And if you make more reasonable assumptions about investing like you didn't lump in at the absolute peak and just sit there and watch it ride.I take risks in my equity portfolio, not my bond portfolio. If you want to do the latter, be my guest.
yes, an enormous 8% portfolio-wide underperformance vs STT since lumping into LTT at their peak 4 years ago.
If one is freaked out by that short-term performance, what will one do when most of their portfolio goes down the drain the next time the equity markets crash.
8% of 20% of the bond portfolio means that's a 40% underperformance on the bonds alone. Pretty ugly!
(Cue scene from Monty Python and the Holy Grail where the Black Knight gets his arms cut off. "It's just a flesh wound!")
Like you bought when the bonds were expensive in 2019,
you have a big value tilt because you're not a US total market only and chill investor,
because you're an accumulator you throw $50 a month toward your 10K starting portfolio,
and because you know you have a portfolio with some volatile components that usually don't move in lock-step, you use 5/25 rebalancing rules to stay on course. Suddenly being exposed to long duration during perhaps the worst short term period for bonds since the mid-19th century only causes you to "underperform" the best performing bond component (intermediate term) by less than 0.7% total after 5.5 years. Not exactly bleeding from your arteries, and you will live to fight another day.
Statistics: Posted by slicendice — Thu Oct 17, 2024 1:26 am