“The human brain is an incredible pattern-matching machine.” – Jeff Bezos
How Did the Markets and Our Funds Do in Feb 2023?
It’s really true that all everyone is trying to do is match patterns. When the economy does “this”, when the Fed does “this”, when inflation is like “that”, then the stock market does such and such. The problem is that the patterns are incredibly complex, and the histories are not always easy to match. We have to realize that we are not analyzing 10,000 instances of a simple event, like cars crossing a bridge.
I observe that the market seems to WANT to declare an end to the decline and resume an upward march, but then the Federal Reserve keeps reminding us that it really is serious about raising rates and the market reacts negatively. Is it time to take them seriously?
When there are conflicting indications of market direction, the appropriate action is to maintain a certain diversified allocation among different investments, along with keeping a healthy percentage in safe holdings. We are using a lot of Treasury Bills now (as is the case in the entire investment world today) because the 6 month durations are yielding close to 5%. It’s like waking up in the 1980s.
On average, the indexes lost about 3%. Following is our fund performance in February:
| Feb-23 | |||
| S&P 500 | -2.44% | ||
| Nasdaq (technology) | -1.01% | ||
| Dow 30 | -3.94% | ||
| NYSE Composite | -3.62% | ||
| Russell 2000 (small co) | -1.69% | ||
| US Aggregate Bond | -2.34% | ||
| FSTA | -2.19% | Fidelity Consumer Staples | ETF |
| FUTY | -5.69% | Fidelity Utilities | ETF |
| FENY | -6.60% | Fidelity Energy | ETF |
| FVAL | -3.17% | Fidelity Value | ETF |
| ITA | 0.03% | iShares Aerospace | ETF |
| IWO | -1.23% | iShares Russell Growth | ETF |
| ONEY | -2.81% | SPDR Russell Yield | ETF |
| RSP | -3.38% | Invesco S&P Equal Wt | ETF |
| URA | -9.12% | Global Uranium | ETF |
| VBR | -2.26% | Vanguard Small Cap | ETF |
| XME | -1.59% | SPDR metals mining | ETF |
| FDFAX | -2.89% | Fidelity Consumer Staples | stock mutual fund |
| FSLVX | -3.24% | Fidelity Large Cap Value | stock mutual fund |
| FSMVX | -3.01% | Fidelity Mid Cap Value | stock mutual fund |
| FCPVX | -1.64% | Fidelity Small Cap Value | stock mutual fund |
| IDIVX | -3.34% | Integrity Dividend Harvest | stock mutual fund |
| FSENX | -6.18% | Fidelity Select Energy | stock mutual fund |
| PRFDX | -3.65% | T Rowe Price Equity Income | stock mutual fund |
| FSUTX | -5.73% | Fidelity Select Utilities | stock mutual fund |
| FLPSX | -2.45% | Fidelity Low Priced Stock | stock mutual fund |
| CFRAX | 0.41% | Catalyst floating rate | income mutual fund |
| EIFAX | 0.57% | Eaton Vance floating rate | income mutual fund |
| FFRAX | 0.46% | Fidelity floating rate | income mutual fund |
| RNDLX | -1.72% | RiverNorth Strategic | income mutual fund |
| FAGIX | -1.22% | Fidelity Capital & Income | income mutual fund |
| Starwood REIT, class D | -0.80% | Jan* | real estate investment trust |
| Blackstone REIT, class D | -0.30% | Jan* | real estate investment trust |
| Blackstone Credit Fd, class I | 1.90% | Jan* | private lending trust |
| Prime Meridian Real Estate | 0.39% | Jan* | private fixed return |
| KIP, Kay Income Partners LP | 0.56% | Feb | private mortgage fund |
(Courtesy Morningstar Workstation)
* 1-month reporting lag