Moderate Portfolio "woes" ....

[mikes425]

Maybe just wanting to sorta compare notes with others in similar boats )

I am getting beaten up pretty bad lately on Small Cap ETFs which I added to pretty significantly earlier this year. Any thoughts on where this sector may be headed this year. Seems the outlook was better a couple of months ago. Not sure what's shifted so radically...

Meantime, ST bond fund performance continues to be puzzling this year. In particular for me, VCSH, SCHO and SHY Like last year, tho not nearly as drastically, these are still definite laggards in my roughly 50/50 AA PF. What's the likely outlook for these Funds going out say, 1, 2, 3 years from here? Their NAV losses in these exceeded all other holdings in '22, but i recognize it was also the worst year in bond history so, there's that.

I've not jumped to individual bonds only because i don't think, for the hassle and seemingly nominal impact it'll make that big a difference in the grand scheme of things vs holding, and hopefully recouping losses in the form of better DIV returns. I'm putting any cash into Schwab/SWVXX Value Advantage MM for now.

I'm getting about 80k a year in div income from this PF at it is composed now, and in no small part due to relatively large allocation to the bond funds and am pretty happy with that kind of return. If there's no overt reason to worry about these ST funds I'll leave them alone. Thanks as always for any thoughts!

 

[Happyras]

Hard to judge performance for you on just the dividend $ amount, but it would seem you should be doing much better. We have close to 2M in various bonds, cd's and t-bills with an average YTM of 5.1%. Our covered calls on SPY yield between 8 to 14%, we have very little in bare equities.

My thought is that small cap's can be very sensitive to interest rate and cost of cash flow, so until we see some relief and reason for growth, these will continue to suffer, maybe worse in the next 6 months. IMOH

 

[COcheesehead]

I am also getting about a 5.1% yield, but most of that is tax free and equates to about 2.5x the income total of the OP. I am in individual bonds.
I have a little devoted to small caps and I am down 1.28% YTD. I only have about 25% overall devoted to equities right now. I don’t see the value. Fixed income is paying the bills.
Overall my portfolio stands just about where it was when I retired in July of 2020.
The OP should be aware a lot of small/regional banks are considered small cap and are likely the reason for the battering.

 

[mikes425]

YTD actual returns - with abt. 2.5mm assets: Taxable acct: 2.5%, Roth: 3.4%
and i-401k, 2.7%.

 

[VanWinkle]

Small cap is volatile and you have to stick with it through the tough times. I also have some that I bought after tax loss harvesting during 2022. I looked for the most battered areas and they stood out. I am hanging on unless I can actually tax loss harvest again. At this time, I am about even on the extended market fund I own from Vanguard.

Wishing you good luck. I've found the more I try to change to catch things going up, I seem to hurt my returns. I've decided to be more patient and think long term.

VW

 

[target2019]

You seem to be reaping the asset allocation, as designed.

For a comparison, or benchmark, American Funds American Balanced Fund Class R-6 (RLBGX) is +3.29% year-to-date. That is actively managed for a 50/50 split.

When you slice-and-dice, you don't necessarily get what the market delivers. No one knows what your investments actually consist of, so comments are a wild guess.

Small/Mid Cap is lagging S&P 500 this year. When you look at average performance gain of the past, there's no guarantee you'll get that in any period in the future. Something to think about.

The changes you've made with your portfolio over the years is something to consider.