After establishing Coroebus Wealth Management June 3, 2013, we began managing our bond portfolio in April of 2014. I have been advised not to offer my services based on market performance as capturing alpha is rare and past performance does not guarantee future results. That being said, we had a great year.
As the Federal Reserve Board remarks pivoted to a dovish tone, the commonly held benchmark Bloomberg Global Aggregate Bond Index returned 5.5% in 2023, following the bond markets worst year ever. As a passively managed strategy our portfolio returned 7.58% in 2023.
Although minimizing downside capture is key to long term performance, we believe volatility is a matter of tolerance rather than a pure measure of risk. Research supports portfolio managers capture enough alpha to pay themselves, and those who outperform their benchmark over a five to ten year period tend not to over the following period.
We won’t dive in to all of the risk metrics here as I would like to take a more behavioral perspective. As I reviewed monthly returns preparing for this post I noticed the strangest correlation between negative periods and having a generally poor state of being or mood. The anxiety of anticipating a decrease in cash flow may be a factor, we also accept anxiety is a cause of poor decision making.
As a solo entrepreneur balancing the daily operations and compliance issues that come with running an investment advisor can occupy mental bandwidth that may have been devoted to portfolio management tasks. We have met several existentially threatening challenges and have managed to persevere.
As I continue to make progress on Pythia, a certain joy has come with finally making progress on what may be my magna carta. As my mood improves so does my vision. Though balancing operations with immersing myself in computer science/IT, and my other endeavors is a challenge, I am absolutely excited to deliver a unique service to the industry.
Stay tuned.