Great news! (tanks my portfolio every time)

[mikes425]

It's always frustrating...Days like this. I have an occasional FA and literally JUST got done with a consult where the recommendation was to basically change very little from my existing AA which is essentially 50/50. Well the main thing was adding big to Small Cap. On the FI side, that 50% is made up of mostly Short Term bond fund ETFs...and some longer duration... TIPS funds. like Schwab SCHP - - that is my biggest loser in my taxable account. So, a day like this comes along...where equities are up nicely... great jobs report... and I enjoy.... a big drop. Ok, not like, double digit percentage or anything but..still...it is just tough to continue to watch bond funds take a hit...after the carnage of the last year + in that sector.



Anyone else with a "moderate" PF feeling that pain? Just curious. For the last few years i've called it my "going nowhere" portfolio.

 

[UpQuark]

...Anyone else with a "moderate" PF feeling that pain? Just curious. For the last few years i've called it my "going nowhere" portfolio.

I felt that pain with my retirement target year fund, it was 50% bond funds, all long duration apparently.

After months of feeling the pain I sold it and have been putting the bond allocation portion of the money into actual bonds (not bond funds). Now my only pain is wishing I'd put more into equities.

 

[OldShooter]

The behavioral economists' research says that people who check their portfolios frequently have poorer results that those who do not. The theory is that we humans are very risk averse and because of this we tend to become pessimistic, remembering the "down" days more sharply than the "up" days. The result is that the frequent lookers tend to trade too much.

That generalization says nothing about your personal experience, of course. If you are typically down in up markets, measured over months or years, then maybe your investing strategy needs a look. Charles Ellis ("Winning the Loser's Game") and William Bernstein ("The Four Pillars of Investing") are both out with recent revisions that bring the stats and examples up to date. You might try one of those.

Another form of therapy might be to spend some time looking at quilt charts, which generally show that chasing sectors is futile. (https://www.callan.com/periodic-table/)

DW and I do just fine looking at our portfolio once a year.

 

[savory]

My portfolio skews to equities. But my bond portfolio is made up of bond funds that took the hits you identified in your post. I sold them all. With the guidance from people on this website, I decided to manage my bond portfolio myself.

I already did some buying on my own with CDs and some government bonds. I expanded that to corporate bonds and others. The secondary markets are still a bit confusing and I am still learning. Good people here have provided excellent and patient advice as has Fido.

I have yet to sell one of my holdings. That has simplified This my experience, perhaps at the cost of a better return. But I’m less concerned about that as I see this as money I do not want to lose and if the gain is less, I am ok. At least that is my current feeling.

 

[FLSUnFIRE]

The behavioral economists' research says that people who check their portfolios frequently have poorer results that those who do not. The theory is that we humans are very risk averse and because of this we tend to become pessimistic, remembering the "down" days more sharply than the "up" days. The result is that the frequent lookers tend to trade too much.

That generalization says nothing about your personal experience, of course. If you are typically down in up markets, measured over months or years, then maybe your investing strategy needs a look. Charles Ellis ("Winning the Loser's Game") and William Bernstein ("The Four Pillars of Investing") are both out with recent revisions that bring the stats and examples up to date. You might try one of those.

Another form of therapy might be to spend some time looking at quilt charts, which generally show that chasing sectors is futile. (https://www.callan.com/periodic-table/)

DW and I do just fine looking at our portfolio once a year.

I think I am one of the rare ones that isn't too afflicted, I just look at the market each day knowing my LNW follows it. I don't have an emotional reaction. I think 20+ years in accumulation mode I got excited by drops. Now that I'm FIREd, I only make one sale a year so my next transaction (div reinvest or in this case IRA and HSA) will be a purchase so down is good for me. The sale is 100% based on making it before end of the calendar year so no time for me to market time. I've been putting in a limit order in in Nov 10% or so higher and if it executes, great, if not I sell at market around Christmas.

Personally, I'm not interested in bond funds at all. Pretty much 100% equity but to the extent I do fixed it is individual securities that I can choose to hold to maturity and usually short term (Really managing my working cash/liquidity).

 

[marko]

The behavioral economists' research says that people who check their portfolios frequently have poorer results that those who do not. The theory is that we humans are very risk averse and because of this we tend to become pessimistic, remembering the "down" days more sharply than the "up" days. The result is that the frequent lookers tend to trade too much.

I check every evening and a few times during the day. I held on during the 2008 debacle (thanks DW!) and the recovery emboldened me almost to a fault. I might make a change every 18 months or so to take advantage of something "on sale" but that's it.

"The stock market is the only market where, when the price goes down, everybody runs for the door" Warren Buffet

 

[Jerry1]

My pain was similar. I gave the okay to move for my FA to Fidelity which required liquidating most of my holdings (all but the individual stocks). Well how nice for me that the liquidation happened on the day with the S&P went down by almost 2% (so I sold on the worst day in recent weeks) and then the market when rich back up the next couple days - but I'm liquidated so do not participate in the upswing. Hate to be this way, but now I'm hoping for a downturn next week when I have to reestablish my positions in the market. Ugh.

 

[pjigar]

The behavioral economists' research says that people who check their portfolios frequently have poorer results that those who do not. The theory is that we humans are very risk averse and because of this we tend to become pessimistic, remembering the "down" days more sharply than the "up" days. The result is that the frequent lookers tend to trade too much.

That generalization says nothing about your personal experience, of course.

I have proven myself over last 3 downturns to have done "NOTHING" despite looking at my portfolio every day! But yes, I hear you. Knee jerk reactions are very common. I can't remember how many times I have heard friends, neighbors, etc. asking me: Should I sell XYZ? (After price has been falling) or Should I buy XYZ (After a run-up). Answers to both are very simple in my mind: Buy (index fund) when you have extra money that you don't need for more than 5 years and sell when you need that money for any spending. Another valid reason for buy/sell is to balance and maintain AA. Trading for any other reasons is a futile excersize.

My reaction when market falls is to buy more but then again I don't have any money uninvested!

 

[Closet_Gamer]

I check every evening and a few times during the day. I held on during the 2008 debacle (thanks DW!) and the recovery emboldened me almost to a fault. I might make a change every 18 months or so to take advantage of something "on sale" but that's it.

"The stock market is the only market where, when the price goes down, everybody runs for the door" Warren Buffet

I try help my brother stay on task with long term investing but when the market goes down he starts into "I lost money, should I get out?"

When we look he is, invariably, up nicely life-to-date on his portfolio.

People struggle to realize that investment assets are just products. In this case they are products that produce money.

I try to explain it to him this way:

"You decide you want 30 sweaters to keep you warm during retirement, so you plan to buy one sweater each year. You've collected five sweaters when suddenly the store puts sweaters on a buy 1-get-1-free sale. Would you immediately stop buying sweaters until the sale ended because you're mad you didn't buy them when they were on sale, or would you think 'This is a really good time to buy sweaters. I should be buy an extra one right now.'?"

Six months later he will call and ask me if he should sell his sweater collection.

 

[target2019]

50/50 goes sideways for a while. Then it doesn't.

It's possible you'll feel pain from a comparison with a better-performing approach.

Welcome to the club.

 

[rk911]

I look at the portfolio is at the end of the month when I reconcile the various accounts in Quicken or when I get a transaction notice from our FA. I do chart our NW at the end of each week after updating the share prices of the various funds.

 

[jebmke]

My investing horizon is a bit longer than one day

 

[Stormy Kromer]

I started with a FA about 25 years ago. He set me up with 25% International. That has been an absolute boat anchor for 25 years.

Yesterday S&P is up over 1%. International Fund down .58%.

I know that is just one day's performance, looking back 25 years is just as bad...

In 2008 I started a Vanguard Account and have handily whooped my FA account using Total Stock Market Fund in my IRA's and Tax Advantaged Fund in my non-qualified account.

 

[target2019]

My recommendation just about everywhere is VTI, skip the international. YMMV.

 

[mikes425]

Wise perspectives here. Thanks. Bottom line is the long-game... Agreed. Those daily fluctuations are insignificant... but the financial media hype and noise is often hard to ignore...that and the kneejerk market reactions that are often fairly politically driven IMO. The fact that most of the bond funds I have are ultra to short term has yielded consistent and improved div income so its helpful to keep that in mind... i look forward to eventually seeing the NAVs on a number of these begin to turn around, as they represent the biggest disappointments in my mostly ETF/fund based PF...and are still carrying roughly the loss sustained last year and in 2022...when i failed to exit but rather, just shortened all durations.

 

[yakers]

I still have some stocks from the DRIP days (remember those) NC (non covered) so old, my largest single (stock) holding is WEC. I like the stock and have passed on shares to DS and DGS as they are lower tax brackets for CG. If the S&P/VTI is up and my account is down its invariably the WEC stock, but on many occasions the reverse is true. No plans to sell, will pass on to family or charity whenever. Overall happy with my portfolio, mostly VG balanced funds like Wellsley, Wellington and (largest) VG Global Wellington. I'm sure there are better portfolios but also many worse and these have worked adequately for me although it is miserable to see Wellesley under perform since I wanted VG to manage FI for me.

 

[audreyh1]

I stopped watching or listening to financial news years ago. It’s useless.

I’m 50/50, mostly index funds. Withdraw living expenses early Jan, rebalance as needed. Don’t pay attention to NAVs or individual fund performances. Sit on my hands almost all year.

 

[Al18]

There you go - listening to the consultant! Maybe you should change your asset location to 50/50 +/- 5 %. If you do decide to buy or sell funds, check how the market is doing that day and if it’s a flat day, put the order in at 3 pm

 

[mikes425]

My investing horizon is a bit longer than one day

This is the best perspective of course. Bonds had their worst downturn in market history. NAV $ shouldnt be the focus, For me they do comprise most of the FI portion of a roughly 50/50 AA for the most part and i don’t do market timing. Any wholesale change from bonds in general would mean a significant hit in dividend income. In my case that was about 100k for 2023. I dont think thr exercise of exchanging funds for individual bonds would have meant enough of a difference in return to bother so…it continues to be a “let it ride” proposition and i don’t see them achieving the same record volatility as 2022. I’m all for hearing positive
reinforcement on that outlook.

 

[OldShooter]

... but the financial media hype and noise is often hard to ignore ...

Really? I don't find it hard to ignore at all. In the rare event that I notice Jason Zweig's byline I will read what he has to say. Other than that I pay no attention.

The fact that someone is offering advice is prima facie evidence that the advice is no good. If it was good, he would be lounging beside the pool on his megayacht, not giving advice away for free or for a pittance.

 

[TheWizard]

There you go - listening to the consultant! Maybe you should change your asset location to 50/50 +/- 5 %. If you do decide to buy or sell funds, check how the market is doing that day and if it’s a flat day, put the order in at 3 pm

Alternatively, use ETFs with limit orders...

 

[TheWizard]

Really? I don't find it hard to ignore at all. In the rare event that I notice Jason Zweig's byline I will read what he has to say. Other than that I pay no attention.

The fact that someone is offering advice is prima facie evidence that the advice is no good. If it was good, he would be lounging beside the pool on his megayacht, not giving advice away for free or for a pittance.

I tend to agree with this.
I'll watch CNBC from time to time but I don't use their input to decide what to do with my investments...