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Hmmm. I had a fantastic day. Made up for yesterday's disaster. But I've been out of bonds since June. Cash seems like place to be until Fed figures out how to unwind this experiment. Looking to get back in. Just not sure it's time yet. But, sorry about your sucky day.
Glancing at the bond ETFs...bad day indeed. So, if it makes you feel any better, you had a lot of company today.
Reply to @DavidV: Looks like many foreign currencies are getting slammed against the Doller this week. The European Central Bank cut rates yesterday, which weakens their currency, while rates spiked up sharply here this week, strengthening the Dollar even further. All my international funds (both equity and bond) have taken hits. The results are quite erratic from fund house to fund house however. I've concluded this probably reflects the degree of currrency hedging, if any, different houses employ for their non-Dollar denominated assets. The less hedged their currency risk is, the harder the hit to their international holdings. In addition, those with more exposure to emerging markets have likely been hit somewhat harder. Things should even-out over time if that's any consolation. Per scripture: "This too shall pass."
Couldn't help noticing that almost none of my funds gained as much today as they lost yesterday, which I've also noticed on other occasions when big gains followed big losses. The DOW and S&P both finished at or slightly above previous levels. Perhaps it's revealed in broader indexes (indices?) or due to the failure of the NASDAQ to recover completely?
I only gained back about 60% of what I lost on Thursday. In comparison, the Lipper Balanced Index gained back about 85% of what it lost. I have noticed that on big down days, for me, it does not seem to come back as fast as it went away. In any event, I trailed my bogey on the rebound which I expected which I believe is due to the large cash position that I am currently holding. It seems, on down days I am beating my bogey and on up days it is beating me at this period of time. So, the large cash position seems to be acting much like a shock absorber of sorts and somewhat cushions the fall.
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Glancing at the bond ETFs...bad day indeed. So, if it makes you feel any better, you had a lot of company today.
Any idea why?
I partially substituted bond funds with income funds. BERIX is up today and it was OK the whole year.
Skeeter