The Conservative Portfolio fell -7.27% in October.
October was a month where there was, to quote Martha and the Vandellas, ‘nowhere to run to, nowhere to hide’. The S&P 500 dropped a whopping 16.8% – and would have been down far more were it not for the sharp 1,000+ point surge in the Dow during the last few days of the month. The S&P 500 is now lower than it was when we launched our model portfolios in April 2002. With this backdrop, we’re satisfied with our 27% to 71% since inception return range across our model portfolios.
We used the early weakness in the month to place trades in each model portfolio. Our trade alert went out on October 10th, a day on which the market closed lower than it did at the end of October. While the funds we bought generally did well, some of the closed end municipal and junk bond funds truly exhibited some wild moves up as investors suddenly noticed the ridiculous discounts these types of funds were trading at during the panic selling days of October. Please note our performance calculations here assume buying the funds from our trade at the end of October as we have done since we launched these model portfolios. Had we included the returns of these funds since the actual trade date, our published performance for each portfolio would have been significantly higher. Our closed end stock and bond fund picks were up around 5%, 18%, 24%, 36% and 51% since October 10th.
Unless you were shorting something, chances are you were down in October. Even government bonds – up until know the absolute best place to be during this bear market - were down as interest rates rose on fears endless government bailout initiatives will certainly result in higher interest rates. Normally the fear behind rising rates is inflation, this time it’s just supply and demand of bonds.
Fortunately we were shorting something in almost all of our model portfolios. The relatively conservative Nakoma Absolute Return (NARFX) was up 3.69% for the month because of a long/short portfolio, while more inverse leveraged short ETFs helped our more aggressive portfolios. We had two funds gain 50% in October, which helped offset the drops in our more traditional holdings. Only two of our portfolios fell by double-digits (Low Minimum down 11.34%, Growth down 12.03% the latter NOT including the 51% pop in Western Asset Managed High Income Fund [MHY]) – which should no longer be purchased until it trades at a steep discount. We’re most unhappy with a 5.3% drop in Safety, a portfolio that shouldn’t fall quite that far in a month – even a month where government bonds fell 3.5% and the stock market almost 20%. We moved into junk bonds a little too early here – a fund that was down just over 10% in October - and should have sold formerly white hot Janus Global Research.
Bill Gross was up to something in October. Harbor Bond (HABDX) was down just 0.09% for the month – suspiciously good performance relative to the bond market. This was among his best month relative to bonds in general– though he has done very well in this credit crisis.
Nakoma Absolute Return (NARFX) has delivered for our safer model portfolios and is a rare example of a fund that works in wild markets. Most funds fall, and most short funds are either crummy funds or achieve nothing investors can’t achieve merely selling down some regular ‘long’ funds. Nakoma was up 3.69% for the month as commodity related stocks collapsed.
Bridgeway Balanced BRBPX did a much better job than many funds that use options. The fund was down ‘just’ 6.15% for the month.
Healthcare has slipped along with all stocks but is still a slightly better place to be in this down market – a market that makes diversification almost completely irrelevant. Healthcare Select SPDR (XLV) was down 11.48% in October.
If you want proof the latest phase down in the market is being driven by foreign and commodity-oriented stocks, take a look at Janus Global Research (JARFX) which fell a sharp 22.24%.
Junk bonds fell almost as much as stocks as investors think defaults will surely climb by leaps and bounds as the economy erodes. Current yields on high yield bonds may never have been so high relative to the low default rate.
Metropolitan West High Yield (MWHYX) slid 10.57% for the month.
The Aggressive Portfolio fell -7.68% in October.
October was a month where there was, to quote Martha and the Vandellas, ‘nowhere to run to, nowhere to hide’. The S&P 500 dropped a whopping 16.8% – and would have been down far more were it not for the sharp 1,000+ point surge in the Dow during the last few days of the month. The S&P 500 is now lower than it was when we launched our model portfolios in April 2002. With this backdrop, we’re satisfied with our 27% to 71% since inception return range across our model portfolios.
We used the early weakness in the month to place trades in each model portfolio. Our trade alert went out on October 10th, a day on which the market closed lower than it did at the end of October. While the funds we bought generally did well, some of the closed end municipal and junk bond funds truly exhibited some wild moves up as investors suddenly noticed the ridiculous discounts these types of funds were trading at during the panic selling days of October. Please note our performance calculations here assume buying the funds from our trade at the end of October as we have done since we launched these model portfolios. Had we included the returns of these funds since the actual trade date, our published performance for each portfolio would have been significantly higher. Our closed end stock and bond fund picks were up around 5%, 18%, 24%, 36% and 51% since October 10th.
Unless you were shorting something, chances are you were down in October. Even government bonds – up until know the absolute best place to be during this bear market - were down as interest rates rose on fears endless government bailout initiatives will certainly result in higher interest rates. Normally the fear behind rising rates is inflation, this time it’s just supply and demand of bonds.
Fortunately we were shorting something in almost all of our model portfolios. The relatively conservative Nakoma Absolute Return (NARFX) was up 3.69% for the month because of a long/short portfolio, while more inverse leveraged short ETFs helped our more aggressive portfolios. We had two funds gain 50% in October, which helped offset the drops in our more traditional holdings. Only two of our portfolios fell by double-digits (Low Minimum down 11.34%, Growth down 12.03% the latter NOT including the 51% pop in Western Asset Managed High Income Fund [MHY]) – which should no longer be purchased until it trades at a steep discount. We’re most unhappy with a 5.3% drop in Safety, a portfolio that shouldn’t fall quite that far in a month – even a month where government bonds fell 3.5% and the stock market almost 20%. We moved into junk bonds a little too early here – a fund that was down just over 10% in October - and should have sold formerly white hot Janus Global Research.
Nakoma Absolute Return (NARFX) has delivered for our safer model portfolios and is a rare example of a fund that works in wild markets. Most funds fall, and most short funds are either crummy funds or achieve nothing investors can’t achieve merely selling down some regular ‘long’ funds. Nakoma was up 3.69% for the month as commodity related stocks collapsed.
Healthcare has slipped along with all stocks but is still a slightly better place to be in this down market – a market that makes diversification almost completely irrelevant. Healthcare Select SPDR (XLV) was down 11.48% in October.
Bill Gross was up to something in October. Harbor Bond (HABDX) was down just 0.09% for the month – suspiciously good performance relative to the bond market. This was among his best month relative to bonds in general– though he has done very well in this credit crisis.
The biotech boom has slipped along with the market but is still doing relatively well. SPDR Biotech (XBI) was down 11.04% - better than most growth stocks which were down about 17% in October.
If you want proof the latest phase down in the market is being driven by foreign and commodity-oriented stocks, take a look at Janus Global Research (JARFX) which fell a sharp 22.24%.
Sometimes our timing is impeccable and what actually happens matches our predictions. It is looking like we caught the top of the commodity bubble. We noted a few months ago “we could see a 50% plus return here soon”. Voila: DB Commodity Double Short ETN (DEE) rose a whopping 51.35% in October as oil and other commodities continued to collapse. We’re now up 158% in this leveraged inverse ETF – a major reason this portfolio has performed well compared to the market over the last year.
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The Conservative Portfolio fell -7.27% in October.
October was a month where there was, to quote Martha and the Vandellas, ‘nowhere to run to, nowhere to hide’. The S&P 500 dropped a whopping 16.8% – and would have been down far more were it not for the sharp 1,000+ point surge in the Dow during the last few days of the month. The S&P 500 is now lower than it was when we launched our model portfolios in April 2002. With this backdrop, we’re satisfied with our 27% to 71% since inception return range across our model portfolios.
We used the early weakness in the month to place trades in each model portfolio. Our trade alert went out on October 10th, a day on which the market closed lower than it did at the end of October. While the funds we bought generally did well, some of the closed end municipal and junk bond funds truly exhibited some wild moves up as investors suddenly noticed the ridiculous discounts these types of funds were trading at during the panic selling days of October. Please note our performance calculations here assume buying the funds from our trade at the end of October as we have done since we launched these model portfolios. Had we included the returns of these funds since the actual trade date, our published performance for each portfolio would have been significantly higher. Our closed end stock and bond fund picks were up around 5%, 18%, 24%, 36% and 51% since October 10th.
Unless you were shorting something, chances are you were down in October. Even government bonds – up until know the absolute best place to be during this bear market - were down as interest rates rose on fears endless government bailout initiatives will certainly result in higher interest rates. Normally the fear behind rising rates is inflation, this time it’s just supply and demand of bonds.
Fortunately we were shorting something in almost all of our model portfolios. The relatively conservative Nakoma Absolute Return (NARFX) was up 3.69% for the month because of a long/short portfolio, while more inverse leveraged short ETFs helped our more aggressive portfolios. We had two funds gain 50% in October, which helped offset the drops in our more traditional holdings. Only two of our portfolios fell by double-digits (Low Minimum down 11.34%, Growth down 12.03% the latter NOT including the 51% pop in Western Asset Managed High Income Fund [MHY]) – which should no longer be purchased until it trades at a steep discount. We’re most unhappy with a 5.3% drop in Safety, a portfolio that shouldn’t fall quite that far in a month – even a month where government bonds fell 3.5% and the stock market almost 20%. We moved into junk bonds a little too early here – a fund that was down just over 10% in October - and should have sold formerly white hot Janus Global Research.
Bill Gross was up to something in October. Harbor Bond (HABDX) was down just 0.09% for the month – suspiciously good performance relative to the bond market. This was among his best month relative to bonds in general– though he has done very well in this credit crisis.
Nakoma Absolute Return (NARFX) has delivered for our safer model portfolios and is a rare example of a fund that works in wild markets. Most funds fall, and most short funds are either crummy funds or achieve nothing investors can’t achieve merely selling down some regular ‘long’ funds. Nakoma was up 3.69% for the month as commodity related stocks collapsed.
Bridgeway Balanced BRBPX did a much better job than many funds that use options. The fund was down ‘just’ 6.15% for the month.
Healthcare has slipped along with all stocks but is still a slightly better place to be in this down market – a market that makes diversification almost completely irrelevant. Healthcare Select SPDR (XLV) was down 11.48% in October.
If you want proof the latest phase down in the market is being driven by foreign and commodity-oriented stocks, take a look at Janus Global Research (JARFX) which fell a sharp 22.24%.
Junk bonds fell almost as much as stocks as investors think defaults will surely climb by leaps and bounds as the economy erodes. Current yields on high yield bonds may never have been so high relative to the low default rate.
Metropolitan West High Yield (MWHYX) slid 10.57% for the month.
The Aggressive Portfolio fell -7.68% in October.
October was a month where there was, to quote Martha and the Vandellas, ‘nowhere to run to, nowhere to hide’. The S&P 500 dropped a whopping 16.8% – and would have been down far more were it not for the sharp 1,000+ point surge in the Dow during the last few days of the month. The S&P 500 is now lower than it was when we launched our model portfolios in April 2002. With this backdrop, we’re satisfied with our 27% to 71% since inception return range across our model portfolios.
We used the early weakness in the month to place trades in each model portfolio. Our trade alert went out on October 10th, a day on which the market closed lower than it did at the end of October. While the funds we bought generally did well, some of the closed end municipal and junk bond funds truly exhibited some wild moves up as investors suddenly noticed the ridiculous discounts these types of funds were trading at during the panic selling days of October. Please note our performance calculations here assume buying the funds from our trade at the end of October as we have done since we launched these model portfolios. Had we included the returns of these funds since the actual trade date, our published performance for each portfolio would have been significantly higher. Our closed end stock and bond fund picks were up around 5%, 18%, 24%, 36% and 51% since October 10th.
Unless you were shorting something, chances are you were down in October. Even government bonds – up until know the absolute best place to be during this bear market - were down as interest rates rose on fears endless government bailout initiatives will certainly result in higher interest rates. Normally the fear behind rising rates is inflation, this time it’s just supply and demand of bonds.
Fortunately we were shorting something in almost all of our model portfolios. The relatively conservative Nakoma Absolute Return (NARFX) was up 3.69% for the month because of a long/short portfolio, while more inverse leveraged short ETFs helped our more aggressive portfolios. We had two funds gain 50% in October, which helped offset the drops in our more traditional holdings. Only two of our portfolios fell by double-digits (Low Minimum down 11.34%, Growth down 12.03% the latter NOT including the 51% pop in Western Asset Managed High Income Fund [MHY]) – which should no longer be purchased until it trades at a steep discount. We’re most unhappy with a 5.3% drop in Safety, a portfolio that shouldn’t fall quite that far in a month – even a month where government bonds fell 3.5% and the stock market almost 20%. We moved into junk bonds a little too early here – a fund that was down just over 10% in October - and should have sold formerly white hot Janus Global Research.
Nakoma Absolute Return (NARFX) has delivered for our safer model portfolios and is a rare example of a fund that works in wild markets. Most funds fall, and most short funds are either crummy funds or achieve nothing investors can’t achieve merely selling down some regular ‘long’ funds. Nakoma was up 3.69% for the month as commodity related stocks collapsed.
Healthcare has slipped along with all stocks but is still a slightly better place to be in this down market – a market that makes diversification almost completely irrelevant. Healthcare Select SPDR (XLV) was down 11.48% in October.
Bill Gross was up to something in October. Harbor Bond (HABDX) was down just 0.09% for the month – suspiciously good performance relative to the bond market. This was among his best month relative to bonds in general– though he has done very well in this credit crisis.
The biotech boom has slipped along with the market but is still doing relatively well. SPDR Biotech (XBI) was down 11.04% - better than most growth stocks which were down about 17% in October.
If you want proof the latest phase down in the market is being driven by foreign and commodity-oriented stocks, take a look at Janus Global Research (JARFX) which fell a sharp 22.24%.
Sometimes our timing is impeccable and what actually happens matches our predictions. It is looking like we caught the top of the commodity bubble. We noted a few months ago “we could see a 50% plus return here soon”. Voila: DB Commodity Double Short ETN (DEE) rose a whopping 51.35% in October as oil and other commodities continued to collapse. We’re now up 158% in this leveraged inverse ETF – a major reason this portfolio has performed well compared to the market over the last year.