pp4me wrote: ↑Tue May 19, 2020 4:32 pm
Yes, the PP is doing fine but the bet I made on the GB isn't looking so great. SCV is now the dog dragging the portfolio down. I don't even know how much because I don't want to look right now.
But I'm sticking with it because I think it will still turn out to be a good long term bet.
There's always a dog dragging the portfolio down - by definition. It was gold in 2013, for example. You have to look at it not as a dud asset to get rid of, but rather as a buying opportunity. And certainly not as a "bet". Betting is exactly what you don't want to be doing with your core investments.
The small cap losses make total sense because small businesses are being impacted much worse than large ones. I doubt very much that the small business model is dead though. It may take time, years maybe, but small business will come back. When that happens you'll realize that you bought a ton of SCV at fire sale prices. And that you sold gold and bonds at high prices in order to do it. What's not to like about that?
pp4me wrote: ↑Tue May 19, 2020 4:32 pm
Yes, the PP is doing fine but the bet I made on the GB isn't looking so great. SCV is now the dog dragging the portfolio down. I don't even know how much because I don't want to look right now.
But I'm sticking with it because I think it will still turn out to be a good long term bet.
There's always a dog dragging the portfolio down - by definition. It was gold in 2013, for example. You have to look at it not as a dud asset to get rid of, but rather as a buying opportunity. And certainly not as a "bet". Betting is exactly what you don't want to be doing with your core investments.
The small cap losses make total sense because small businesses are being impacted much worse than large ones. I doubt very much that the small business model is dead though. It may take time, years maybe, but small business will come back. When that happens you'll realize that you bought a ton of SCV at fire sale prices. And that you sold gold and bonds at high prices in order to do it. What's not to like about that?
Yep, in a buy and rebalance system the magic is in the forced buying low and selling high. Human psychology is setup to want to buy high and sell low. You see people struggling with this here and on bogleheads all the time. If people follow the rules of the system it prevents this from happening. It's not always easy to adhere to those rules though.
My GB was within a percentage point of flat when I rebalanced a few weeks ago, and since then it's up 3%. Mostly because the small cap value funds I held my nose and bought are up almost 10%.
In contrast, the "normal" three-fund portfolio in my gold-deficient 403b plan is down 4% YTD. Not too bad actually, but certainly easier to handle since I have the GB protecting those retirement accounts from my having to dip into them prematurely.
Cortopassi wrote: ↑Thu May 28, 2020 8:06 am
I have read quite a few times over the past couple months "The stock market is not the economy." What a perfect example.
Well put!!! It is almost mystifying what the market is doing. Perhaps it's gold that most accurately reflects the uncertainty - it's remained high, well over 1700.
Only 5% of the s&p index is airlines ,hotels , leisure ,restaurants and cruises ...they have little effect on the markets indexes.
25% is internet sales , online information services and social media .....
Plus layoffs go right to the company bottom line ...remember they don’t have to show profits ...they just have do do less bad than estimates...so Main Street and Wall Street have little in common early on