Feb 21, 2021 2 min read Historical Returns

Weekend Report 2-19-21

FIRE Portfolio YTD returns following my FIRE TAA Model versus S&P 500 YTD returns. VFINX fund serves as S&P 500 proxy.

Editor's note: This article is public for paid and free subscribers.

Included in this issue of The FIRE Letter:

Market Wrap
FIRE Portfolios YTD Return
Benchmarks YTD Return
Investor Sentiment
Looking Ahead

Market Wrap for the Week Ending Feb 19, 2021

This past week was shortened by Monday’s observance of Presidents’ Day, so we only had four trading days. Not surprisingly, the markets pulled back a little. The markets had been on an upwards trajectory seemingly for most of February, so we were due for a breather. The S&P 500 pulled back just a little each day through the week.

FIRE Portfolios - YTD Return

My FIRE mutual fund portfolio at Fidelity is up 10.18% YTD
My FIRE ETF portfolio at Schwab is up 11.16% YTD

Nothing to get too excited about, but going in the right direction for sure!

Benchmark Stock Market Indices - YTD Return

The S&P 500 (Vanguard fund VFINX) is up 4.22% YTD
The Dow Jones Industrial Average (State Street ETF DIA) is up 3.21% YTD

Investor Sentiment

I find investor sentiment to be an interesting contrarian indicator. There are several similar indicators put out by different organizations. I like CNN’s Fear and Greed index, currently sitting at 54, which is slightly above neutral. The indicator’s scale goes from 0 - 100 with 0 being most pessimistic (Fearful) and 100 being most optimistic (Greedy). A reading of 50 is considered neutral.

This indicator is contrarian because supposedly, when investor optimism is high, there are less investors likely to buy more stocks and push the markets higher.

This indicator was at 91 a year ago. You probably recall that the markets took a sharp downwards turn shortly after this time last year.

The Fear and Greed indicator isn’t part of my quantitative decision making, however, I like following it to get a reality check on how the markets are behaving and feel to me.

A reading of 54 is usually no cause for concern.

Looking Ahead

February is a short month, so next Friday will be the last trading day of the month. Then we’ll assess where we are at and what my FIRE portfolios' signals say for next month.

Thanks for reading! Hope you are off to a good start to your week!

Best regards,

Mike Bishop

Editor, The FIRE Letter

Disclaimer: All strategies including recommended trades published here are for educational and informational purposes only. They are not recommended for any specific individual, business, or other legal entity. I don’t know your age, income, personal or financial circumstances and cannot possibly suggest any financial or investing decisions for you. Seek advice from your accountant, financial advisor, and attorney before making any investing decisions. Always conduct your own due diligence before making any investing decisions. Seriously!