Uncle Nils was the winner for the quarter just past. His mix of gold, silver, palladium, and platinum roared back from an overall negative at mid-year, to almost 14% year-to-date. Silver was the biggest gainer, up 25% in just three months. Gold, overweighted at half the total mix, was up more than 10%.
Lars, investing for a family trust in a more diversified way, had a good third quarter but not as strong as Nils's. The trust's combination of stocks, real estate, and intermediate bonds (with also a dose of Nils's own mix) is up more than 12% for the year, doubling the increase it had mid-year. Stocks and real estate have been good performers, comparable with Nils's metals, but a 6% YTD return on bonds, while good, holds back Lars's overall average.
The winner gets to pick the drink at their dinner where Lars announces the results for the quarter. Last time Lars picked a Rob Roy, in part to make old Uncle Nils feel silly drinking from a Manhattan glass. Nils this time: "What's another type of drink with Scotch in it, a man's drink?" Lars: "We could do a Rusty Nail." Nils: "Sounds good."
Lars feels good losing while getting a 12% return for three quarters, and remaining much more diversified than Nils. The same positive effects have occurred in Lars's 401(k). In fact Lars has one of those feelings that the recent rise in his retirement plan is too good to be true. He's done some inexact but sound figuring and tomorrow he'll move about 15% from stocks, bonds, and real estate to a short-term fixed-income fund, until (as he expects) the market comes back to him maybe 10%.