Monday, September 15, 2008

With stock market bloodbaths, are you able to sleep well at night?

Here are the variances from the 52-week high to tonight's net-asset value for various broad-market indices and ETF's:

S&P 500: -24.36%
Russell 2000: -19.01%
Dow Jones Indus. 30: -23.55%
Vanguard Total Mkt: -22.69%

So how's our own lil Retiree's well-balanced, 100% nutritious, passively-allocated portfolio doing?

-5.07%.

All with a good solid basket of passively-mnaged funds which I haven't rebalanced since I constructed it more than a year ago.

Yes, my friends, we're doing nearly 5x better than the S&P 500-- and about 4x better than the total stock market.

And to think that the tasks I've been doing as "financial planner / analyst" managing the Retiree Portfolio once I constructed it include activities like, well, logging into the investment account see how it's doing.... watching the numbers.... taking numbers and posting the rare blog article about it.... logging out of same account.... wait a few weeks... rinse... and repeat... Yup. That's iabout all I've been doing-- stress-free, minimal management, and I'm beating the silliness out of the general stock market.

So I slept well last night and every night for at least the last 9 months (except for the occasional panic attack that my side project isn't going too well), knowing my carefully-constructed portfolio would hold up nicely. Today, I did wince for about 36 seconds when I saw the NAV for the Retiree Portfolio drop over 1.75% today alone. However, I breathed a sigh of relief when I compared it to the 5% beating the S&P 500 received today.

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