madsinger monthly report (January 2018)

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madsinger monthly report (January 2018)

Post by madsinger » Mon Feb 12, 2018 6:10 pm

Here is a big fat collection of portfolios, with their January 2018 returns, 2018 YTD return, and annualized returns since 1999, 2008, 2013 and 2015 (19 years 1 month, 10 years 1 month, 5 years 1 month, 3 years 1 month). 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
                   Jan     YTD     since   since   since   since
                   2018    2018    2015    2013    2008    1999
VFINX              5.71%   5.71%  12.96%  16.62%   8.90%   6.35%
Sheltered Sam      3.61%   3.61%  10.64%  13.03%   7.16%   8.16%
Hot Hands          9.09%   9.09%   6.32%  12.33%   4.37%  11.17%
                  
Newsletter G       5.20%   5.20%  12.33%  16.04%   8.48%  10.18%
Newsletter G-IND   4.80%   4.80%  11.72%  14.99%   8.13%   7.42%
s&d                2.54%   2.54%   8.72%  10.39%   6.58%   7.75%
3 fund             4.11%   4.11%   9.69%  11.05%   6.50%   6.43%
LS G               4.16%   4.16%   9.67%  11.35%   6.13%   5.91%

Code: Select all

Newsletter CG      4.50%   4.50%  11.14%  14.36%   8.05%   8.55%
Wellington         2.88%   2.88%   9.18%  11.29%   7.74%   7.86%
STAR               3.54%   3.54%   8.98%  10.33%   6.98%   7.13%
coffeehouse        1.23%   1.23%   6.69%   8.75%   6.71%   7.24%
LS MG              2.87%   2.87%   7.80%   9.04%   5.67%   5.71%
                  
Newsletter Inc     3.70%   3.70%   9.36%  11.47%   7.60%   6.46%
Wellesley          0.56%   0.56%   6.45%   7.30%   7.11%   6.92%
LS CG              1.60%   1.60%   5.85%   6.69%   4.88%   5.23%
                  
madsinger          2.00%   2.00%   6.95%   8.72%   5.82%   
madsinger PP       1.48%   1.48%   4.86%         
Last edited by madsinger on Thu Mar 01, 2018 6:05 pm, edited 1 time in total.

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Re: madsinger monthly report (January 2018)

Post by madsinger » Mon Feb 12, 2018 6:16 pm

It's been a busy month (out of town, getting caught up at work, etc.) so the report is late this month.

Thinking way back to January (!) the stock market was up BIG. Bonds dropped some. REITs fell over -4%. The madsinger Permanent Portfolio behaved as it should have, with diverse asset classes going their own ways. Big gains in stocks and gold, steady cash, big drop in long bonds:

Code: Select all

          STOCK  LONG BOND   CASH     GOLD   PORTFOLIO 
January   5.69%   -3.23%     0.10%   3.28%    1.48%
Since I'm so late in the month, I thought it might be amusing to post how the PP is doing through February 9:

Code: Select all

          STOCK  LONG BOND   CASH     GOLD   PORTFOLIO 
January   5.69%   -3.23%     0.10%   3.28%    1.48%
February -7.17%   -3.67%     0.00%  -2.24%   -3.36%
               
YTD      -1.88%   -6.78%     0.10%   0.96%   -1.92%
Stocks hit very hard (as I'm sure we all know), but bonds also continuing their drop. Gold gave back quite a bit, but is currently up almost 1% for the year. My cash gets its interest at the end of the month, so there's no "gain" showing yet. It will be interesting to see how the rest of the month fairs.

We haven't felt this kind of stock volatility in a long time. I hope this test has helped you judge your tolerance for stock market risk. If the past couple of weeks have kept you up at night, you may want to reassess your tolerance for risk and (slowly) dial back some.

-Brad.

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Re: madsinger monthly report (January 2018)

Post by madsinger » Mon Feb 12, 2018 6:21 pm

When I first started doing these charts, smart phones did not exist, and I tried to format the charts to look good on a computer monitor. I still work at a computer all day, and rarely access the Boglehead site from a phone. However, I tried to look at these charts on my phone a while back, and realized that they're basically unreadable.

Would anyone be interested in "mobile" sized charts? If so, what format would make sense to you? I won't promise to do what everyone asks, but if there is some consensus (interest?) in something new (I would say "in addition to what I do now"), I'd like to know what people would like to see.

(that is...if anyone is really looking at these charts anymore!)

Thanks,
Brad.

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Re: madsinger monthly report (January 2018)

Post by jmndu99 » Mon Feb 12, 2018 6:23 pm

Thanks so much for your contribution Brad.

James

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Re: madsinger monthly report (January 2018)

Post by cfs » Mon Feb 12, 2018 6:26 pm

madsinger wrote:
Mon Feb 12, 2018 6:21 pm
. . . (that is...if anyone is really looking at these charts anymore!) . . .
I have no inputs for cell phone charts. And now to these charts. Actually, BH members ARE looking at these charts. And your hard work on getting all the data together is appreciated. Thank you. Muchas gracias por leer ~cfs~
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Re: madsinger monthly report (January 2018)

Post by jmndu99 » Mon Feb 12, 2018 7:03 pm

Thanks so much for your contribution Brad.

James

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Re: madsinger monthly report (January 2018)

Post by Peculiar_Investor » Mon Feb 12, 2018 7:10 pm

The wiki article Madsinger monthly reports has been updated.
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Re: madsinger monthly report (January 2018)

Post by jjface » Mon Feb 12, 2018 7:30 pm

madsinger wrote:
Mon Feb 12, 2018 6:21 pm
Would anyone be interested in "mobile" sized charts?

Thanks,
Brad.

Thanks as usual. Reading this on a phone and looks fine to me. Just have to scroll right a bit but easier enough to read.

Please do keep the reports coming! Very useful.

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Re: madsinger monthly report (January 2018)

Post by Portfolio7 » Mon Feb 12, 2018 7:30 pm

I love these monthly reports, thanks Madsinger! I am curious about something. Do you know the story behind those newsletters? I have to admit to being curious at their apparent outperformance of some very respectable funds and approaches. That may be due to slightly different Eq/Bond splits, but I'm curious what's going on there. These newsletters appear to be yielding some pretty amazing returns relative to perhaps similarly constructed funds (??), which is not something I really expect from a newsletter that an investing small fry like myself can access. At the same time, I realize that not all the portfolios in each grouping have the same stock and bond split, so I was thinking that may be the reason, or they could simply be very high volatility portfolios?

Do you or have you considered following the newsletter advice? Appreciate your thoughts whenever you get a moment. Sounds like you've been busy lately (I'm traveling on business this week for the 2nd time in the past 4 weeks, I've left a ton of things undone so far this year.)
Last edited by Portfolio7 on Mon Feb 12, 2018 7:30 pm, edited 1 time in total.
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Re: madsinger monthly report (January 2018)

Post by jjface » Mon Feb 12, 2018 7:30 pm

madsinger wrote:
Mon Feb 12, 2018 6:21 pm
Would anyone be interested in "mobile" sized charts?

Thanks,
Brad.

Thanks as usual. Reading this on a phone and looks fine to me. Just have to scroll right a bit but easier enough to read.

Please do keep the reports coming! Very useful.

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Re: madsinger monthly report (January 2018)

Post by cfs » Mon Feb 12, 2018 7:55 pm

Follow up to the "mobile sized charts" issue.

Just checked the report using my phone, the charts looks perfect when using the phone horizontally [when used vertically I need to scroll right, but that's not an issue].

Gracias por leer ~cfs~
~ Member of the Active Retired Force, portfolio withdrawal and spending rate 1.7% ~

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Re: madsinger monthly report (January 2018)

Post by ram » Mon Feb 12, 2018 8:05 pm

I look at your charts every month but will never look at them on a cell phone. Thanks for all your work.
Ram

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Re: madsinger monthly report (January 2018)

Post by Mel Lindauer » Mon Feb 12, 2018 8:21 pm

cfs wrote:
Mon Feb 12, 2018 7:55 pm
Follow up to the "mobile sized charts" issue.

Just checked the report using my phone, the charts looks perfect when using the phone horizontally [when used vertically I need to scroll right, but that's not an issue].

Gracias por leer ~cfs~

Same for me. Look perfectly fine when I look at the chart with my phone turned horizontally. In fact, they don't even take up all of my screen so I can even enlarge them a tiny bit.
Best Regards - Mel | | Semper Fi

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Re: madsinger monthly report (January 2018)

Post by Taz » Tue Feb 13, 2018 7:25 am

Madsinger - I appreciate these reports - thank you. I am curious about the makeup of the newsletter portfolios, although not enough to subscribe to any of them (past performance is no .......) .

BTW, looks great in landscape on my phone.
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Re: madsinger monthly report (January 2018)

Post by ResearchMed » Tue Feb 13, 2018 7:47 am

ram wrote:
Mon Feb 12, 2018 8:05 pm
I look at your charts every month but will never look at them on a cell phone. Thanks for all your work.
Same here.

VERY appreciative of your efforts!

Thank you.

RM
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Re: madsinger monthly report (January 2018)

Post by madsinger » Tue Feb 13, 2018 11:31 am

Portfolio7 wrote:
Mon Feb 12, 2018 7:30 pm
I love these monthly reports, thanks Madsinger! I am curious about something. Do you know the story behind those newsletters? I have to admit to being curious at their apparent outperformance of some very respectable funds and approaches. That may be due to slightly different Eq/Bond splits, but I'm curious what's going on there. These newsletters appear to be yielding some pretty amazing returns relative to perhaps similarly constructed funds (??), which is not something I really expect from a newsletter that an investing small fry like myself can access. At the same time, I realize that not all the portfolios in each grouping have the same stock and bond split, so I was thinking that may be the reason, or they could simply be very high volatility portfolios?

Do you or have you considered following the newsletter advice? Appreciate your thoughts whenever you get a moment. Sounds like you've been busy lately (I'm traveling on business this week for the 2nd time in the past 4 weeks, I've left a ton of things undone so far this year.)
Taz wrote:
Tue Feb 13, 2018 7:25 am
Madsinger - I appreciate these reports - thank you. I am curious about the makeup of the newsletter portfolios, although not enough to subscribe to any of them (past performance is no .......) .

BTW, looks great in landscape on my phone.
Responding to a couple of questions about the newsletter portfolios....

I do not subscribe to the newsletter. I am personally not a fan of newsletters, but I am not an enemy of them either. I think many investors would be much better off paying $100 per year and following advice that uses very low cost Vanguard funds, has very low turnover, as long as they pick an asset allocation that works for their situation, rather than paying an adviser literally thousands of dollars in fees that uses high cost funds, too many funds, and too much turnover. I don't think most Boglehead followers fall into this latter category.

I personally would not consider following any of the newsletter's portfolios, but that's just my preference.

That said...one can not argue with the past results. Through private correspondence with people who do subscribe to the newsletter, I have been told that the stock/bond allocations of the portfolios tend to be more aggressive than the categories I have put them in on the charts. The two growth portfolios have had more than 80% stocks, moderate growth more than 60% stocks, "income" more than 40% stocks. This "tilt to stocks" has obviously been very helpful to the portfolios. I've also been told that in the past few years, they have shied away from International stocks, which has also been a plus. I don't hold this against them....this is precisely what one pays an adviser to do...assess the markets, make their predictions, and structure their portfolios accordingly. I do not know how these portfolios are "tilted" today, and even if I did, it would not be right to publicize this!

When I started these charts almost 15 years ago, there had been (somewhat heated) discussions about how these portfolios were far outpacing the S&P 500 index fund (after a terrible three year stretch from 2000-2002). One can look at the charts today and see that the S&P 500 index fund is beating all portfolios in 1, 3, 5, and 10 year returns. Is this a fair comparison? A reason to sell everything and buy the S&P 500 fund? Probably not. Similarly, the Hot Hands strategy was clobbering everything back then...today, it has the lowest 10 year return of all "portfolios" tracked. If nothing else, I hope these two examples point out the both the usefulness of these charts, and the uselessness of these charts when trying to predict what the "best" portfolio going forward will be.

The best advice I can offer, which I attribute of Larry Swedroe (because I read it in his books first) is to find an asset allocation that best matches your need, ability, and willingness to take risk, and to find a low cost, low turnover method to implement it. Simple..but maybe not easy!

-Brad.

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Re: madsinger monthly report (January 2018)

Post by MariaT » Tue Feb 13, 2018 11:59 am

You bet, I read your report every month. It's something I look forward to each month.

Thank for your continued dedication and know that it is very much appreciated.

Thanks again, Brad.

Warm regards,
MariaT

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Re: madsinger monthly report (January 2018)

Post by Portfolio7 » Wed Feb 14, 2018 9:17 pm

madsinger wrote:
Tue Feb 13, 2018 11:31 am
The best advice I can offer, which I attribute of Larry Swedroe (because I read it in his books first) is to find an asset allocation that best matches your need, ability, and willingness to take risk, and to find a low cost, low turnover method to implement it. Simple..but maybe not easy!
-Brad.
Always good advice... However, if I think I see a bargain out there, I have a small portion of my portfolio that I am allowed to invest in any manner I choose, per my IPS. Plus, my 401k has Vanguard funds and other funds in the same space, and in several cases the other Index fund (which is sometimes Vanguard-run also) gives Vanguard a run for the money in terms of fees and volatility. In any case, someone has either been pretty lucky or pretty good or playing a different game, and I was curious. Thanks for the response.
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Re: madsinger monthly report (January 2018)

Post by pennstater2005 » Wed Feb 14, 2018 10:00 pm

I think the charts look fine. A little scrolling is no big deal.

And plenty of folks look at your charts each month as well as look forward to them.... myself included.
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Re: madsinger monthly report (January 2018)

Post by bengal22 » Mon Feb 19, 2018 8:30 pm

madsinger wrote:
Mon Feb 12, 2018 6:21 pm
When I first started doing these charts, smart phones did not exist, and I tried to format the charts to look good on a computer monitor. I still work at a computer all day, and rarely access the Boglehead site from a phone. However, I tried to look at these charts on my phone a while back, and realized that they're basically unreadable.

Would anyone be interested in "mobile" sized charts? If so, what format would make sense to you? I won't promise to do what everyone asks, but if there is some consensus (interest?) in something new (I would say "in addition to what I do now"), I'd like to know what people would like to see.

(that is...if anyone is really looking at these charts anymore!)

Thanks,
Brad.
I definitely look at these reports and use coffeehouse and 3 fund(as well as Target 2015, Target 2020, and VG Balanced) to benchmark my portfolio. If I had a pure 3 fund portfolio I would not need to benchmark but since I have a 3 Fund with a little mix of stuff, I like to compare my results with a pure result. As far as telephone, I have no input because I always access these reports via my laptop. Status Quo works for me. Thanks again.
"Earn All You Can; Give All You Can; Save All You Can." .... John Wesley

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Re: madsinger monthly report (January 2018)

Post by madsinger » Thu Mar 01, 2018 6:07 pm

When putting the February 2018 data into my spreadsheet, I realized that I had made a mistake in my January 2018 spreadsheet (pointed to the wrong cell). This affected the 3,5,10,19 year returns for the portfolios that are made up of more than one fund. I have updated this spreadsheet (at the beginning of this thread) to reflect this correction.

-Brad.

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Re: madsinger monthly report (January 2018)

Post by cfs » Thu Mar 01, 2018 6:23 pm

Mister Brad, thank you for the update, and looking forward to the February 2018 report. Gracias por leer ~cfs~
~ Member of the Active Retired Force, portfolio withdrawal and spending rate 1.7% ~

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Re: madsinger monthly report (January 2018)

Post by jmndu99 » Thu Mar 01, 2018 9:12 pm

madsinger wrote:
Thu Mar 01, 2018 6:07 pm
When putting the February 2018 data into my spreadsheet, I realized that I had made a mistake in my January 2018 spreadsheet (pointed to the wrong cell). This affected the 3,5,10,19 year returns for the portfolios that are made up of more than one fund. I have updated this spreadsheet (at the beginning of this thread) to reflect this correction.

-Brad.
Thank you for your dedication Brad

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Re: madsinger monthly report (January 2018)

Post by jmndu99 » Sat Mar 03, 2018 3:10 pm

madsinger wrote:
Thu Mar 01, 2018 6:07 pm
When putting the February 2018 data into my spreadsheet, I realized that I had made a mistake in my January 2018 spreadsheet (pointed to the wrong cell). This affected the 3,5,10,19 year returns for the portfolios that are made up of more than one fund. I have updated this spreadsheet (at the beginning of this thread) to reflect this correction.

-Brad.
Thank you for your dedication Brad

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Re: madsinger monthly report (January 2018)

Post by investor » Sun Mar 04, 2018 2:35 pm

Thanks Brad for the monthly reports. I enjoy reading them.

For those asking about the newsletter, I am a long term subscribers as I am here and a few other places. I do not follow suggestions from anyone. The newsletter forum is very good. I suggest you give it a trial for a year and in fact might be able to cancel after a month or two with a refund. AAII also has a good internet site.

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Re: madsinger monthly report (January 2018)

Post by ResearchMed » Sun Mar 04, 2018 2:51 pm

investor wrote:
Sun Mar 04, 2018 2:35 pm
Thanks Brad for the monthly reports. I enjoy reading them.

For those asking about the newsletter, I am a long term subscribers as I am here and a few other places. I do not follow suggestions from anyone. The newsletter forum is very good. I suggest you give it a trial for a year and in fact might be able to cancel after a month or two with a refund. AAII also has a good internet site.

investor
They do indeed give the promised refund if requested in the time specified.

Also, a few months ago, there was a $48 (or 49?) annual rate offered briefly, so we decided to give it another go.

We don't follow any of the "portfolios" faithfully (we don't follow anything much "faithfully"), but we've found some good information in some of the columns, and also (originally, early on) in some of the suggested "alternate funds" for closed Vanguard funds.
Those columns were especially helpful when I was at the "just getting started" stage, but there is still often useful information, or just things to think about and learn more.

The "full price" offers are silly, given the frequent discounting to something like $98 or $89 per year.
At half of that, it was definitely time (for us) to try again, and see how much it offered at the stage we are now at.

We also subscribed for maybe two years to the Morningstar Fund Advisor (name might be wrong?), but found that we could really get as much, or more, from Schwab's free online Mutual Fund Research, albeit without any "recommendations", which weren't the point anyway. We'd use the "lists" for fund names to research on Schwab anyway...

RM
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Re: madsinger monthly report (January 2018)

Post by Scooter57 » Mon Mar 05, 2018 12:01 pm

I've also found the newsletter helpful. I learned about it here from Madsinger's report and subscribed five years ago, when I was just starting to study investing. I only took it for a year, but did follow his advice to invest in Prime Cap Oddyssey Agressive Growth (POAGX) which I have continued to invest in quite happily ever since. It has done very well for me.

My only cavil about the recommendations he gives is that many are not suitable for a taxable account because they distribute a lot of capital gains each year. The assumption must be that everyone in investing in a retirement account.

I recently resubscribed as a result of a very cheap offer and have taken his advice to invest in the International Growth Fund rather than just the Total International I hold now. I have learned enough about investing to have a better sense of what is in these funds and I liked what I saw in the International Growth Fund and that it doesn't have a history of capital gains distributions or large dividends. Time will tell how good a suggestion this was, but since I am starting out very small with this fund, at worst it gives me a tax loss harvesting opportunity. Mostly I like it because it looks like an international choice that will fit in well with my taxable account. I'm pretty much maxed in the IRA.

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Re: madsinger monthly report (January 2018)

Post by KSActuary » Mon Mar 05, 2018 4:50 pm

New to the thread but where can someone find the "newsletter"?

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Re: madsinger monthly report (January 2018)

Post by investor » Tue Mar 06, 2018 2:04 pm

newsletter is subscription ; "The Independent Adviser for Vanguard Funds"
www.adviseronline.com. Advertised in most issues of Kiplingers
subscription costs change with the time of day, even for long term subscribers.

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