Three fund portfolio performance

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Sonic
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Three fund portfolio performance

Post by Sonic » Sun May 13, 2018 7:49 am

New to this site. I have participated in the three fund portfolio for two years and have yet to see any gains. Just a one time gain then a complete loss of the gain and part of original principal. Kind of disappointing. I could have gone to the casino for that kind of action.

livesoft
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Re: Three fund portfolio performance

Post by livesoft » Sun May 13, 2018 8:03 am

You do know that a 3-fund portfolio can have an infinite number of asset allocations.

The 2-year performance of VSMGX which has a 60/40 asset allocation is about 22% total return or about 10% per year. A little more than 2 years ago was a very nice low in the stock markets in February 2016 which made it one of the recent near perfect times to start investing.

I'd like to figure out how you did what you did.
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Jags4186
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Re: Three fund portfolio performance

Post by Jags4186 » Sun May 13, 2018 8:10 am

Yes, very interesting.

Over the last 24 months:

US Total Stock Market: 38.7% total return
Total International Stock Market: 35.9% total return
US Total Bond Market: -0.03% total return

How exactly did you lose money?

avoidingdumbmistakes
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Re: Three fund portfolio performance

Post by avoidingdumbmistakes » Sun May 13, 2018 8:25 am

Something isn't adding up. What 3 funds do you have and what % of your AA in each?

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CyclingDuo
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Re: Three fund portfolio performance

Post by CyclingDuo » Sun May 13, 2018 9:20 am

Sonic wrote:
Sun May 13, 2018 7:49 am
New to this site. I have participated in the three fund portfolio for two years and have yet to see any gains. Just a one time gain then a complete loss of the gain and part of original principal. Kind of disappointing. I could have gone to the casino for that kind of action.
Sonic - you will have to show us your asset allocation and when your initial purchase was made of the three fund portfolio.

Two years ago from May, 2016 to now May, 2018 shows...

VTI (Vanguard Total Stock Market Fund) = 34.6% gain (price went from $104.42 to $140.57)
VXUS (Vanguard Total International Stock Fund) = 29.6% gain (price went from $44.43 to $57.60)
BND (Total Bond Market Fund) = -5% loss (price went from $83.14 to $78.93)

Pretty hard to muck that up into showing zero gains for the two years unless you were trading in and out and trying to "time" the market.

vested1
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Re: Three fund portfolio performance

Post by vested1 » Sun May 13, 2018 10:13 am

CyclingDuo wrote:
Sun May 13, 2018 9:20 am
Sonic wrote:
Sun May 13, 2018 7:49 am
New to this site. I have participated in the three fund portfolio for two years and have yet to see any gains. Just a one time gain then a complete loss of the gain and part of original principal. Kind of disappointing. I could have gone to the casino for that kind of action.
Sonic - you will have to show us your asset allocation and when your initial purchase was made of the three fund portfolio.

Two years ago from May, 2016 to now May, 2018 shows...

VTI (Vanguard Total Stock Market Fund) = 34.6% gain (price went from $104.42 to $140.57)
VXUS (Vanguard Total International Stock Fund) = 29.6% gain (price went from $44.43 to $57.60)
BND (Total Bond Market Fund) = -5% loss (price went from $83.14 to $78.93)

Pretty hard to muck that up into showing zero gains for the two years unless you were trading in and out and trying to "time" the market.
Or spending from the portfolio and not accounting for the withdrawals.

GLState
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Re: Three fund portfolio performance

Post by GLState » Sun May 13, 2018 10:36 am

The OP would also have to consider their investment schedule. Before the runup of the past few days, it would be possible to show a portfolio loss if contributions were small for 2016 and 2017 in comparison to the 2018 contribution.

But, if the OP invested a lump sum in May 2016 or an equal investment each month or quarter, they should show a nice gain for their portfolio over the past two years.

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CyclingDuo
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Re: Three fund portfolio performance

Post by CyclingDuo » Sun May 13, 2018 10:38 am

vested1 wrote:
Sun May 13, 2018 10:13 am
Or spending from the portfolio and not accounting for the withdrawals.
Yup, that would have altered his current balance. 8-)

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abuss368
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Re: Three fund portfolio performance

Post by abuss368 » Sun May 13, 2018 11:05 am

Sonic wrote:
Sun May 13, 2018 7:49 am
New to this site. I have participated in the three fund portfolio for two years and have yet to see any gains. Just a one time gain then a complete loss of the gain and part of original principal. Kind of disappointing. I could have gone to the casino for that kind of action.
Hi Sonic -

Welcome to the forum. I hope you will return and offer additional information and thoughts. Your post disappoints me and leads me to believe you may not have acquired sufficient investment knowledge to date. I would honestly recommend a very good book(s) on investing as it will broaden for investment knowledge and horizon. A few of my favorites:

* The Bogleheads Guides to Investing & Retirement - 2 books
* Jack Bogle - The Little Book of Common Sense Investing
* Jack Brennan - Straight Talk on Investing

Remember: Simplicity is the master key to financial success.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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ruralavalon
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Re: Three fund portfolio performance

Post by ruralavalon » Sun May 13, 2018 3:13 pm

Welcome to the forum :) .

Sonic wrote:
Sun May 13, 2018 7:49 am
New to this site. I have participated in the three fund portfolio for two years and have yet to see any gains. Just a one time gain then a complete loss of the gain and part of original principal. Kind of disappointing. I could have gone to the casino for that kind of action.
You must be misunderstanding something, or perhaps doing something wrong.

What is the start date for your three-fund portfolio? What percentage of the portfolio is in each fund? Has that been stable throughout the 2 years, or have you been changing the allocation? What three funds you using? Has that been the same throughout the 2 years, or have you been trading to different funds?

By gain or loss, are you referring to share price or total returns (including dividends)?

Are you reinvesting dividends and capital gains, or taking out the cash?

You can simply add this to your original post using the edit button (the pencil icon near the upper right corner of your post), it helps a lot if all of your information is in one place.

. . . . .

I suggest that you read one or two books on general investing. Wiki article, "Books: recommendations and reviews". When I first stated managing my own investments, I found this tutorial very helpful in learning investing terminology/jargon and some of the investing basics. Morningstar, "Investing Classroom". Also take a look at the Boglehead’s wiki, the "getting started" link I give below.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

chevca
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Re: Three fund portfolio performance

Post by chevca » Sun May 13, 2018 4:20 pm

You all are too kind. Until the OP provides more info about this, I would have to assume the "T" word applies to this post/thread.

Sonic
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Re: Three fund portfolio performance

Post by Sonic » Mon May 14, 2018 9:15 pm

Started June 2017. Experiment using robo investing with Vanguard. Thought I would evaluate after one year if I would tcontinue with robo investment and/or profile. So far robo option is gone as far I am concerned.

Read the books and articles suggested before starting.

Evaluating total return
No spending from the investment.
All dividends etc. are reinvested.
VTI (Vanguard Total Stock Market Fund) 50%
VXUS (Vanguard Total International Stock Fund) 10%
BND (Total Bond Market Fund) = 40%

Started an self managed account six months later to compare results. Still a loss but less because of no robo expense.

Sonic
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Re: Three fund portfolio performance

Post by Sonic » Mon May 14, 2018 9:20 pm

Just curious Chevca. What is the T word? Thank you.

MotoTrojan
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Re: Three fund portfolio performance

Post by MotoTrojan » Mon May 14, 2018 9:29 pm

Sonic wrote:
Mon May 14, 2018 9:15 pm
Started June 2017. Experiment using robo investing with Vanguard. Thought I would evaluate after one year if I would tcontinue with robo investment and/or profile. So far robo option is gone as far I am concerned.

Read the books and articles suggested before starting.

Evaluating total return
No spending from the investment.
All dividends etc. are reinvested.
VTI (Vanguard Total Stock Market Fund) 50%
VXUS (Vanguard Total International Stock Fund) 10%
BND (Total Bond Market Fund) = 40%

Started an self managed account six months later to compare results. Still a loss but less because of no robo expense.
This is simply impossible unless the bulk of your investment happened in January 2018.

UpperNwGuy
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Re: Three fund portfolio performance

Post by UpperNwGuy » Tue May 15, 2018 1:36 am

Sonic wrote:
Sun May 13, 2018 7:49 am
Just a one time gain then a complete loss of the gain and part of original principal.
Sounds to me like you invested most of your money on January 1, 2018, saw a gain as of January 31, then saw a year-to-date loss as of the ends of February, March, and April.

chevca
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Re: Three fund portfolio performance

Post by chevca » Tue May 15, 2018 6:10 am

Sonic wrote:
Mon May 14, 2018 9:20 pm
Just curious Chevca. What is the T word? Thank you.
Starts with a T, ends with a roll. :happy

I thought you have been doing the three fund for 2 years? Now, it's less than a year, and less than that, that you've even been invested?

I still wonder about the T....

Sonic
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Re: Three fund portfolio performance

Post by Sonic » Tue May 15, 2018 7:06 am

UpperNwGuy wrote:
Tue May 15, 2018 1:36 am
Sonic wrote:
Sun May 13, 2018 7:49 am
Just a one time gain then a complete loss of the gain and part of original principal.
Sounds to me like you invested most of your money on January 1, 2018, saw a gain as of January 31, then saw a year-to-date loss as of the ends of February, March, and April.
As i stated the investments were fully vested june of 2017. I was mistaken about two years. My apologies.

chevca
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Re: Three fund portfolio performance

Post by chevca » Tue May 15, 2018 7:25 am

Likely what's throwing us is your use of the word experiment. That doesn't sound fully invested.

I think you started off on the wrong foot here claiming the three fund is about as good as going to the casino and making up false timelines. We can get past that though. How can we help you?

lostdog
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Re: Three fund portfolio performance

Post by lostdog » Tue May 15, 2018 7:38 am

Possible trolling. This doesn't make any sense at all based on the time frame stated.
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GLState
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Re: Three fund portfolio performance

Post by GLState » Tue May 15, 2018 7:41 am

One (or two) year(s) is not enough time to evaluate a portfolio. Vanguard Advisors will provide you with a good portfolio as will a three fund, four fund, Target Date fund, Life Strategy, etc. Trying to pick "the best" based on 1 year's data will start you down the path of buying past year's "winners" and a buy high, sell low strategy. Pick a portfolio. You'll never know which will be "the best" next year.

livesoft
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Re: Three fund portfolio performance

Post by livesoft » Tue May 15, 2018 7:53 am

Since June 1, 2017 the Vanguard LifeStrategy Moderate Growth fund with its 60/40 asset allocation has a performance through yesterday of about 8.6%. And June 2017 was a month where things went no where, so investing on just about any day in June 2017 would have ended up with 8.6% yesterday.

That's a far cry from "Just a one time gain then a complete loss of the gain and part of original principal." So I am still curious how that happened.
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goingup
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Re: Three fund portfolio performance

Post by goingup » Tue May 15, 2018 7:59 am

Running that AA thru Portfolio Visualizer shows a respectable return of 7.32% for June to April. There must be other variable at play in the OP's portfolio. (Sorry about the formatting. I should learn how to post tables correctly.)

Portfolio Analysis Results (Jun 2017 - Apr 2018) Link PDF Excel
Portfolio 1
Ticker Name Allocation
*VTI Vanguard Total Stock Market ETF 50.00%
*VXUS Vanguard Total International Stock ETF 10.00%
*BND Vanguard Total Bond Market ETF 40.00%

VTI
VXUS
BND
40%
10%
50%
Category Count
VTI 50
VXUS 10
BND 40
Portfolio Returns

Portfolio performance statistics
Portfolio Initial Balance Final Balance CAGR Stdev Best Year Worst Year Max. Drawdown Sharpe Ratio Sortino Ratio US Mkt Correlation
Portfolio 1 $100,000 $106,686 7.32% 5.07% 7.84% -1.08% -3.67% 1.19 1.87 0.97

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oldcomputerguy
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Re: Three fund portfolio performance

Post by oldcomputerguy » Tue May 15, 2018 8:03 am

Sonic wrote:
Mon May 14, 2018 9:15 pm
Started June 2017. Experiment using robo investing with Vanguard. Thought I would evaluate after one year if I would tcontinue with robo investment and/or profile. So far robo option is gone as far I am concerned.

Read the books and articles suggested before starting.

Evaluating total return
No spending from the investment.
All dividends etc. are reinvested.
VTI (Vanguard Total Stock Market Fund) 50%
VXUS (Vanguard Total International Stock Fund) 10%
BND (Total Bond Market Fund) = 40%

Started an self managed account six months later to compare results. Still a loss but less because of no robo expense.
According to Marketwatch data, the trading price of VTI is up almost 11 percent since July 31 of last year, while VXUS is up almost 8%. BND is down almost 4% over the same timeframe. Overall, Portfolio Visualizer shows approximately a 6% gain in that portfolio mix between May 2017 and now. I can't figure out how you would have lost with that portfolio, even taking robo advisor fees into consideration.

As a side note, from your original post, you seem to be under the impression that the three-fund portfolio should always go up, regardless of timeframe. That is simply not true of any investment anywhere. There Will Be Losses. Over time the portfolio will recover and show gains, but expecting a constant up-trend over a one-year or a six-month timeframe is simply unrealistic, no matter what portfolio you hold. I say this not to be critical, but to make sure that you are aware that There Will Be Losses at some point, so that you are emotionally prepared for them and do not bail. Investor behavior ("tinkering" with one's portfolio) accounts for the biggest difference between the market's return and the return investors actually receive. Stay the course.
It’s taken me a lot of years, but I’ve come around to this: If you’re dumb, surround yourself with smart people. And if you’re smart, surround yourself with smart people who disagree with you.

deltaneutral83
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Re: Three fund portfolio performance

Post by deltaneutral83 » Tue May 15, 2018 8:08 am

I would recommend short term: an adviser, a calculator, and a calendar...A 60/40 allocation with 20% of equities in international has had 10+% CAGR the last 24 months. Unless your allocation is 99% BND/0.5% VTI/0.5% VXUS, something is badly wrong.

rob65
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Re: Three fund portfolio performance

Post by rob65 » Tue May 15, 2018 9:26 am

Was it a lump sum last June, equal monthly deposits, or some other variation? It looks to me like equal monthly investments starting June 30, 2017 to April 30, 2018 is roughly even. A lump sum on December 31 is down about 3%. The OP could have lost money depending on the deposit schedule.

OP, the stock market is volatile. It will go up and down. You can’t judge a portfolio over a period of months; you have to think in terms of 30+ years. It’s almost impossible to effectively time the market and jump in and out at the right times. The advice on this site is to pick an asset allocation, use low cost index funds or etfs, and consistently invest over a long period of time.

Now, I don’t think you need to pay someone to maintain a simple 3 fund portfolio; you can handle that yourself, though you may need to read about rebalancing strategies. I’m also assuming that this is in some type of IRA; if it is in a taxable account, then tax considerations do introduce complications.

Lafder
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Re: Three fund portfolio performance

Post by Lafder » Tue May 15, 2018 9:58 am

Sonic,
Can you post the specifics of how much money you put into each account and when? And of any expenses you have with your holdings?

And your current balances?

With the 3 holdings you describe at the asset allocation you describe, I am not seeing a negative return or loss if I look up returns in the past 23 months so it is confusing to understand how you are calculating a loss.

This makes me think: either you do not have what you think you have, or are calculating returns wrong, or ??????.

Give us more info and we can help you make sense of this.

There are plenty of kind folks here that will help you make sense of what you have.

Do you have dividends set to reinvest?

lafder

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ruralavalon
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Re: Three fund portfolio performance

Post by ruralavalon » Tue May 15, 2018 10:14 am

Sonic wrote:
Sun May 13, 2018 7:49 am
New to this site. I have participated in the three fund portfolio for two years and have yet to see any gains. Just a one time gain then a complete loss of the gain and part of original principal. Kind of disappointing. I could have gone to the casino for that kind of action.
Sonic wrote:
Mon May 14, 2018 9:15 pm
Started June 2017. Experiment using robo investing with Vanguard. Thought I would evaluate after one year if I would tcontinue with robo investment and/or profile. So far robo option is gone as far I am concerned.

Read the books and articles suggested before starting.

Evaluating total return
No spending from the investment.
All dividends etc. are reinvested.
VTI (Vanguard Total Stock Market Fund) 50%
VXUS (Vanguard Total International Stock Fund) 10%
BND (Total Bond Market Fund) = 40%

Started an self managed account six months later to compare results. Still a loss but less because of no robo expense.
Sonic wrote:
Tue May 15, 2018 7:06 am
UpperNwGuy wrote:
Tue May 15, 2018 1:36 am
Sonic wrote:
Sun May 13, 2018 7:49 am
Just a one time gain then a complete loss of the gain and part of original principal.
Sounds to me like you invested most of your money on January 1, 2018, saw a gain as of January 31, then saw a year-to-date loss as of the ends of February, March, and April.
As i stated the investments were fully vested june of 2017. I was mistaken about two years. My apologies.
I am still puzzled.

Vanguard LifeStrategy Moderate Growth Fund (VSMGX) has a 60/40 asset allocation, including international investments. Since June 1, 2017 total return is up 8.63%, since January 1, 2018 total return is up 0.99%.

Vanguard Balanced Index Fund Admiral Shares (VBIAX) also has a 60/40 asset allocation, but without international investments. Since June 1, 2017 total return is up 8.68%, since January 1, 2018 total return is up 0.92%.

When exactly was your start date with the robo advisor portfolio? When exactly was your start date with your self managed account? For each, did you invest all at once in a lump sum or in periodic investments on some schedule?
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

pkcrafter
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Re: Three fund portfolio performance

Post by pkcrafter » Tue May 15, 2018 10:31 am

Sonic, here is a M* chart of Vanguard total stock market performance from 6/2/17 to 5/14/18. You did have the drag of 0.3% for the robo fee, but that would have no visible effect. International was up a bit and BND was down a few %. Overall, you had a decent gain. So, the only conclusion is this isn't exactly how you did it, or your calculations/info are incorrect. You did hit a peak and dropped from that, but you still have an overall good gain. Also, because volatility is always alive and well, looking at short term performance is highly variable.

Welcome to the forum and hang in there.

http://quotes.morningstar.com/chart/fun ... 2%3A955%7D

Chart for Vanguard lifestrategy moderate (60/40) which is very similar to your portfolio. Positive gain for your time frame.

http://quotes.morningstar.com/chart/fun ... 2%3A955%7D

The three fund portfolio over time...

viewtopic.php?f=10&t=88005

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

Sonic
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Re: Three fund portfolio performance

Post by Sonic » Tue May 15, 2018 4:02 pm

Thank you for the charts. The charts provide a good look iver time. This helps me decide to telease the robo investor commitment and continue on with the split i currently use. Thanks again.

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CyclingDuo
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Re: Three fund portfolio performance

Post by CyclingDuo » Wed May 16, 2018 8:30 am

Sonic wrote:
Tue May 15, 2018 7:06 am
As i stated the investments were fully vested june of 2017. I was mistaken about two years. My apologies.
That accounts for the confusion!

You have been invested less that one year, and we are in the midst of a typical market correction from the recent run off of the 2015-2016 one year correction/bear market.

As the infamous Benjamin Graham saying goes from his book "The Intelligent Investor" (a book Warren Buffett still claims is the best book on investing ever written)....

“In the short term the market is a voting machine; in the long term it is a weighing machine.”

You have only been invested for a very short term. Long term, you will be fine. The best advice with regard to your investments in the three fund portfolio is to set your asset allocation, contribute on an automatic basis, and then do nothing.

Avoid the doom and gloom which will always be served out in large helpings throughout your investing career by those fighting for survival and focusing on the negative.

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ruralavalon
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Re: Three fund portfolio performance

Post by ruralavalon » Wed May 16, 2018 9:40 am

Sonic wrote:
Tue May 15, 2018 4:02 pm
Thank you for the charts. The charts provide a good look iver time. This helps me decide to telease the robo investor commitment and continue on with the split i currently use. Thanks again.
Stick with it, the 3 ETFs you picked are good choices, you can manage your investments yourself. Continue investing.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

PFInterest
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Re: Three fund portfolio performance

Post by PFInterest » Wed May 16, 2018 2:01 pm

Sonic wrote:
Mon May 14, 2018 9:15 pm
Started June 2017. Experiment using robo investing with Vanguard. Thought I would evaluate after one year if I would tcontinue with robo investment and/or profile. So far robo option is gone as far I am concerned.

Read the books and articles suggested before starting.

Evaluating total return
No spending from the investment.
All dividends etc. are reinvested.
VTI (Vanguard Total Stock Market Fund) 50%
VXUS (Vanguard Total International Stock Fund) 10%
BND (Total Bond Market Fund) = 40%

Started an self managed account six months later to compare results. Still a loss but less because of no robo expense.
Hasn't even been a year.......your first post says 2 years.....these are different things.

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