My Portfolio Review Under Stress YTD

[steelpony10]

       During market events, corrections and factual events, I chose a random time to check our three sections and check my long held assumptions. Todays the day for this one. During Covid at the end of March 2020 I got similar results but of course all were more severe. All the players are constant and I use Morningstar xray.

        1.Our 3 indexes as a whole have an average negative return of >13% of course it’s because they are tech heavy. VTI, the whole stock market and our main player, is down >9%.

        2. Our second section consists of leveraged CEF’s who have collectively distributed 8-9%/year for 12 years but demonstrate no growth of principle. The excess income to needs has been compounded at 10% (apparently) using monthly DCA, mostly reinvested into #1 adding to TR. They show a collective current negative return of >3%.

        3. Our safe haven, VWAHX, is down about <2%.

        4. My test basket of, HD, MMM, JNJ, CLX and MCD which I classify as core dividend stalwarts, are down >6%.

         For us it’s obvious CEF’s provide the most reliable and high monthly income, core stocks follow to a lesser degree, equities are the best when news is favorable and our safe haven works fine.

         Long term we will lean towards mostly CEF’s with equal smaller investments in VTI and VWAHX. 

[retiredat48]

Thanks steelpony.

A poster on Fidelity Forum just posted this re CEFs:



28m ago
PFN, like the other Pimco funds, has suffered from poor price performance. 1-year -11.00%, 3-year -0.91%, 5-year 0.0%, 10-year -2.54%. On a positive note, its price performance hasn't been as bad as other Pimco CEFs.

seekingalpha.com/symbol/PFN

It's total returns are OK: 1-year 7.15%, 3-year 9.96%, 5-year 9.58%, 10-year 11.79%.

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R48

Edited...poster has clarified the fund is PFN.

[steelpony10]

retiredat48 ,

        Thanks. PCN or PFN? We found PCN as a close second to PTY and PFN a close second to PFL.

        We’re only in CEF’s for the cash to supplement SS for monthly bills like a no COLA pension. Equities and the muni are backups to this and may be used for LTC. Neither one of us want to fiddle around with corrections or recessions after age 85. We have a slow change in progress and a ways to go.

[alvinthechipmunk]

This is very useful. Thank you. My own mix = down YTD -4.5388%. My HY bonds are proving to be a not-so-well-timed switch. 8% of portfolio. FR are doing well, at least holding their own. I must promise myself to check out CEFs in more detail. My anchor position, at 33% of total, is PRWCX, but I'm not leaving THAT one. PRWCX =down -6.52% YTD.) Not time to panic yet. Long way to go. Giroux is a smarty-pants.


PORTFOLIO:
T. Rowe Price US Treasury Money
T. Rowe Price US High Yield
T. Rowe Price Spectrum Income
T. Rowe Price QM US Small-Cap Gr Eq
T. Rowe Price International Discovery
T. Rowe Price Global Multi-Sector Bd Inv
T. Rowe Price Floating Rate
T. Rowe Price Capital Appreciation
Performance Trust Strategic Bond
Enel Chile SA ADR
Bruce

[Mustang]

For comparison, my simple portfolio is down 5.01%. My safe fund (Wellesley Income Fund) is down 2.00%. Returns are: 12-mo 11.25%, 3-yr 12.25%, 5-yr 9.93%, and 10-yr 10.10%.

I have not lost any money because I'm not selling. The market hasn't dropped enough for me to change anything. I'm still buying monthly using dollar-cost-averaging.

[Chahta]

I am down 4.4%. Bonds are holding the fort down and dare I say SCHY is too. Never any panic or worry. The time to worry was when I picked for long term. But still hurts to view it.

[retiredat48]

Jan 27, 2022 20:33:34 GMT steelpony10 said:

retiredat48 ,

        Thanks. PCN or PFN? We found PCN as a close second to PTY and PFN a close second to PFL.

        We’re only in CEF’s for the cash to supplement SS for monthly bills like a no COLA pension. Equities and the muni are backups to this and may be used for LTC. Neither one of us want to fiddle around with corrections or recessions after age 85. We have a slow change in progress and a ways to go.

Edited....fido poster corrected fund symbol to PFN.

For all readers...I have posted that I consider the best way to view high yield funds, and leveraged FI CEFs, is to assume the fund price may slowly DECLINE over time.  Use 1/2% to 1% annual decline.  Then subtract it from the annual yield, and you get your expected return, barring yield defaults.

There is an investment world mystery out there...it is: Why has Vanguards VWEHX High Yield Bond Fund, had its share price go from initial $10.00/share, to $5.79 today over many decades??  Decades of FALLING bond yields, which usually means rising bond prices.  You can speculate all the reasons, but Bogleheads have been trying for years to explain it.  Even Vanguard cannot provide an adequate explanation.

R48

[Chahta]

"There is an investment world mystery out there...it is: Why has Vanguards VWEHX High Yield Bond Fund, had its share price go from initial $10.00/share, to $5.79 today over many decades?"

retiredat48 , while it may be true (using VWEAX M* data back to 2001 @ $6.34), it has visted today's price 6 or 7 times in the last 20 years. To me that shows a well-managed fund to have NAV recovery and a good investment. To me nothing is worse than watching NAV slowly decline for good only to be made up by yield. All the more reason to buy in at a reasonable price, which some bond OEFs, PTIAX and PIMIX as examples, are starting to offer now at prices last offered in March 2020. I am sure they will get beat up a little more as rates keep increasing.

[retiredat48]

Jan 28, 2022 20:09:54 GMT Chahta said:

"There is an investment world mystery out there...it is: Why has Vanguards VWEHX High Yield Bond Fund, had its share price go from initial $10.00/share, to $5.79 today over many decades?"

retiredat48 , while it may be true (using VWEAX M* data back to 2001 @ $6.34), it has visted today's price 6 or 7 times in the last 20 years. To me that shows a well-managed fund to have NAV recovery and a good investment. To me nothing is worse than watching NAV slowly decline for good only to be made up by yield. All the more reason to buy in at a reasonable price, which some bond OEFs, PTIAX and PIMIX as examples, are starting to offer now at prices last offered in March 2020. I am sure they will get beat up a little more as rates keep increasing.

Agree, except I didn't mind that a slow NAV decline occurred, as long as total return was good.

I owned VWEAX for decades; it was a great performer.  Enabled me to retire early!

But I take some caution when big hitter bond guru's stop talking their book now, and state they would not own junk bonds/funds now.  Guru's like Jeff Gundlach and Rick Reider.  They state: not enough spread.  And with removal of the fed support of various bonds coming in a month+, it remains to be seen of what happens to prices.  Fed also stated their rollover of bonds will favor them keeping Treasuries in their balance sheet.  That's a backdoor way of saying they will be reducing corporate bonds and mortgages.

It's why I own zero junk bond funds currently.

R48

[Chahta]

Spreads are getting better everyday now with rising rates. 😂