Last shall be first, grade C

Last year’s laggards move to the front as the Nasdaq100 and Russell 20000 enter 10% correction territory. I open the year with an ugly -3.9% However, the SPY about doubles that decline, and IWM, QQQ are nearly triple. Considering we are only a few weeks into the new year, that’s ugly. 

Self grade is C.

Here are a few ETFs year-to-date 20222:

SLV silver 4.0%
EEM emerging mkt 0.3%
GLD gold 0.1%

TLT US20 yr -3.1%
SPY SP500 -7.8%

IWM Russell 2000 -11.4%
QQQ Nasdaq 100 -11.6%

Last year’s laggards have moved to the front, though US bonds only offered modest shelter during this storm.

Is this the big one? Ursa Major? The start of a secular bear market? We will only know in hindsight, but best have a portfolio that can weather a big storm if it comes. For my life situation, caution is the word of the day. I’m not about to take any big swings, because my history indicates that I tend to whiff a lot.

I dodged a bullet in NFLX. I sold Jan 400 puts and got out with a nice profit before the freefall after the earnings report. Obviously, if I knew, I would have bought puts and made bank. Timing is always difficult in real time, easy in hindsight.

Be careful out there. Happy Lunar New Year. It is going to be the Year of the Tiger. Let’s hope for a profitable year.

Year end wrap up, C+

My trading account is up 16.4% for calendar 2021. After -37% in 2020, a half a loaf gain is welcome. SPY and QQQ both were up much more, so the performance doesn’t feel great, so the self-grade is C+. The new normal is more cash reserves, smaller positions. Again, if someone had offered me +16 on January 1, 2021, I would have taken it. I’ll take the deal again, but as long time readers know, nothing is guaranteed.

Here are some etfs and their 2021 performance:

SPY SP500 27.0%

QQQ Nasdaq 100 26.8%

IWM Russell 2000 13.5%

GLD gold -4.2%

EEM emerging mkt -5.5%

TLT US20 yr -6.0%

SLV silver -12.5%

Again, my trading account +16.4%. It is worth nothing that precious metals, emerging markets, and 20 year Treasuries all had down years. Diversification didn’t help returns.

For those that believe markets in the “everything bubble,” some day they will likely be correct. But not this year. Their “safe” assets of bonds and gold didn’t do so well.

I wish I had something profound to write, or some boldly accurate predictions. Happy New Year one and all. Let’s hope it’s a good one.