How did a 37% stock/63% bond Portfolio Perform During January’s Crash, Volatility and Rebound?

How did a 37% stock/63% bond Portfolio Perform During January’s Crash, Volatility and Rebound?

Is Mr. “Bear” Approaching?

IMG_1354

 or Retreating?

Nobody knows. It doesn’t matter either. Here’s why.

January was a month to either remember or ignore the stock and bond markets. Remember to stay calm and stay-the-course during market volatility and ignore the financial news. The following four tables are my Morningstar.com “Portfolio” printouts as it progressed each week during this volatile January. This report shows that 93% of investors lost money in January (https://insights.openfolio.com/over-93-of-investors-lost-money-in-january-6c934ea37e3a#.zb8wuwdpq).

The first week of January, 2016, was officially the worst start in stock market history for a new year–that’s quite an accomplishment. For years investors and the financial industry were wondering when the bear market will start. Many thought it started last summer but it had a recovery before the end of 2015. My portfolio was essentially flat for 2015. With oil prices continuing to plummet all the way down below $30.00, China’s economic woes, international stocks, especially emerging markets, the stock market crashed. But it didn’t stay down. It went up and down with a lot slower slide than what everybody was predicting.

My portfolio performed as it should and goes down when the market goes down and goes up accordingly. Thus, my portfolio lost almost $50,000 in value during the worst part in January before recovering during the last week in January, only down $20,000 from the beginning of 2016.


My portfolio at the end of 2015 had $1,520,000 in assets (Click for details).

 

First week: My portfolio after the close of the market on Friday, January 8, 2016.

2016 Jan 8 portfolio

I was down almost $30,000 that first week! (Note: the $5,248.96 in the table above was a dollar decline for the day, not the entire week).

 


Second week: My portfolio after the close of the market on Friday, January 15, 2016.

2016 Jan 15 portfolio performance

My portfolio decreased to a total of $42,000 lost!

 


 

 

Third week: My portfolio after the close of the market on January 20, 2016.

 2016 Jan 20 third week of crash

My portfolio decreased another $8,000 to almost $50,000 total.

 


 

Fourth week: Last day of trading for January 2016, the market went way up on January 29, 2016.

Every investment went up except the Money Market and iBond!

 2016 Jan 29 portfolio

     My portfolio at the end of January had $1,500,000 in assets. After all of the January volatility and the financial press appearing to be warning us that the “end is near,” I only lost $20,000 after being down $50,000.

     All of the financial authors that I follow (John Bogle, Rick Ferri, Larry Swedroe, James Dahle, MD, Bill Bernstein, MD, Dan Otter, Jason Zweig, Allan Roth, Scott Burns, Paul Merriman, and Bill Schultheis) will be proud of not what I did (except to construct a diversified portfolio with low cost Vanguard funds) but for what I did not do…I did nothing.

     I am a buy and hold, stick to my 37% stock/63% bond asset allocation plan, stay-the-course and ignore the news. My portfolio is boring. It’s what my late husband, Dan, and I have been preaching for over a decade.

 

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