madsinger monthly report (February 2020)

[madsinger]

Here is a big fat collection of portfolios, with their fEBRUARY 2020 returns, 2020 YTD return, and annualized returns since 1999, 2010, 2015, and 2017 (21 years 2 months, 10 years 2 months, 5 years 2 months, 3 years 2 months). I broke them into four categories, roughly corresponding to 100/0, 80/20, 60/40, 40/60 stock/bond portfolios, sorted by 10 year Total Return. The 3 fund is 50/30/20 Total Stock/Total Int'l/Total Bond. The s&d is 10 each of VFIAX, VVIAX, VSMAX, VSIAX, VGSLX, 25 VTIAX, 5 VINEX, 20 VTABX. The coffeehouse is a 60/40 described at The Coffeehouse Investor. The Newsletter portfolios are from a newsletter following Vanguard funds. William Bernstein's "Sheltered Sam" is an all stock portfolio which is 20% VFIAX, 25% VVIAX, 5% VSMAX, 15% VSIAX, 10% VGSLX, 3% IAU, 5% each VEUSX, VPADX, VEMAX, and 7% VTRIX. The madsinger portfolio is my real-world portfolio, roughly 50/6/11/33 stock/REIT/Gold/bond. The madsingerPP portfolio is the "permanent portfolio" portion of my portfolio consisting of 25% each of stock, long bond, cash, gold.

-Brad.

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                                   CAGR    CAGR    CAGR    CAGR
                   Feb     YTD     since   since   since   since
                   2020    2020    2017    2015    2010    1999
VFINX             -8.23%  -8.27%  11.23%   9.34%  12.22%   6.13%
Hot Hands         -6.48%  -3.59%   7.41%   4.31%   9.41%  10.17%
Sheltered Sam     -8.24%  -9.89%   6.27%   5.99%   9.20%   7.27%
                  
Newsletter G      -7.21%  -8.60%   9.67%   8.00%  10.86%   9.33%
Newsletter G-IND  -8.06%  -8.80%   8.63%   7.44%  10.84%   6.81%
LS G              -5.77%  -6.42%   8.08%   6.27%   8.48%   5.46%
3 fund            -5.71%  -6.28%   8.29%   6.38%   8.20%   5.95%
s&d               -6.07%  -7.28%   6.05%   5.26%   7.87%   7.00%

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Newsletter CG     -5.44%  -6.20%   9.44%   7.83%  10.32%   8.00%
Wellington        -5.31%  -4.98%   8.37%   7.21%   9.18%   7.51%
STAR              -3.79%  -3.62%   9.15%   6.78%   8.41%   6.78%
coffeehouse       -4.29%  -4.45%   5.95%   5.24%   7.76%   6.83%
LS MG             -4.01%  -3.98%   7.40%   5.76%   7.51%   5.42%
                  
Newsletter Inc    -4.30%  -4.40%   9.60%   7.45%   9.38%   6.28%
Wellesley         -2.42%  -1.17%   6.88%   6.00%   7.72%   6.77%
LS CG             -2.21%  -1.52%   6.66%   5.16%   6.34%   5.13%
                  
madsinger         -3.62%  -3.27%   6.50%   5.25%   7.44%   
madsinger PP      -0.42%   2.76%   8.93%   6.00%      

[madsinger]

Well...that was interesting. After being up for the first 21 day of the month, and setting records, the stocks fell more than 10% in the final week.

As such, the portfolios were all down for the month, and all down for the year.

Well, almost all! The continued drop in long term interest rates (below 1% on the 10-year treasury) has shot the prices of long bonds up and up. At the end of February, long bonds were up over 14%. The -3% drop in gold on the last trading day of the month brought gold returns down for the month and brought the Permanent Portfolio down to a -0.42% drop for the month. But, the PP is still up +2.76% YTD, which is just the kind of reduced volatility one hopes for with four low-correlation asset classes making up the portfolio.

On Thursday, Feb 27, my "rebalancing band" was hit for Long Bonds, and I sold about 12% of that holding and bought US stocks. The next day, bonds were up even more, and stocks fell again. However, this was not a "market timing" move, but just an unemotional action based on one asset falling outside of its range. I'm content to make that move, and time will tell if it will be to my advantage!

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          STOCK  LONG BOND   SHORT BOND   GOLD     PORTFOLIO 
January  -0.04%    7.34%       0.95%      4.62%      3.19%
February -8.23%    6.37%       0.69%     -0.66%     -0.42%

YTD      -8.27%   14.19%       1.65%      3.93%      2.76%

[madsinger]

For the second time in 8 trading days, I have sold long bonds and bought US stocks to rebalance my portfolio. This is the fastest re-re-balance I can remember. In the past 8 days, long bonds are up over 12%, and US stocks are down over -8%. This "20%" deviation has caused another rebalancing band to be crossed. Of course, hindsight tells me that I should not have sold bonds and bought stocks last month, but my approach does not make predictions on the market, only tries to keep my allocation within my desired range, and I have done that.

Now, let's see what the next two weeks will bring...

-Brad.

[AE81]

Go Brad!