April performance update
Here with a performance update for April. Here are the key numbers:
Prime: -4.53%
Select: -3.08%
SPY ETF: -4.17%
Bogleheads (80% VTI, 20% BND): -4.01%
A bit of mixed month for our strategies, with Prime underperforming the SPY index somewhat, but Select significantly outperforming. Despite Prime underperforming SPY in monthly returns, the magnitudes were such that, mechanically, there was actually a bit of convergence in the cumulative returns since I started this (shown in the chart below), since a -4.17% is a bigger hit in dollar terms to SPY than -4.53% is to Prime given historical performance to date. Speculating a little, but, without looking closer at the data, my prior is that the relative performance of our strategies versus the market index feels correlated with sentiment toward the rate environment, which would not be altogether surprising. Lately, sentiment has trended toward a view that rate cuts are farther out in time than previously expected. It’s unclear how that will play out in the remainder of the year but we will see. If that theory is true, we should see quicker convergence when financial conditions loosen up a bit.
