JaneyLH wrote:I have a stock/bonds ratio of 58/42 right now and the Bogleheads spreadsheet tells me my portfolio return year to date is 2.4%. Sound OK?
That's an excellent question! This is definitely something missing from the spreadsheet. When reporting my December returns, I had to calculate the whole benchmark return by hand to see if my annual return "sounded OK" (see: viewtopic.php?f=10&t=145610&start=700#p2740045).
Wouldn't it be nice if the spreadsheet was able to automatically calculate a benchmark return, out of an asset allocation? I think so. I'm adding that the my TODO list. (One would have to provide monthly data for the three components of a three-fund portfolio: US market, International markets, total bonds).
Bogleheads investment philosophy | One-ETF global balanced index portfolio | VPW
I don't look at returns, per se. I look at net worth growth.
Up 7%
Since we are striving for accuracy and uniformity -- that should be Beardstown Ladies named for an investing club in Beardstown, a little town on the Illinois River in Central Illinois.
"Everything should be as simple as it is, but not simpler." - Albert Einstein |
Wiki article link:Getting Started
longinvest wrote:
I thought that by providing an easy-to-use spreadsheet, people would start learning about the proper way to measure and report returns. I have obviously failed.
I'm done participating to this thread. I don't want to encourage people to continue to reporting incoherent returns, only when they are positive and with no indication whatsoever about how they were calculated.
From your other thread ("A Returns Spreadsheet for Bogleheads") --my bolding:
longinvest wrote:
...Past total returns are not of much use. They are not indicative of future returns. I like calculating them, because my broker does not report them to me. They allow me to verify that my overall portfolio (across multiple accounts) is effectively tracking its index. While I intellectually know that this should be the case, because I have a well defined asset allocation and a portfolio composed of index ETFs, it is reassuring to get an independent confirmation that my portfolio returns are as they should be.
You said this much better than I tried to up-thread. We have a portfolio that needs to grow over the long run, and so it's reassuring to track it and confirm that I haven't made a total hash of things. I hope you keep a thread going, in whatever format.
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri
I don't look at returns, per se. I look at net worth growth.
Up 7%
Since we are striving for accuracy and uniformity -- that should be Beardstown Ladies named for an investing club in Beardstown, a little town on the Illinois River in Central Illinois.
I don't look at returns, per se. I look at net worth growth.
Up 7%
Since we are striving for accuracy and uniformity -- that should be Beardstown Ladies named for an investing club in Beardstown, a little town on the Illinois River in Central Illinois.
Ha. Spellcheck on my phone autocorrected that.
I hated the auto-correct on my phone, I always wanted to find a way to disable it.
"Everything should be as simple as it is, but not simpler." - Albert Einstein |
Wiki article link:Getting Started
Up 0.75% YTD. 64stock/21bond/15 TREA
Moved a lot of fun money around today to lock in a small gain in UAL (~5% outperform of VTI over 3-4months). Fun money = 5% of portfolio.
This is ballpark, using a computation by fidelity and an estimate based on the data Vanguard supplies (dunno why they can't do a better job of computing a person's performance). I'm up 3.2% for the year, which feels like a miracle after the last couple years. Some of my play money bets inside my little Roth, specifically VGENX and VGPMX, have given a boost. I'm about 78% stock and 22% bonds last time I added things up.
IlliniDave wrote:This is ballpark, using a computation by fidelity and an estimate based on the data Vanguard supplies (dunno why they can't do a better job of computing a person's performance). I'm up 3.2% for the year, which feels like a miracle after the last couple years. Some of my play money bets inside my little Roth, specifically VGENX and VGPMX, have given a boost. I'm about 78% stock and 22% bonds last time I added things up.
A quick, easy, fairly accurate method to determine growth year to date --
1) portfolio balance as of 12/31 last year, plus withdrawals, minus contributions,
2) divide by current portfolio balance, and
3) subtract 1.
"Everything should be as simple as it is, but not simpler." - Albert Einstein |
Wiki article link:Getting Started
I think that the initial idea of this thread was to look at your portfolio's rate of return so far in the year, not an annualized rate, and not how much your portfolio has increased due to new contributions.
The original post which started the thread also asked for your asset allocation, the percent in stocks and percent in bonds.
"Everything should be as simple as it is, but not simpler." - Albert Einstein |
Wiki article link:Getting Started
Asset allocation: 16% - fixed income; the rest - equity. Equity allocations by regions: Canadian - 7%, US - 26%, UK - 12%, Other developed - 16%, Emerging - 23%.
Not much movement in April. Canadian and emerging markets did well. UK dropped because of the Brexit fears. US went up in USD but dropped in CAD.
Vanguard LifeStrategy Moderate Growth VSMGX has a 60/40 allocation and is up YTD 2.6%,
so I suspect that any YTD number above 5% may be calculated incorrectly. For example, many Quicken users get Quicken to annualize the return. So a 2.6% YTD return would be about 2.6% * 12 / 5 = 6.24% because we are only 5 months into a 12 month year.
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livesoft wrote:Vanguard LifeStrategy Moderate Growth VSMGX has a 60/40 allocation and is up YTD 2.6%,
so I suspect that any YTD number above 5% may be calculated incorrectly. For example, many Quicken users get Quicken to annualize the return. So a 2.6% YTD return would be about 2.6% * 12 / 5 = 6.24% because we are only 5 months into a 12 month year.
Right but I think it is only 4 months in. My total return is about 6.6% YTD Apr 30.
livesoft wrote:Vanguard LifeStrategy Moderate Growth VSMGX has a 60/40 allocation and is up YTD 2.6%,
so I suspect that any YTD number above 5% may be calculated incorrectly. For example, many Quicken users get Quicken to annualize the return. So a 2.6% YTD return would be about 2.6% * 12 / 5 = 6.24% because we are only 5 months into a 12 month year.
Not sure I follow the logic here.
Why would you annualize a "year to date" return? You are assuming you will have the exact same growth for the rest of the year as the first 4 months?
If I did that, based on my Fidelity YTD after Friday's close, my projected/annualized return (x * 12/4) would be 30%. That seems highly speculative and I personally predict my 2016 return to be closer to 15-20%.
livesoft wrote:Vanguard LifeStrategy Moderate Growth VSMGX has a 60/40 allocation and is up YTD 2.6%,
so I suspect that any YTD number above 5% may be calculated incorrectly. For example, many Quicken users get Quicken to annualize the return. So a 2.6% YTD return would be about 2.6% * 12 / 5 = 6.24% because we are only 5 months into a 12 month year.
Not sure I follow the logic here.
Why would you annualize a "year to date" return? You are assuming you will have the exact same growth for the rest of the year as the first 4 months?
If I did that, based on my Fidelity YTD after Friday's close, my projected/annualized return (x * 12/4) would be 30%. That seems highly speculative and I personally predict my 2016 return to be closer to 15-20%.
you answered your own question. People annualize their YTD returns because they are curious where their annual returns might end up if the rest of the year maintained the same pace. The same way a runner might convert their split times into a final race time. As you say, it is a pointless exercise. But as long as nobody is making any decisions based on such numbers, there's no harm in such idle "what if" scenarios.
If people want to compare YTD returns they should use the same methods and not annualize, but then again such comparisons are also pointless, so why bother even getting it right.
Compare your own returns to your own benchmarks. Report your differences if you like -- that could conceivably be instructive -- but reporting returns is just a sloppy way of reporting your AA, so rather than do that just report your AA (if you think there's a reason to do that).
Why? At age 92, I am giving my estate to charity and my heirs while I am still alive.
With luck, my last check will go to the undertaker who has instructions to give my body to my alma matter, The University of Miami, to advance medical research.
I have, and continue to have, a wonderful life. I am very grateful to the Bogleheads.
Thank you and best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
Why? At age 92, I am giving my estate to charity and my heirs while I am still alive.
With luck, my last check will go to the undertaker who has instructions to give my body to my alma matter, The University of Miami, to advance medical research.
I have, and continue to have, a wonderful life. I am very grateful to the Bogleheads.
Thank you and best wishes.
Taylor
Well said Taylor!
My money has no emotions. ~Moshe |
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I'm the world's greatest expert on my own opinion. ~Bruce Williams
I use a variant of the Permanent Portfolio called the "Golden Butterfly".
20% Large Blend Stock (+5.11)
20% Small Cap Value (+9.57)
20% Short Term Cash (1-3 year U.S. Treasury Bills) (+1.06)
20% Long Term U.S. Treasuries (+8.16)
20% Gold (+12.33)
Pretty happy since I was down 3% last year.
Last edited by invst65 on Thu Jun 02, 2016 6:50 pm, edited 1 time in total.
-24.58% YTD through the end of May, though the last few days have been very good so it is probably closer to something -15% of I take those into account. Balances out the +42.36 from last year, I guess.
I hope you keep a thread going, in whatever format.
