VTS Total Portfolio performance through Q2

VTS Community,

We're officially halfway through the year and our performance for the VTS Total Portfolio Solution has been updated on the website.

January through June 2024:

VTS Total Portfolio Solution:  +14.03%

VBINX (60/40 stocks bonds) benchmark:  +3.68%

2024:  Tech vs the rest

It's actually been a pretty strange year so far, with a massive disconnect between a handful of high flying tech stocks that are rocketing, vs the rest of the market and most other various asset classes.  This disconnect is very apparent when you view the large caps vs mid or small caps.  Huge performance difference between them, demonstrating that the star of the show by far are the mega caps and anything not at or higher than a trillion market cap is not getting much love.

Nasdaq QQQ  vs  Small Caps IWM

Bonds are still terrible

Another standout that is very impactful on the vast majority of investors portfolio performance is the fact that bonds are down again this year. 

The 20-year Treasury ETF TLT is down -7.18% through Q2 2024, which is a -46.72% drawdown since it's peak in 2020. 

This doesn't really affect us as we've moved away from bonds for a few years now, but remember, the size of the global bond markets are actually larger than the global stock markets.  This means the vast majority of investors still have significant allocations to something that is in a massive drawdown, and most investors don't feel like they are participating in this latest rise in the stock market.

Now this isn't anything new, the underperformance of the financial industry has been going on for decades which was the original catalyst for me sharing my own work.  However, the same point still stands today.  Traditional buy & hold investing with a portfolio of various asset classes is dead.

Investing is a marathon, not a sprint

One of the reasons I don't continuously post performance and brag about good periods is I don't think it's helpful for investors to focus on the short term.  Sure it's nice to have a good run and see the account grow, but that's not what gets people to the retirement finish line.

Successful investing takes place over multiple decades

The great investors of the world are not the ones that put up solid numbers for a couple years during a bull market.  To be honest, that's not overly difficult to do if they just add risk. 

The true elites of this investing game are the ones that navigate all market environments and show growth over multiple decades through multiple bull and bear market phases.

I also do very well during bull markets, but I don't advertise that because it's not my strength and it's not what truly matters in the long-run.  My strategies are focused on successfully navigating bad periods and making sure investors don't give back the progress they made in good times.

A crash is coming...

Not to be too doom and gloom, but I am expecting a major market crash within the next few years.  The damage that has been done to the economy for multiple years now to prop things up will at some point have a major price to pay.  When that happens, I would like to be one of the few that will not only survive what's coming, but thrive.  Tactical rotation strategies that include long Volatility positions will shine in that environment and the gap between us and the rest will increase even more than it already has since we launched in 2012. 

30,000 foot view of the entire range that includes all the good, bad, and ugly since VTS launched in January 2012: