetition.

 

[braumeister]

Squabbling will get us nowhere. Fast.

 

[Al18]

Some of us dumped our bond funds last year and replaced them with Treasuries, CD’s and individual bonds. The first two are very, very safe and it’s simply a matter of creating a ladder spread out over a number of years so cash is always available without withdrawing before maturity.

 

[Ultrac]

Jurrien Timmer on the MacroHive podcast March 2, 2022:

https://macrohive.com/hive-podcasts/ep-102-jurrien-timmer-on-sp-to-8000-ukraine-fall-out-and-bitcoin-allocations/

Listen from 20:40 for the next minute.

He makes the case for the S&P500 reaching 8000 in 2027 (18% CAGR).

Now, before I get any pushback, please be aware that he is the Director of Global Marco for Fidelity but go ahead and diminish him based on your bias.

 

[COcheesehead]

Jurrien Timmer on the MacroHive podcast March 2, 2022:

https://macrohive.com/hive-podcasts/ep-102-jurrien-timmer-on-sp-to-8000-ukraine-fall-out-and-bitcoin-allocations/

Listen from 20:40 for the next minute.

He makes the case for the S&P500 reaching 8000 in 2027 (18% CAGR).

Now, before I get any pushback, please be aware that he is the Director of Global Marco for Fidelity but go ahead and diminish him based on your bias.

March of 2022?

 

[pb4uski]

Jurrien Timmer on the MacroHive podcast March 2, 2022:

https://macrohive.com/hive-podcasts/ep-102-jurrien-timmer-on-sp-to-8000-ukraine-fall-out-and-bitcoin-allocations/

Listen from 20:40 for the next minute.

He makes the case for the S&P500 reaching 8000 in 2027 (18% CAGR).

Now, before I get any pushback, please be aware that he is the Director of Global Marco for Fidelity but go ahead and diminish him based on your bias.

Global Macro, not Global Marco

 

[COcheesehead]

Global Polo

 

[marko]

Global Macro, not Global Marco

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]

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]

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]

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]

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]

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]

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]

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]

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.