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The Passive-Aggressive Investor For 3/2-3/6

Mar. 09, 2020 3:49 PM ET2 Comments
Hale Stewart profile picture
Hale Stewart


  • This week, bond markets outperformed equity markets.
  • The core portfolio continues to hold up well thanks to its partial allocation to bonds.
  • I introduce a new conservative income-producing portfolio.

Let's begin with the economic and overall technical market backdrop.

Next, let's check on the weekly performance of the ETFs I track for this column:First, the overall numbers probably aren't as bad as you thought going in. The SPDR S&P 500 Trust ETF (SPY) was up modestly, as was the iShares Preferred and Income Securities ETF (PFF). Mid-caps dropped 0.79% while small-caps declined 1.32%. The international dividend ETF was the worst performer, and it was only down 1.76% - not bad considering the headlines over the last few weeks.

Let's take a look at the charts for the sectors, starting with the bonds:All the bond ETFs are in the middle of a solid rally, save for the PFF, which is more equity-like in its performance.All the equity ETFs are trying to consolidate after a sell-off.

Here's the performance table for the model portfolios: Data from Finviz; author's calculations. Green means an increase, while red means a decrease. The first number in the left column is the SPY/VEU percentage, while the second number is the TLT/BNDX percentage. If you're more conservative, opt for the higher TLT/BNDX percentage portfolio. If you're aggressive, reverse the process.

Once again, the overall performance shows the benefit of allocating the portfolio between across broad equity and bond market ETFs. The iShares 20+ Year Treasury

This article was written by

Hale Stewart profile picture
Hale Stewart spent 5 years as a bond broker in the late 1990s before returning to law school in the early 2000s. He is currently a tax lawyer in Houston, Texas. He has an LLM in domestic and international taxation (MagnaCumLaude). He is the author of the book The Lifetime Income Security Solution. Follow me on Twitter at @originalbonddadYou can read his legal analysis on his law office's blog.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Disclaimer: I don't have a relationship with any reader. This is not specific advice for anyone. Please read other authors and analysts who disagree with me. In other words - Buyer Beware.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (2)

6264541 profile picture

Building on your bnd,bndx,pff, and vym portfolio (port1), I tried a bnd,bnc,ief, and splv (equal weighted) portfolio (port2)
https://bit.ly/39MvkuV. It has all years with positive returns, better spread between upside capture and downside capture,

port 1 port2

Upside Capture Ratio (%) 23.85 33.76
Downside Capture Ratio (%) -5.48 17.82

It also has better performance in recent downturn using etfreplay backtesting.

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