Graphs and thoughts from HappyMan

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HappyMan
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Graphs and thoughts from HappyMan

Post by HappyMan » Tue Feb 25, 2020 1:41 am

Hi,

The Insurance Guy has been kind enough to let me post some of the graphs and thoughts that I have come across concerning S&P, momentum, and other market-related topics. I think it is time to start its own thread. Thoughts, reflections, and graphs are welcome. Not sure I can always provide the direct source because some of these come from a private network. I'll try to include a reference.
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Re: Graphs and thoughts from HappyMan

Post by HappyMan » Tue Feb 25, 2020 1:50 am

Here is an interesting piece of statistics in the light of yesterday's drop.

In the last ten years, there have been 242 days, when S&P dropped 1% or more. In the table, all the cases are spread over the days of a week. The spread is quite even, as one can see. The drawdowns are also somewhat even from -1,7% to -1,9%. What's noteworthy, is the number of days it took to recover to the previous high. On average, it took 23 days. One day stands out - Monday. If the index fell 1 % or more and it happened on a Monday, then the recovery usually took only seven days. Not sure if there is a rule and if it happens again this time. I just wanted to share here. Draw your own conclusions.
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HappyMan
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Re: Graphs and thoughts from HappyMan

Post by HappyMan » Fri Feb 28, 2020 3:15 am

If volatility disturbs your sleep, you need to re-evaluate your risk ratio. Claiming that they can handle 25-30% drawdown for long-term profit, some investors begin to panic at minus 10-15%. The attached table illustrates a simple thing: based on the previous history, what profit one should expect at different ratios of stocks and bonds and, most importantly, what kind of drawdown to expect. All the numbers are based on traditional passive portfolio "buy&hold".

Source: https://theirrelevantinvestor.com/2020/ ... -to-crash/
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Hal
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Re: Graphs and thoughts from HappyMan

Post by Hal » Fri Feb 28, 2020 5:12 am

Hello HappyMan,
If statistics interest you, take a look at belangp on YouTube.

https://www.youtube.com/user/belangp/videos
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Re: Graphs and thoughts from HappyMan

Post by pmward » Fri Feb 28, 2020 9:56 am

HappyMan wrote:
Fri Feb 28, 2020 3:15 am
If volatility disturbs your sleep, you need to re-evaluate your risk ratio. Claiming that they can handle 25-30% drawdown for long-term profit, some investors begin to panic at minus 10-15%. The attached table illustrates a simple thing: based on the previous history, what profit one should expect at different ratios of stocks and bonds and, most importantly, what kind of drawdown to expect. All the numbers are based on traditional passive portfolio "buy&hold".

Source: https://theirrelevantinvestor.com/2020/ ... -to-crash/
Technically those are not even the true "Max" numbers. Even here in the U.S. the Great Depression made a 50% drawdown look like a walk in the park.
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Re: Graphs and thoughts from HappyMan

Post by HappyMan » Tue Mar 10, 2020 3:29 am

I get a feeling some people could use a batch of positive statistics. Here it is. Yesterday was a Monday, and the S&P-500 index fell 7,6% in one day. In the table below, there recorded all the previous instances for the last 70 years, when the index dropped more than 5% on a Monday. Nine instances in total. In all the instances, the index grew back on the next day on average 4,2%. For longer timespans from one week to six months, the statistics also looks good. For example, in six months after a strong drop on a Monday, the S&P-500 index was higher in eight out of nine with an average of +12,75%.
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Re: Graphs and thoughts from HappyMan

Post by pmward » Tue Mar 10, 2020 5:29 pm

Up a hair under 5% today, so far that has played out perfectly.
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Re: Graphs and thoughts from HappyMan

Post by HappyMan » Tue Mar 31, 2020 1:43 pm

Fidelity shuts three Treasury funds to new investors

https://www.ft.com/content/c0bc0af1-8e8 ... 7a0a0d7248
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Re: Graphs and thoughts from HappyMan

Post by HappyMan » Thu Apr 09, 2020 12:10 pm

Here’s How 18 Different Portfolios Have Performed Since 1970

https://fourpillarfreedom.com/heres-how ... ince-1970/
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Re: Graphs and thoughts from HappyMan

Post by HappyMan » Sun Apr 26, 2020 6:29 am

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Re: Graphs and thoughts from HappyMan

Post by ochotona » Sun Apr 26, 2020 10:02 am

Factor investing? Find me an ETF that has a long enough, proven track record where it's actually better than market cap weighted. Something I can actually buy. I find only two of interest.

Equal weight S&P 500, ETF is RSP, the old Mutual Fund with a history is VADAX. A new, smaller but potentially better ETF is GSEW. VADAX kicks VFINX (Vanguard S&P 500 cap weighted) for its entire history, but not recently.

I like EEMV for Emerging Markets, as opposed to VWO or EEM. Better drawdown, better risk-adjusted returns. I'm going to use it... someday.

Other than those... I can't find any. I have looked at Invesco's FTSE RAFI ETFs, Schwab's Fundamental ETFs. Did I miss any?
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Re: Graphs and thoughts from HappyMan

Post by jalanlong » Thu Mar 25, 2021 7:06 am

The last month is a good example of why it may be prudent to skip market cap weighted stocks in favor of equal weighted. The major indexes are all slightly down while the equal weight 500 and midcap are up 2%. The total market indexes are so dominated by a few tech names that their potential to underperform when other stocks take off is very high IMO.
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