The markets are doing interesting things. But in total, the basic 4x25 portfolio is doing great this year. Don't look at assets in isolation and mind your rebalancing if you are letting it get out of whack:
https://web.archive.org/web/20160324133 ... -of-chaos/
Remember that your portfolio is a package made up of very volatile assets. The assets may move in strong directions, but the overall portfolio value is all that matters in the end.
Don't focus on the waves causing the bobbing of the ship in the storm. Instead, focus on the direction the ship is heading.
The direction of the portfolio is still looking good so don't worry about it and mind your rebalancing bands.
Summer of Chaos!
Moderator: Global Moderator
Summer of Chaos!
Last edited by craigr on Thu Aug 04, 2011 7:20 pm, edited 1 time in total.
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pershing83
Re: Summer of Chaos!
What is the YTD return (as of today) on the classic pp, not PRPFX, which was down 2% today? To clarify, PRPFX was down 2% today.
Interestingly, for those of you who are nervous, one of my favorites, VWINX ,was down amere 18 cents today.
We may go thorough some trying times. I am nervous, BTW.
Interestingly, for those of you who are nervous, one of my favorites, VWINX ,was down amere 18 cents today.
We may go thorough some trying times. I am nervous, BTW.
Re: Summer of Chaos!
My Morningstar portfolio tracker is showing +7.61% YTD.
LT Bonds have exploded in price the past couple weeks. They are up +15%. Gold is about the same. Total stock market is now down -3.9% for the year. A standard 60/40 stock bond portfolio is now negative. Around -0.8% YTD.
But comparisons like this are short term. The direction of the portfolio is fine in total value terms which is the main point. It's easy to get nauseous looking at the individual assets. But only total portfolio value matters.
LT Bonds have exploded in price the past couple weeks. They are up +15%. Gold is about the same. Total stock market is now down -3.9% for the year. A standard 60/40 stock bond portfolio is now negative. Around -0.8% YTD.
But comparisons like this are short term. The direction of the portfolio is fine in total value terms which is the main point. It's easy to get nauseous looking at the individual assets. But only total portfolio value matters.
Re: Summer of Chaos!
It's nice to be able to sit back and not worry about all the market chaos. That's one of the reasons I decided to run a PP. This kind of chaos tends to happen at times when I'm distracted by other emergencies.craigr wrote: The direction of the portfolio is still looking good so don't worry about it and mind your rebalancing bands.
Before I invested in the PP, on days like this I would have to figure out whether to sell a stock because it hit a stop, or whether to stay with the stock because maybe (just maybe) it is all market noise and everything will be okay at by the end of the trading day (as happened during the Flash Crash) or the next day. All while dealing with all the other demands of life, some of them urgent.
With the PP, I don't have to worry about it at all. As long as I'm within the rebalance bands, I can sit back. If I'm in the mood for financial media Schadenfreude, I can watch CNBC for fun, not for "news."
Last edited by smurff on Thu Aug 04, 2011 11:10 pm, edited 1 time in total.
Re: Summer of Chaos!
Yeah these last few months have been a great live-fire exercise for the PP. The assets have worked exactly as designed, the portfolio is up, and I never broke a sweat despite major upheaval in the markets.
Re: Summer of Chaos!
I would say that really we have seen nothing but chaos since January when Libya and other countries in the middle east saw simultaneous revolutions begin to unfold. U.S. forces joined the fight in Libya soon thereafter with virtually no public discussion in the U.S. about the wisdom of this action.
The Greece fiasco also continued to unfold, as Ireland, Portugal and Italy began to get sucked in.
Japan's nuclear reactors melted down following a major earthquake and spewed enormous amounts of radiation over a large area.
Osama bin Laden was assassinated by U.S. forces that had illegally entered Pakistan.
Lots of other crazy things happened before summer even started.
It's just been a wild year, but you wouldn't know it looking at the PP's returns. Just nice and steady, like a clock in a thunderstorm.
The Greece fiasco also continued to unfold, as Ireland, Portugal and Italy began to get sucked in.
Japan's nuclear reactors melted down following a major earthquake and spewed enormous amounts of radiation over a large area.
Osama bin Laden was assassinated by U.S. forces that had illegally entered Pakistan.
Lots of other crazy things happened before summer even started.
It's just been a wild year, but you wouldn't know it looking at the PP's returns. Just nice and steady, like a clock in a thunderstorm.
Q: “Do you have funny shaped balloons?”
A: “Not unless round is funny.”
A: “Not unless round is funny.”