So I took a look at my brokerage account today and now feel like I’ve been kicked in the gut. My index funds and various stock picks are all down ~15%. I’m not an active trader and usually buy in Vangaurd ETFs. Is there any strategy to this economy? I would like to think my constant dollar cost averaging will pay off with the down market, but it’s hard to imagine that when I see how much I’ve lost. I’m sure I’m not the only one here feeling this way. Is there any other semi passive investor who is doing the same thing or anything different? Regards
“I would like to think my constant dollar cost averaging will pay off with the down market, but it’s hard to imagine that when I see how much I’ve lost.” If you’re not going to average down in broad market ETFs when the market is off 15%, when exactly are you going to do it? When the market is up 35% TTM? Fear and Greed, son. Also, I always recommend naked puts.
To avoid the full brunt of market swings I typically shy away from index funds and hire active managers that have proven to protect capital during down markets. Long-term this has paid off for me. I stay well diversified by asset class and make some small to medium tactical bets if there is a compelling reason to do so. Long-term you are probably going to be OK plowing more money into equities right now but I wouldn’t expect some huge turn in the market for quite sometime. This deleveraging is going to take a while.
ditchdigger I am right with you, getting pretty beat up in this market but I’m sure most are. Anyhow I usually use etf’s as well and have some active bets but it does seem active funds can beat the market easier in a bear rather then a bull market, that being said I am a very long term investor so i am not too worried about and i think it will pay off in the l-t term if your asset allocation is throughly diversified (etfs vs active as well). just hold on it’ll come around but maybe getting into a couple active funds that can actively avoid problem sectors might be a good idea. O and how much are you down? I am comfortable losing 1/3+ in retirement funds and slightly less in my medium term accts, buffet always says if you can’t wether a 1/3 loss you should not be in the investment.
s23dino Wrote: ------------------------------------------------------- >> >buffet always says if you > can’t wether a 1/3 loss you should not be in the > investment. Nice. Now I don’t feel as bad with my portfolio down over 50%
I’m down about 15% in one portfolio and 20% in the other. The majority of it contains various index funds (equity, debt, international) and some stock picks. However, everything is down!
I have like a 90% exposure to China (solar, gaming, metals) and the other 10% is not doing great either. (one of the company just filed for bankruptcy) I think I have all of you beat in terms of under performance.
ZeroBonus Wrote: ------------------------------------------------------- > I have like a 90% exposure to China (solar, > gaming, metals) > > and the other 10% is not doing great either. (one > of the company just filed for bankruptcy) > > I think I have all of you beat in terms of under > performance. Should have done the double inverse.
Here’s my philosophy: No index funds. Fewer bets, but bigger bets. Do you homework. Stick by your analysis. Have confidence in your picks. Refrain from any suicidal thoughts. That being said, I’m NOT up for the year, but beating the S&P at least.
All cash circa Jan. Good luck all!
I can say that I am positive this year. By skill? No. I switched employers late last year and had to move everything over, which I just moved into cash. So it has been sitting in cash since then doing just great, and a small batch of NKE has held up ok so far as well. Sometimes luck is better than skill, in this case like 15% better…but I will take it.
my index fund is getting schooled… the only thing that seems to be doing ok is my Canadian Bond Fund. everything else is slowly dying.
Buffett’s tips are at the bottom, it makes me chuckle. http://www.minyanville.com/articles/index/a/11781
My 401k isn’t doing so great, but there’s time for it to come back. In my trading account, really loved my Fannie puts, but finally parted ways with them after a nice 300% ride
I was up for the year until about mid July - then began the month of pain where long gold, long oil, short dollar, short the market just wasn’t working (got slammed, in fact). I’m down just under 7% YTD now, after peaking at about +10%, but I am at least outperforming S&P by around 5% YTD. (Using S&P as my passive benchmark, but it’s not a perfect BM since I’m not really limiting myself to large cap domestic stocks). Lesons: 1) I think it’s time to develop a blended benchmark for myself to reflect more sensible asset allocation. S&P just isn’t enough by itself. 2) Even though what I practice is probably best described as global macro, and global macro tends to have fewer bets on at any one time compared to other strategies, I need to have more types of bets to diversify my risk, and reduce the exposure of each bet. But I must admit that there are relatively few high-conviction (long term) bets that I have right now. Time to renew my lapsed Economist subscription, I guess. 3) I think I know more than my longtime broker now, at least about the big picture. I’ve known him since I was maybe 10 or 11, but it may be time to (nicely) fire him.
American Century One Choice: Very Agg (AOVIX) Is anyone familiar with this fund? It’s historical performance looks pretty good compared to the S&P and my Vangaurd ETF’s. I’m looking to place a mutual fund in my personal account so I can utilize smaller more frequent buy ins rather than large bi/monthly buy ins. Unless someone has very awful things to say about this fund company or fund, I’m planning on buying in shortly. I’m a young person who has a high risk tolerance (i.e. 100% equities). However utilizing alternative investments is something I’m not very comfortable with or likely able to do per the compliance pre-clearance headache.
IIRC, Mutual Funds are long only by regulatory requirement, although they might be able to use limited derivatives for risk reduction, which means there might be an ability to short the whole market but not individual stocks. Aggressive funds usually have a high beta, which is something to consider. Since it’s a long term investment, the argument would be that you are dollar cost averaging in a downturn and that is good, particularly if you don’t know when the turnaround is. On the other hand, in a bear market, high beta stuff does really bad over the short term. Most traders and trend followers tend to think that even if you miss the bottom, it’s better to enter too late than too early, probably because bear markets tend to be shorter than bull markets (the world has tended to grow on average over the last 200 years), and because things tend to fall faster than they tend to recover. As for American Century, I recall reading that they were having troubles on the business side of their operations, and maybe some financial trouble too. I interviewed with someone there about two years ago but never heard back, but at the time, they were listed as one of the best companies to work for.
Get long the dollar. Go a 2.5x long dollar fund from Direxion Funds. Last time I checked, I was up on that trade near 10%.
have money not going to touch for 20+years… buy UYG, QLD, & RXL
I was pretty lucky this year. I was fairly active in my investments literally until the market peaked at the very beginning of the year. I needed some money to pay off some student debt so I liquidated about 90% of my trading account almost on top of the market. In between graduating and starting a new job this summer I have just started to deposit money back into my account. So I’m not to pissed about missing this year’s roller coaster ride. There are still some good sectors left in the market. I would have loved to short FNM or FNE.