August performance update
Here with a performance update for August.
Prime: +1.86%
Select: -0.53%
SPY ETF: 2.01%
Bogleheads Portfolio (80% VTI + 20% BND): +1.74%
There was a lot of excitement about a potential “rotation” back toward value stocks (and small caps) at the start of the month. I don’t have a good sense of what the prevailing sentiment is now. Market participants are clearly very focused on the implications of the impending end to the latest rate hiking cycle, which Fed Chair Powell has made clear is happening now. All else equal lower rates obviously raises asset prices and facilitates economic activity generally, but “all else” is never equal and there are now at least some concerns about the prospective economic weakness motivating the rate cuts. Of note, though, Stoney Point’s model — the ingredients for which are various value indicators (some novel and some not) — performed very well in the year or so following the last round of significant rate cuts in 2020 at a time when underlying economic weakness was surely much more acute or at least uncertain, which you can see in the chart below.
(Admittedly it hasn’t done so well since!)
