April 2022 performance update
Friends, here with a monthly performance update. The key numbers are:
Prime: -1.21%
Select: -10.68%
SPY ETF: -9.11%
Bogleheads Portfolio (80% VTI, 20% BND): -8.29%
It goes without saying, but I am elated by this month’s results. As has been widely reported, it was the worst April for the U.S. stock market (as measured by the S&P 500) in 52 years. Discount rates continued rising sharply in the month, U.S. GDP declined, and the geopolitical crisis in Ukraine worsened. All told, trillions of dollars of notional financial asset value evaporated before our eyes. Against that backdrop, Prime mostly stayed afloat, falling negative only toward the end of the month, with the market as a whole performing nearly 9x worse. As I have said before, for a quasi-activist investor (even a model-driven one), volatility is a friend, as it is hard to beat the market when it is rising linearly in a low-volatility environment like 2021. The important point is that it is easy to achieve mechanically “amplified” market returns that go up more than the market when it is up and go down more than the market when it is down (e.g., through leverage). But it is very hard to beat the market on average when it is up and still outperform it when it is down.
Select fell along with the broader market, but a silver lining is that the gap between it at the Bogleheads benchmark widened somewhat. Let’s see what May brings.
