Here's an update on the portfolio's performance. If you have missed my portfolio review for 2021, please check it out here.
2022 Performance YTD
My Portfolio: -13.64%
Vanguard 500 Index: -12.96%
Performance since inception (Jan 2021)
My Portfolio: -12.86%
Vanguard 500 Index: 11.85%
April has been an absolutely disastrous month.
For S&P 500, this is the worst month since March 2020 (the onset of the pandemic). For NASDAQ, this is the worst month since October 2008 (financial crisis). Just April alone, S&P 500 and NASDAQ fell 8.8% and 13.3% respectively. Given the spectacular rise of 26.89% for S&P 500 in 2021, the expectations of the gains have been muted. But such a drop of nearly 13% for the index this year YTD is probably one of the worst scenarios that most investors could expect.
Interest rates are expected to continue to rise amid inflation worries. The US economy has also shown signs of shrinkage as the GDP fell 1.4% (that happens for the first time since the pandemic started). In such conditions, the stock market is expected to continue its downward trends.
Even as the stock market is expected to continue its drop in the near future, I believes that it pays off in the long term to keep buying. You may check out this book titled "Just Keep Buying" released by a financial blogger (Of Dollars and Data) which I have been following. He provided very good reasons why it makes more sense to keep buying even when market conditions are not favourable.
If you are more than 10 years away from retirement, dismal market returns now might actually be better for you. Check this out.
(Source: Portfolio Visualizer)
The negative trends for ARKK, ARKG and MCHI continue. In fact, this is the sixth consecutive month that they have a negative return. The drops for ARKK and ARKG are of epic proportions. ARKK has a nearly 29% drop in April alone while ARKG isn't any better with a nearly 26% drop. This results in a -51% drop for ARKK YTD and -46% drop for ARKG YTD. While these ETFs perform much better than the average market during bull markets, they offer little protection in bear markets like this. This is also why it's important to keep the percentage allocation to them low and have other uncorrelated constituents in the portfolio.
All constituents in my portfolio have negative returns this month which explains a double digit drop in my portfolio in April.
The months ahead should continue to be difficult but I will continue to accumulate.
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