Bogleheads Uniform Returns -- December 2018

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longinvest
Posts: 4092
Joined: Sat Aug 11, 2012 8:44 am

Bogleheads Uniform Returns -- December 2018

Post by longinvest » Tue Jan 01, 2019 4:54 pm

This is a thread for Bogleheads to report their uniform returns for periods* ending on December 31, 2018.

Members who wish to participate are invited to uniformly calculate their portfolio returns using our wiki's calculating personal returns spreadsheet. The spreadsheet can be either downloaded, or it can be used online within a Google account. To use it online:
  1. Sign into a Google account (if not already signed in).
  2. Make a copy of the online spreadsheet as follows: File -> Make a copy...
  3. The copy is private and can be modified at will.
An illustrated example, for using the spreadsheet, is provided in this post.
An example return report can be found in this post.

THREE SIMPLE RULES -- WHEN REPORTING RETURNS
  1. Trailing returns must be calculated using our wiki's calculating personal returns spreadsheet.
  2. The asset allocation of the portfolio, and any slow change policy (such as "age in bonds"), must be disclosed along with trailing returns.
  3. A new spreadsheet must be used (e.g. restarting from zero) after every significant asset allocation change (except for a slow change due to a predetermined and fully disclosed policy, such as "age in bonds").
For example, a participant wouldn't report about trailing 5 year returns if the portfolio's asset allocation had significantly changed 4 years ago; instead, a new spreadsheet would be started reporting trailing returns for periods no longer than 4 years.

So, what are your uniformly calculated trailing time-weighted returns?


ADDENDUM I

This is the first of a series of monthly threads dedicated to uniformly-calculated trailing* comparable time-weighted returns for portfolios using a fixed or a slowly changing (such as "age in bonds") asset allocation.

The objectives of this series of threads are:
  1. To help new members learn about the distinction between different type of returns, such as comparable time-weighted portfolio returns, incomparable money-weighted investor returns, and meaningless Beardstown Ladies returns.
  2. To help participating members (including myself) to stay the course by sticking to their asset allocation to avoid breaking their series of monthly posts and be forced to restart a new series from zero again. (See the rules).
  3. To learn about the variety of asset allocations held by participating members.

* 1 month, 3 months, 6 months, YTD, 1 year, 3 years**, 5 years**, and 10 years**.
** Annual compound returns.


ADDENDUM II

The goal of the three simple rules is just to keep this series of threads useful and actionable.

Rule 3, in particular, is meant to help participants stay the course. Unfortunately, rule 3 affects me; I've been 50/50 stocks/bonds since 2014, but because of a significant change I made within my bond allocation in April 2018, I won't be able to report about returns going farther back than April 30, 2018, less than one year ago. This also means that I'll only be able to report about my portfolio's trailing 10-year return on April 30, 2028. I hope that I'll stay the course until then. :annoyed
Last edited by longinvest on Wed Jan 02, 2019 1:07 pm, edited 29 times in total.
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Topic Author
longinvest
Posts: 4092
Joined: Sat Aug 11, 2012 8:44 am

Re: Bogleheads Uniform Returns -- December 2018

Post by longinvest » Tue Jan 01, 2019 5:04 pm

I'll start.

Trailing portfolio return (time-weighted return, comparable return)

Portfolio return as of 12/31/2018
1 month -2.2%
3 months -4.8%
6 months -5.8%
YTD --
1 year --
3 years* --
5 years* --
10 years* --

Asset allocation (since April 30, 2018): 25% domestic stocks (VCN), 25% international stocks (VXC), 25% nominal long bonds (VLB), and 25% inflation-indexed long bonds (ZRR), where bonds are all domestic**.
Change policy: none (fixed asset allocation for life).

I can't even report a 1 year return (for 2018), as I've changed my asset allocation in April. That's the thing with the Bogleheads (and its sister Canadian site, Financial Wisdom Forum); we learn new things about investments and we change our asset allocation as a result (we definitely don't want to stay the wrong course). I was able to stay the course for 6 years, from early 2008 to the end of 2013. But, having learned about bonds and improved my understanding of assets on this site, after joining in 2012, I added bonds to my portfolio in early 2014 and simplified my stock holdings to 2 ETFs (domestic and international).

In all fairness, I've stayed the course with a 50/50 stocks/bonds allocation since 2014. But, I learned more about inflation-indexed bonds (e.g. TIPS for US investors), and also about how bond funds of various duration behaved, leading to significant changes within my bond allocation. I'm now pretty confident I won't learn about new fundamental knowledge about asset classes and that I'll be able to stay the course ahead. But, predicting the future is difficult. We'll see. :wink:

* Annual compound return.
** Domestic means Canada, for me.
Last edited by longinvest on Wed Jan 02, 2019 1:23 pm, edited 10 times in total.
Bogleheads investment philosophy | One-ETF global balanced index portfolio | VPW

Topic Author
longinvest
Posts: 4092
Joined: Sat Aug 11, 2012 8:44 am

Re: Bogleheads Uniform Returns -- December 2018

Post by longinvest » Tue Jan 01, 2019 9:23 pm

Filling the spreadsheet is pretty easy. Here's an example of how I filled my spreadsheet.

1- I selected the "Portfolio" sheet and I entered a starting month and provided account names (note that the account names are fake in the image):

Image


2- I selected the "Account 1" sheet which automatically got an appropriate title, and had a red warning about missing data:

Image


3- I added my monthly total contributions, total withdrawals, and closing account balances (note that the numbers are fake in the image).

Yes, that's right. There are only 3 numbers to provide per month. These numbers were easy to find on my monthly account statements.

Image


4- I selected the "Account 2" sheet and filled it, like I did for "Account 1".

5- I selected the "Missing" sheet to make sure I didn't forget to enter any data. The spreadsheet informed me that everything was fine (in green).

6- I finally selected the "Returns" sheet to get my returns, from which I cut and pasted the "Trailing portfolio return" part into my post.

7- As a bonus, I got a growth of $10,000 chart of my portfolio:

Image

That's it.

Have a Happy New Year 2019, and may the :moneybag positive returns :moneybag be with you!
Bogleheads investment philosophy | One-ETF global balanced index portfolio | VPW

Expro
Posts: 85
Joined: Mon Feb 08, 2016 3:37 am
Location: Girona

Re: Bogleheads Uniform Returns -- December 2018

Post by Expro » Tue Jan 01, 2019 10:50 pm

Here you go...

Trailing portfolio return (time-weighted return, comparable return)

Portfolio return as of 12/31/2018
1 month -4.8%
3 months -7.8%
6 months -4.3%

YTD -3.8%

AA 61/29/10 EOY at

42% US (VTSAX, ITOT, SCHB)
14% International (VTIAX,IXUS)
5% REITS (FSRNX,VGSLX)
29% Intermediate Bonds (VWIUX,FXNAX)
10% CDs/Treasuries/Cash

No rebalancing in 2018. No AA change but for market drift.

spammagnet
Posts: 1075
Joined: Wed Apr 27, 2016 9:42 pm

Re: Bogleheads Uniform Returns -- December 2018

Post by spammagnet » Wed Jan 02, 2019 12:19 am

Trailing portfolio return (time-weighted return, comparable return)
Portfolio return as of 12/31/2018
1 month -2.70%
3 months -5.27%
6 months -2.42%
YTD -2.48%
1 year -2.48%
3 years* 5.00%
5 years* 4.17%
10 years* 9.77%

Several years ago my allocation was 50%-60% stock, as far as I recall. That was pre-Bogleheads, chasing returns, except that DW's 401k had a cheap S&P fund which we stuck with. We invested continuously through the 2008 recession, but nowhere near maxing contributions.

Since we found Bogleheads a couple of years ago we've been 40% stock (32% US/8% ex-US)/60% bonds (total market index funds) as we're nearing the end of accumulation phase.

sandramjet
Posts: 283
Joined: Thu Oct 23, 2014 11:28 pm

Re: Bogleheads Uniform Returns -- December 2018

Post by sandramjet » Wed Jan 02, 2019 1:31 am

I guess I'm confused about what the point of this is? Why do I care what other people's portfolio returns might be? Portfolio's are uniquely personal, IMHO.

Topic Author
longinvest
Posts: 4092
Joined: Sat Aug 11, 2012 8:44 am

Re: Bogleheads Uniform Returns -- December 2018

Post by longinvest » Wed Jan 02, 2019 9:06 am

sandramjet wrote:
Wed Jan 02, 2019 1:31 am
I guess I'm confused about what the point of this is? Why do I care what other people's portfolio returns might be? Portfolio's are uniquely personal, IMHO.
It's a good question. What I know is that some people like to tell others about their returns. This thread series will allow them to provide regular reports about their trailing time-weighted returns in a uniform manner, so that the numbers can be easily understood by others. It might also give them a place to discuss their experience along their investing journey.

For me personally, it's more about the challenge; the challenge of sticking to my asset allocation for the next decade so that I'll be able to report about the 10 year returns of my portfolio after April 30, 2028 without breaking rule 3.
Bogleheads investment philosophy | One-ETF global balanced index portfolio | VPW

Topic Author
longinvest
Posts: 4092
Joined: Sat Aug 11, 2012 8:44 am

Re: Bogleheads Uniform Returns -- December 2018

Post by longinvest » Wed Jan 23, 2019 1:21 pm

The second half of January is a pretty convenient time to update one's personal return spreadsheet while reconciling December account statements.

If others want to join and assume public accountability toward their asset allocation, it's still time. :wink:
Bogleheads investment philosophy | One-ETF global balanced index portfolio | VPW

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