madsinger monthly report (December 2017)

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madsinger
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madsinger monthly report (December 2017)

Post by madsinger » Mon Jan 15, 2018 4:59 pm

Here is a big fat collection of portfolios, with their December 2017 returns, 2017 YTD return, and annualized returns since 1999, 2008, 2013, and 2015 (19 years, 10 years, 5 years, 3 years). 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.

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                                    CAGR    CAGR    CAGR    CAGR
                   Dec      YTD     since   since   since   since
                   2017     2017    2015    2013    2008    1999
VFINX              1.11%   21.67%  11.27%  15.63%   8.37%   6.07%
Sheltered Sam      1.36%   18.31%   9.65%  12.46%   6.84%   8.00%
Hot Hands          0.49%   11.67%   3.45%  10.60%   3.50%  10.71%
                  
Newsletter G       0.74%   22.40%  10.80%  15.15%   8.00%   9.93%
Newsletter G-IND   0.75%   20.50%  10.33%  14.19%   7.70%   7.19%
s&d                1.15%   16.60%   8.06%  10.02%   6.37%   7.64%
3 fund             1.24%   19.44%   8.51%  10.35%   6.13%   6.23%
LS G               1.18%   19.21%   8.47%  10.64%   5.75%   5.71%

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Newsletter CG      0.76%   19.50%   9.85%  13.61%   7.64%   8.34%
Wellington         1.24%   14.72%   8.41%  10.86%   7.51%   7.73%
STAR               1.08%   18.33%   7.98%   9.75%   6.67%   6.96%
coffeehouse        0.74%   11.25%   6.45%   8.63%   6.64%   7.20%
LS MG              1.00%   15.04%   7.01%   8.58%   5.42%   5.58%
                  
Newsletter Inc     0.86%   17.20%   8.31%  10.86%   7.28%   6.28%
Wellesley          1.05%   10.16%   6.44%   7.31%   7.11%   6.92%
LS CG              0.76%   10.92%   5.46%   6.47%   4.76%   5.17%
                  
madsinger          0.97%   13.05%   6.45%   8.44%   5.66%   
madsinger PP       1.21%   10.69%   4.49%         

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madsinger
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Re: madsinger monthly report (December 2017)

Post by madsinger » Mon Jan 15, 2018 5:04 pm

Portfolios all positive for 2017 --- not just positive, but double-digit positive! Ranging from 10% - 22%.

The S&P 500 was positive every single month in 2017 (as shown in the chart below). The permanent portfolio was up over 10%, which is really not an expected result. All four asset classes posting positive returns.

In all, a good year for most investors. Make sure your asset allocation is in line with your need, ability, and willingness to take risk. Don't let these recent results sway your thinking too much.

madsinger permanent portfolio for 2017:

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          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%

Code: Select all

July      2.03%  -0.59%     0.09%   2.35%    0.97%
August    0.26%   3.28%     0.10%   4.09%    1.92%
September 2.04%  -2.26%     0.10%  -3.22%   -0.84%
October   2.29%  -0.01%     0.10%  -0.81%    0.41%
November  3.04%   0.64%     0.10%   0.33%    1.05%
December  1.07%   1.60%     0.11%   2.12%    1.21%
               
YTD      21.29%   8.45%     1.11%  12.91%   10.69%
Last edited by madsinger on Mon Jan 15, 2018 6:05 pm, edited 1 time in total.

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Peculiar_Investor
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Re: madsinger monthly report (December 2017)

Post by Peculiar_Investor » Mon Jan 15, 2018 5:12 pm

The Madsinger monthly reports wiki page has been updated.
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madsinger
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Re: madsinger monthly report (December 2017)

Post by madsinger » Mon Jan 15, 2018 5:17 pm

A word about "Hot Hands". Last year, I sorted the Vanguard "investor class" funds for returns, and the highest returning fund for 2016 was the Small Value Index fund. That is the fund I chose for HH 2017. I had been informed by a couple of people privately, that the fund from the newsletter was a different fund --- and Admiral class fund that had no investor class. That fund returned a little more than Small Cap Value in 2017. I have chosen to stick with my fund and my methodology.

For 2017, the highest returning investor class Vanguard fund was "International Growth" with a return of 42.96%. I will be using this fund as the HH fund for 2018.

The hypothesis is that a "top performing fund from one year will do well the next year". I have been tracking this hypotheses for 19 years, and will continue to do so. You may look at the results and draw your own conclusions.

-Brad.

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Earl Lemongrab
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Re: madsinger monthly report (December 2017)

Post by Earl Lemongrab » Mon Jan 15, 2018 8:06 pm

madsinger wrote:
Mon Jan 15, 2018 5:17 pm
A word about "Hot Hands". Last year, I sorted the Vanguard "investor class" funds for returns, and the highest returning fund for 2016 was the Small Value Index fund. That is the fund I chose for HH 2017. I had been informed by a couple of people privately, that the fund from the newsletter was a different fund --- and Admiral class fund that had no investor class.
Which one is that?
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

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jmndu99
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Re: madsinger monthly report (December 2017)

Post by jmndu99 » Mon Jan 15, 2018 8:17 pm

Thanks again Brad. Your contribution every month is quite helpful

J

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jmndu99
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Re: madsinger monthly report (December 2017)

Post by jmndu99 » Mon Jan 15, 2018 8:31 pm

Earl Lemongrab wrote:
Mon Jan 15, 2018 8:06 pm
madsinger wrote:
Mon Jan 15, 2018 5:17 pm
A word about "Hot Hands". Last year, I sorted the Vanguard "investor class" funds for returns, and the highest returning fund for 2016 was the Small Value Index fund. That is the fund I chose for HH 2017. I had been informed by a couple of people privately, that the fund from the newsletter was a different fund --- and Admiral class fund that had no investor class.
Which one is that?
I think it was Vanguard Tax-Managed Small Cap

Best,
J

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Earl Lemongrab
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Re: madsinger monthly report (December 2017)

Post by Earl Lemongrab » Mon Jan 15, 2018 9:03 pm

jmndu99 wrote:
Mon Jan 15, 2018 8:31 pm
Earl Lemongrab wrote:
Mon Jan 15, 2018 8:06 pm
madsinger wrote:
Mon Jan 15, 2018 5:17 pm
A word about "Hot Hands". Last year, I sorted the Vanguard "investor class" funds for returns, and the highest returning fund for 2016 was the Small Value Index fund. That is the fund I chose for HH 2017. I had been informed by a couple of people privately, that the fund from the newsletter was a different fund --- and Admiral class fund that had no investor class.
Which one is that?
I think it was Vanguard Tax-Managed Small Cap
Ah. That's makes sense. I was thinking it was a different small value fund. I couldn't think of another in that class at Vanguard.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

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madsinger
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Re: madsinger monthly report (December 2017)

Post by madsinger » Tue Jan 16, 2018 8:45 am

Here are the returns for these three funds for 2016 and 2017:

Code: Select all

                   2016    2017
Tax Managed small 25.73%  13.05%
Small Value Adm   24.78%  11.80%
Small Value Inv   24.65%  11.67%
I have chosen to keep my charts using the investor class shares to keep them consistent over the years, and to allow them to be "realistic" for the largest pool of investors. (although, I'll admit that when I set my filter to "investor class", I did not realize that I would be omitting the TM fund).

-Brad.

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Re: madsinger monthly report (December 2017)

Post by linenfort » Tue Jan 16, 2018 10:14 am

Good stuff, and always appreciated.
On Vanguard's main page, you can just start typing your username to log in.

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Earl Lemongrab
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Re: madsinger monthly report (December 2017)

Post by Earl Lemongrab » Tue Jan 16, 2018 11:52 am

madsinger wrote:
Tue Jan 16, 2018 8:45 am
Here are the returns for these three funds for 2016 and 2017:

Code: Select all

                   2016    2017
Tax Managed small 25.73%  13.05%
Small Value Adm   24.78%  11.80%
Small Value Inv   24.65%  11.67%
I have chosen to keep my charts using the investor class shares to keep them consistent over the years, and to allow them to be "realistic" for the largest pool of investors. (although, I'll admit that when I set my filter to "investor class", I did not realize that I would be omitting the TM fund).
It's interesting that the tax-managed fund uses a different index (S&P 600) than the regular small-cap funds. I don't know if there is something inherently more tax-efficient about the index or what. That's the main reason for outperformance during the period, although "pure" S&P 600 index funds like VSMSX and VIOO did slightly better than VTMSX.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

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pennstater2005
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Re: madsinger monthly report (December 2017)

Post by pennstater2005 » Tue Jan 16, 2018 12:02 pm

Thanks Brad :happy
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iceport
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Re: madsinger monthly report (December 2017)

Post by iceport » Tue Jan 16, 2018 2:05 pm

Thanks Brad. It's still striking how comparable the returns are across the range of equity allocations (100% to 40%) for the 10- and 20 19-year periods. It will be interesting to see how that changes for the 10-year returns as the 2008/2009 crash drops out of view.

For comparison, my own returns are shown below, for an equity allocation that transitioned over the past 10 years from 70% to 56%, along with a couple of comparable (today) benchmark funds.

Code: Select all

                                  CAGR    CAGR    CAGR
                                  since   since   since
                          2017    2015    2013    2008
iceport:                 13.46%   6.94%   7.80%   6.38% (ended at 56%/44%, 38% of equity in foreign, 
                                                         modest SC & EM tilts, REIT/int'l RE)
TR 2020 (VTWNX):         14.08%   6.61%   8.50%   5.61% (ended at 55.29%/44.71%, 40% of equity in foreign)
LifeStrategy MG (VSMGX): 15.04%   7.01%   8.58%   5.42% (60.49%/39.51%, 40% of equity in foreign)
US REITS were the biggest drag this year, and small caps to a far lesser degree. The Vanguard EM fund took the lead with a 31.38% return.

2017 Returns (most personal portfolio constituents)
"Discipline matters more than allocation.” ─William Bernstein

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