EU-PP and PPeers

[frugal]

Hi my friends,

how are you handling this fall of the markets?

Will you rebalance soon or you are waiting ?

What do you advise ? Wait some weeks for rebalancing?

Thank you!

[pmward]

I have already rebalanced and I know one or two others have, and a couple more have their fingers on the trigger ready to pull any moment. I'm also prepared to rebalance again if stocks continue to plummet. I have no worries, but a lot of people do. To those that are squeamish about rebalancing, consider doing a DCA style rebalance instead of all at once. You could do something like rebalance 1% every week until you come back into balance. The worst thing one can possibly do is miss the opportunity to rebalance altogether. Even if the market continues down after rebalance, you will still be better off long term having rebalanced.

[Vil]

Guys,

A stupid question, if the all-down market continues, what is the bottom that will make you sell it all and move to cash ? 70% down, 80% down, never ? I do not want to explicitly mean that a truly diversified PP should have toilet paper and conserved food components, but still I guess you have some level of tolerance on contemplating how your hard earned money evaporate ... On the other hand, I know (logically wise) it *is* the worst idea in the world (selling low)..

[Kike Moreno]

I will stick to my plan, so I will rebalance (if needed) at the fixed date that I decided that I would check the portfolio every year, and using the rebalancing bands that I decided.

[dualstow]

It is indeed the worst idea, Vil. I am logical, so "bottom" and "sell" don't come together in the same thought or sentence.
I didn't capitulate in '09 and was rewarded for it. Lots of dividends and profits spent, and I'm still up despite the market cratering this year.
So my answer is Never.

[pmward]

There is no level I would sell it all and move to cash. I'll keep rebalancing and participate in the recovery, regardless how long the recovery takes.

[KevinW]

I will stick to my plan, so I will rebalance (if needed) at the fixed date that I decided that I would check the portfolio every year, and using the rebalancing bands that I decided.

+1

[Vil]

Guys,

Can someone from the US PP implementors share his numbers since beginning of 2020 ?
I am wondering what your numbers are compared to mine (I may have an explanation already if the numbers differ..). Here it goes for me:
Allocation = 25% ESD (thats S&P 500), decrease by 25.91%
Allocation = 50% US7 (thats small barbell with 7 and 10 yr US Treasuries, in other sense a bullet), increase by 4.55%
Allocation = 25% GOLD, decrease by 4.54%

Thanks in advance !!

[tarentola]

Figures for today (ETFs traded in Paris) and on 1 Jan 2020, with difference %.

Vanilla EU PP in Euros:

CEU 166.78 245.32 -32.02%
MTH 131.00 125.16 4.67%
GBS 131.08 127.04 3.18%
C13 168.09 168.61 -0.31%
Combined -6.12%

EUR/USD 1.0673 1.12375 -5.28%

The vanilla US PP in dollars seems to have done better:

SPY 228.80 321.86 -28.91%
TLT 159.43 135.48 17.68%
GLD 140.11 142.90 -1.95%
SHY 86.49 84.63 2.20%
Combined -2.75%

Gold did better in Euros presumably because of dollar strength. Long bonds did a lot better in the US, and even the US 1-3 year bond ETF SHY gained 2% this quarter.

[Vil]

Thanks, tarentola, appreciated.

[frugal]

Figures for today (ETFs traded in Paris) and on 1 Jan 2020, with difference %.

Vanilla EU PP in Euros:

CEU 166.78 245.32 -32.02%
MTH 131.00 125.16 4.67%
GBS 131.08 127.04 3.18%
C13 168.09 168.61 -0.31%
Combined -6.12%

EUR/USD 1.0673 1.12375 -5.28%

The vanilla US PP in dollars seems to have done better:

SPY 228.80 321.86 -28.91%
TLT 159.43 135.48 17.68%
GLD 140.11 142.90 -1.95%
SHY 86.49 84.63 2.20%
Combined -2.75%

Gold did better in Euros presumably because of dollar strength. Long bonds did a lot better in the US, and even the US 1-3 year bond ETF SHY gained 2% this quarter.

TARENTOLA my friend,

how are you?

Why do you use C13 and MTH ?

Un saludo.

[tarentola]

Frugal

Why do you use C13 and MTH ?

C13 is an ETF of 1-3 year bonds, and MTH is 25+ year bonds, the longest-bond Euro ETF I can find. If you have other suggestions I would love to hear them.

CEU is the MSCI Europe index ETF, but there is also the Eurostoxx 600 as well as individual country ETFs like DAX for Germany and CAC for France. For gold, next time around I would probably use SGOL (Swiss Gold) instead of GBS.

PS I guess the US bond funds do well in times of market crashes as (a) they are in dollars which is a currency of refuge and (b) they are US Govt bonds which are regarded as very secure. However in the longer term, the Euro and Dollar PPs have performed similarly in recent years (from memory).

PPS as I write, I see that Gold's time may have come: up 4% yesterday and 2% in Europe this morning. Vive le PP !

[frugal]

Frugal

Why do you use C13 and MTH ?

C13 is an ETF of 1-3 year bonds, and MTH is 25+ year bonds, the longest-bond Euro ETF I can find. If you have other suggestions I would love to hear them.

CEU is the MSCI Europe index ETF, but there is also the Eurostoxx 600 as well as individual country ETFs like DAX for Germany and CAC for France. For gold, next time around I would probably use SGOL (Swiss Gold) instead of GBS.

PS I guess the US bond funds do well in times of market crashes as (a) they are in dollars which is a currency of refuge and (b) they are US Govt bonds which are regarded as very secure. However in the longer term, the Euro and Dollar PPs have performed similarly in recent years (from memory).

PPS as I write, I see that Gold's time may have come: up 4% yesterday and 2% in Europe this morning. Vive le PP !

DBXG and IBCL
check it and tell me.

[frugal]

Frugal

Why do you use C13 and MTH ?

C13 is an ETF of 1-3 year bonds, and MTH is 25+ year bonds, the longest-bond Euro ETF I can find. If you have other suggestions I would love to hear them.

CEU is the MSCI Europe index ETF, but there is also the Eurostoxx 600 as well as individual country ETFs like DAX for Germany and CAC for France. For gold, next time around I would probably use SGOL (Swiss Gold) instead of GBS.

PS I guess the US bond funds do well in times of market crashes as (a) they are in dollars which is a currency of refuge and (b) they are US Govt bonds which are regarded as very secure. However in the longer term, the Euro and Dollar PPs have performed similarly in recent years (from memory).

PPS as I write, I see that Gold's time may have come: up 4% yesterday and 2% in Europe this morning. Vive le PP !

Is it you C13 in BORSA ITALIANA?

SGOL is an ETF in USA?

Do you think we should mix USD and EUR etf's?

Regards!