Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
It's easy to do in my google spreadsheet. I have it set up so that I just plug in each month's contributions. That also helps me keep track of how much I actually managed to save for the year v. my projections. It's more for my curiosity and record keeping than for anything actionable. But I agree with EmergDoc that I would be useful for adjusting one's expectations after years of under- or overperformance.
avalpert wrote:dkturner wrote:I was talking about Bogleheads, like Jack Bogle and me, who hold some actively managed funds. Some of us have also been known to move our money around, based on perceived valuation opportunities. If I didn't check on the return of my portfolio at least once per year I never would have known that I have managed to best a benchmark of Vanguard index funds which mirror my portfolio by 170 basis points per year for the last 18 years.
Wow, you are so special - maybe you should have started your own fund and made money with your gift of successful market timing.
Perceived valuation opportunities have nothing to do with past returns - so need to track them for that. Holding active funds doesn't require you to know your personal past returns - so no need there. Seems like the only reason you and Jack Bogle would track past returns is so you can sound like good active investors when you pronounce how well you are doing at timing the market. Somehow I doubt Jack Bogle cares much about doing that but its nice that you do.
There's no secret to beating the market, take more risk. Risk adjusted return is harder to beat. Which Vanguard index, and what/how many stocks (please list top 5 holdings) in order to beat by 170 basis points over 18 years? Unless you replace with equivalent substitutes, I'd venture to say they're different risk stocks in the two groups.
As far as how I've tracked, used a couple of methods. Google fiance lets you make portfolios, so I create a suitable tracking portfolio along with mine. You could put your portfolio in one and buy same amount of SPY in another and watch it going forward. An alternate is to short SPY in the same amount in the same portfolio and watch the net growth/loss of the combined portfolio as the amount you'd be beating/losing to. Potentially, you could backdate the transaction, but I haven't done this so I can't tell you whether dividends and other actions are properly accounted for.
One other aspect of keeping track of your returns: use the CPI-U (or some other inflation benchmark) each year to help calculate your REAL rate of return. This is sobering and also helps you appreciate the effect of inflation on your portfolio. After all, when you're trying to do your best to figure out how much you'll need to save for retirement, using REAL return calculations can be more helpful than using nominal returns.
inbox788 wrote:As far as how I've tracked, used a couple of methods. Google fiance lets you make portfolios, so I create a suitable tracking portfolio along with mine. You could put your portfolio in one and buy same amount of SPY in another and watch it going forward. An alternate is to short SPY in the same amount in the same portfolio and watch the net growth/loss of the combined portfolio as the amount you'd be beating/losing to. Potentially, you could backdate the transaction, but I haven't done this so I can't tell you whether dividends and other actions are properly accounted for.
Let me elaborate a little on this. I now follow several Google finance portfolios. About 2 years ago, I met with an "adviser" (i.e. sales guy) to discuss investment ideas. At the time, he seemed to be steering regular (retired?) folks into dividend paying stocks (probably taking their cash and fixed income), which in retrospect, turned out to be a decent idea (i.e. VHDYX). With me, for whatever reason (because we didn't really go into my specific situation - so he only had my middle age to work with and I might have mentioned I was interested in more aggressive investments), so we talked about going into commodities and materials. I looked at a sample portfolio, which consisted mainly of international/developing/emerging market/materials and some mid-caps. I've been following the virtual portfolio and right now, his portfolio is down 5%! I created a similar/comparable Vanguard portfolio (i.e. VWO FXI ILF) and that's down 3% in the same period. In the same time-frame, I compared my actual portfolio, to another recommended allocation (optimized with all low-cost Vanguard funds), and my portfolio return was 11.5% vs 12.5% for the optimized account. So, if I had optimized then, I would have gotten an extra % return, but if I'd changed investment strategy, would have lost over 15%. Now over the same period, the S&P500 went up about 20%!?! My portfolio was brought down by the international exposure (about half), which if you look at VT was only up about 2-5% over that time.