madsinger monthly report (August 2017)

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
User avatar
madsinger
Posts: 863
Joined: Sat Sep 29, 2007 3:26 pm

madsinger monthly report (August 2017)

Post by madsinger » Fri Sep 01, 2017 11:32 am

Here is a big fat collection of portfolios, with their August 2017 returns, 2017 YTD return, and annualized returns since 1999, 2007, 2012 and 2014 (18 years 8 months, 10 years 8 months, 5 years 8 months, 3 years 8 months). I broke them into four categories, roughly corresponding to 100/0, 80/20, 60/40, 40/60 stock/bond portfolios, sorted by 10 year Total Return. The 3 fund is 50/30/20 Total Stock/Total Int'l/Total Bond. The s&d is 10 each of VFINX, VIVAX, NAESX, VISVX, VGSIX, 25 VGTSX, 5 VINEX, 20 VBMFX. The coffeehouse is a 60/40 described at The Coffeehouse Investor. The Newsletter portfolios are from a newsletter following Vanguard funds. William Bernstein's "Sheltered Sam" is an all stock portfolio which is 20% VFINX, 25% VIVAX, 5% NAESX, 15% VISVX, 10% VGSIX, 3% VGPMX, 5% each VEURX, VPACX, VEIEX, and 7% VTRIX. The madsinger portfolio is my real-world portfolio, roughly 50/6/11/33 stock/REIT/Gold/bond. The madsingerPP portfolio is the "permanent portfolio" portion of my portfolio consisting of 25% each of stock, long bond, cash, gold.

-Brad.

Code: Select all

                                  CAGR    CAGR    CAGR    CAGR
                  Aug     YTD     since   since   since   since
                  2017    2017    2014    2012    2007    1999
VFINX             0.30%  11.82%  10.39%  14.93%   7.51%   5.70%
Sheltered Sam    -0.01%   9.78%   8.31%  12.39%   5.97%   7.71%
Hot Hands        -1.45%   1.82%   1.31%   9.96%   2.87%  10.37%
                  
Newsletter G      0.18%  13.30%   9.53%  14.39%   7.66%   9.66%
Newsletter G-IND -0.09%  11.00%   8.92%  13.53%   7.49%   6.85%
3 fund            0.43%  12.11%   6.79%  10.46%   5.94%   5.99%
s&d               0.09%   9.82%   6.88%  10.29%   5.74%   7.44%
LS G              0.44%  12.04%   7.09%  10.74%   5.48%   5.46%

Code: Select all

Newsletter CG     0.36%  12.50%   9.24%  13.29%   7.37%   8.15%
Wellington        0.15%   7.59%   7.70%  10.58%   7.18%   7.51%
STAR              0.54%  12.00%   6.94%   9.98%   6.32%   6.78%
coffeehouse       0.12%   6.31%   6.51%   8.87%   6.02%   7.08%
LS MG             0.54%   9.77%   6.32%   8.76%   5.31%   5.42%
                  
Wellesley         0.53%   6.00%   6.37%   7.50%   6.81%   6.83%
Newsletter Inc    0.27%  11.20%   8.30%  10.62%   6.65%   6.10%
LS CG             0.66%   7.48%   5.46%   6.74%   4.81%   5.09%
                  
madsinger         0.62%   8.30%   5.66%   8.69%   5.38%   
madsinger PP      1.92%   8.73%            
Last edited by madsinger on Tue Sep 05, 2017 9:46 am, edited 1 time in total.

User avatar
madsinger
Posts: 863
Joined: Sat Sep 29, 2007 3:26 pm

Re: madsinger monthly report (August 2017)

Post by madsinger » Fri Sep 01, 2017 11:41 am

Stocks ended the month on a strong note, bringing most of the portfolios positive for the month.

The trend of large beating small and growth beating value continued this month. So, any portfolios tilting towards "small" and "value" underperformed their total stock returns again. For the year, total US up almost +12%, while small value is up just under +2%.

International continues to shine (helped by a weaker dollar) --- total int'l up over +19%, emerging index over +24% YTD.

Long bonds and Gold both had strong (dare I say "outsized"?) returns for August up over +3% and +4% respectively. As a result, the permanent portfolio had it's best month versus all of the other portfolios for the year.

Code: Select all

          STOCK  LONG BOND CASH    GOLD   PORTFOLIO 
January   1.85%    0.65%   0.08%   5.32%    1.93%
February  3.92%    1.57%   0.08%   3.17%    2.16%
March     0.07%   -0.58%   0.09%  -0.25%   -0.16%
April     0.99%    1.56%   0.08%   1.67%    1.07%
May       1.39%    1.74%   0.09%  -0.08%    0.77%
June      0.56%    0.64%   0.09%  -2.13%   -0.21%
July      2.03%   -0.59%   0.09%   2.35%    0.97%
August    0.26%    3.28%   0.10%   4.09%    1.92%
               
YTD      11.57%    8.54%   0.71%  14.80%    8.73%

gkaplan
Posts: 7034
Joined: Sat Mar 03, 2007 8:34 pm
Location: Portland, Oregon

Re: madsinger monthly report (August 2017)

Post by gkaplan » Fri Sep 01, 2017 8:27 pm

See you next month.
Gordon

User avatar
LadyGeek
Site Admin
Posts: 39961
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: madsinger monthly report (August 2017)

Post by LadyGeek » Fri Sep 01, 2017 9:39 pm

This thread is now in the wiki: Madsinger monthly reports
To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

User avatar
madsinger
Posts: 863
Joined: Sat Sep 29, 2007 3:26 pm

Re: madsinger monthly report (August 2017)

Post by madsinger » Tue Sep 05, 2017 9:46 am

updated chart with newsletter results.

-Brad.

pkcrafter
Posts: 11876
Joined: Sun Mar 04, 2007 12:19 pm
Location: CA
Contact:

Re: madsinger monthly report (August 2017)

Post by pkcrafter » Tue Sep 05, 2017 10:27 am

Thanks Brad, your monthly reports are a nice contribution to the Bogleheads. The data is very interesting because it shows the market unwinding from the tech crash since 2000 (S&P500), much of it due to the collapse of a lot of tech stocks, but also investor behavior as they abandoned the 500 and went to value funds. Then came the rewinding (recovery). The takeaway there is an investor, for the past 17 years would have done better holding a 60/40 portfolio.

The market is now wound tight again, and we can expect "something" to happen, but it won't be as catastrophic as the tech crash. Maybe a correction, or something more dramatic if a shock (black swan) is introduced.

Question: Are the costs of the newsletters accounted for in the returns? Do you know what the newsletters do cost?

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.

ResearchMed
Posts: 4969
Joined: Fri Dec 26, 2008 11:25 pm

Re: madsinger monthly report (August 2017)

Post by ResearchMed » Tue Sep 05, 2017 10:39 am

pkcrafter wrote:
Tue Sep 05, 2017 10:27 am
Thanks Brad, your monthly reports are a nice contribution to the Bogleheads. The data is very interesting because it shows the market unwinding from the tech crash since 2000 (S&P500), much of it due to the collapse of a lot of tech stocks, but also investor behavior as they abandoned the 500 and went to value funds. Then came the rewinding (recovery). The takeaway there is an investor, for the past 17 years would have done better holding a 60/40 portfolio.

The market is now wound tight again, and we can expect "something" to happen, but it won't be as catastrophic as the tech crash. Maybe a correction, or something more dramatic if a shock (black swan) is introduced.

Question: Are the costs of the newsletters accounted for in the returns? Do you know what the newsletters do cost?

Paul
From recent past email promos, the newsletter is available, if one waits, for a serious discount that can be as low as $89 (very rare) or $99 per year.
Otherwise, at full rack rate, it can be more than $200/yr, but I'm forgetting just how much more.

I learned of a few good funds, and there was some discussion that I found helpful early on when I was just "starting" to pay attention, etc.
I don't currently subscribe, but might again (but only at the $89-99 rate).

Cost of newsletter isn't included. Not sure how that could be done, as it would be differing percentages depending upon amount invested.

RM
This signature is a placebo. You are in the control group.

User avatar
madsinger
Posts: 863
Joined: Sat Sep 29, 2007 3:26 pm

Re: madsinger monthly report (August 2017)

Post by madsinger » Tue Sep 05, 2017 10:40 am

pkcrafter wrote:
Tue Sep 05, 2017 10:27 am
Question: Are the costs of the newsletters accounted for in the returns? Do you know what the newsletters do cost?
The cost of the newsletter is not included in the returns. I am not a subscriber, so I don't have a first hand account. My understanding is the cost is about $100 per year. On a $100,000 portfolio, that would be 0.1%, on million dollars...0.01%. While all costs matter, I do not find this particularly onerous. (skip a couple of pumpkin spice lattes a month....)

I'm not a fan of newsletters, but in this case, the past results do speak for themselves. For an investor that does not have the confidence to develop and maintain a portfolio, I do believe that if they follow the portfolio advice given in the newsletter, they would be much better off than going to an "assets under management" adviser that would take 10 to 100 times that "subscription" fee.

-Brad.

pkcrafter
Posts: 11876
Joined: Sun Mar 04, 2007 12:19 pm
Location: CA
Contact:

Re: madsinger monthly report (August 2017)

Post by pkcrafter » Tue Sep 05, 2017 12:17 pm

madsinger wrote:
Tue Sep 05, 2017 10:40 am
pkcrafter wrote:
Tue Sep 05, 2017 10:27 am
Question: Are the costs of the newsletters accounted for in the returns? Do you know what the newsletters do cost?
The cost of the newsletter is not included in the returns. I am not a subscriber, so I don't have a first hand account. My understanding is the cost is about $100 per year. On a $100,000 portfolio, that would be 0.1%, on million dollars...0.01%. While all costs matter, I do not find this particularly onerous. (skip a couple of pumpkin spice lattes a month....)

I'm not a fan of newsletters, but in this case, the past results do speak for themselves. For an investor that does not have the confidence to develop and maintain a portfolio, I do believe that if they follow the portfolio advice given in the newsletter, they would be much better off than going to an "assets under management" adviser that would take 10 to 100 times that "subscription" fee.

-Brad.
Thanks Brad and Research Med. Yes, a newsletter is cheaper than an advisor, but again, we have no guarantee that good performance will continue.

Brad wrote:
The trend of large beating small and growth beating value continued this month. So, any portfolios tilting towards "small" and "value" underperformed their total stock returns again. For the year, total US up almost +12%, while small value is up just under +2%.
This is precisely why it's very difficult to hold and capture the small premium. It also probably why there is a small premium in the first place. As for growth, I wonder if it's ever a good idea to favor growth because when it becomes dominant, the market is overvalued. Eventually we will experience Bogle's reversion to the mean, and value will dominate and be the place for reactive investors.

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.

investor
Posts: 1000
Joined: Mon Feb 19, 2007 10:50 pm

Re: madsinger monthly report (August 2017)

Post by investor » Tue Sep 05, 2017 1:04 pm

Thanks Brad.

as a note, the newsleter can almost always be had for $99/yr or less a year...They are always changing their price and do not favor current subscribers. An interesting way to do business.

investor

User avatar
madsinger
Posts: 863
Joined: Sat Sep 29, 2007 3:26 pm

Re: madsinger monthly report (August 2017)

Post by madsinger » Wed Sep 13, 2017 10:19 am

Rebalanced yesterday. Sold a chunk of US stock and a bigger chunk of International stock to buy short term bonds. The records being set in the stock indexes finally pushed them over my (tight) rebalancing band. The laggard this year has been cash and short term bonds, as long bonds, gold and stocks have all risen for the year.

My last rebalancing took place last December. In one place, I swapped small-cap value for long-term bonds. It "felt wrong", but I followed my plan. From last Dec 9 through yesterday, small cap value is up +1.40% and long bonds are up +8.07%. I also rebalanced into gold that day, and since then, IAU is up +15.6%. I say this not to "gloat", but to remind myself that the appeal of having an AA and a rebalancing plan is that it takes my "gut reaction" out of my investments, and allows me to make rational decisions when I may be at my least rational!

Happy investing all!

livesoft
Posts: 55988
Joined: Thu Mar 01, 2007 8:00 pm

Re: madsinger monthly report (August 2017)

Post by livesoft » Wed Sep 13, 2017 10:48 am

We also hit a high trigger point based on Monday's closing prices and rebalanced, but bought some small-cap value.

Did you rebalance back to the center point of your rebalancing bands or to just under the trigger point?
This signature message sponsored by sscritic: Learn to fish.

User avatar
madsinger
Posts: 863
Joined: Sat Sep 29, 2007 3:26 pm

Re: madsinger monthly report (August 2017)

Post by madsinger » Wed Sep 13, 2017 11:03 am

livesoft wrote:
Wed Sep 13, 2017 10:48 am
We also hit a high trigger point based on Monday's closing prices and rebalanced, but bought some small-cap value.

Did you rebalance back to the center point of your rebalancing bands or to just under the trigger point?
I go back to the AA target...basically the center of the band. Usually when something "trips" the band, (in this case, short bond fell below 10% of target) I move other stuff to get this...in this case sold some stocks to get there. REITs are about -5% under target now, and are the furthest away...but still a ways from triggering anything!

-Brad.

livesoft
Posts: 55988
Joined: Thu Mar 01, 2007 8:00 pm

Re: madsinger monthly report (August 2017)

Post by livesoft » Wed Sep 13, 2017 11:35 am

Thanks! I'm too scared to go all the way back to center, but maybe your bands are tight enough that I could do that. For instance, you said ST bonds were 10% below target, if target was 8%, then falling to 7.2% is "tight" and still 10% below target, so rebalancing back to 8% would be easy for me to do.

So for me, I hate to move quite a bit all at once, so it seems my trigger points don't require moving more than about 1% to 3% of total portfolio value. However, in certain circumstances, I am happy to move 5% all at once. Thanks again.
This signature message sponsored by sscritic: Learn to fish.

User avatar
madsinger
Posts: 863
Joined: Sat Sep 29, 2007 3:26 pm

Re: madsinger monthly report (August 2017)

Post by madsinger » Wed Sep 13, 2017 3:37 pm

livesoft wrote:
Wed Sep 13, 2017 11:35 am
Thanks! I'm too scared to go all the way back to center, but maybe your bands are tight enough that I could do that. For instance, you said ST bonds were 10% below target, if target was 8%, then falling to 7.2% is "tight" and still 10% below target, so rebalancing back to 8% would be easy for me to do.
I also do not like the idea of moving a 5% chunk of my portfolio all at once. Most of my asset pie slices are "1/9" of my portfolio ... 11.11%, so a 10% move is really only moving 1.11% of the portfolio. After a few years of doing this, I now look forward to selling high and buying low. And, more often than not, I have been "rewarded" in the short term for these actions.

-Brad.

Post Reply