2008/2009 Personal Returns (thru the Great Recession)

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What was your portfolio return (IRR) over the 2008/2009 calendar years?

IRR ≤ - 17.5%
4
5%
IRR ≤ - 17.5%
4
5%
- 17.5% < IRR ≤ - 15.0%
0
No votes
- 15.0% < IRR ≤ - 12.5%
3
4%
- 15.0% < IRR ≤ - 12.5%
3
4%
- 10.0% < IRR ≤ - 7.5%
3
4%
- 7.5% < IRR ≤ - 5.0%
4
5%
- 5.0% < IRR ≤ - 2.5%
7
9%
- 2.5% < IRR ≤ 0.0%
11
14%
0% < IRR ≤ + 2.5%
11
14%
+ 2.5% < IRR ≤ + 5.0%
6
8%
+ 2.5% < IRR ≤ + 5.0%
6
8%
+ 5.0% < IRR ≤ + 7.5%
4
5%
+ 7.5% < IRR ≤ + 10.0%
2
3%
+ 10.0% < IRR ≤ + 12.5%
4
5%
+ 12.5% < IRR ≤ + 15.0%
1
1%
+15.0% < IRR
5
6%
 
Total votes: 78

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iceport
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2008/2009 Personal Returns (thru the Great Recession)

Post by iceport » Sun Jan 03, 2010 2:26 pm

The "2009 annual returns thread"prompted curiosity about how each investor's returns might look across the time period that included both the precipitous market decline in 2008 and the dramatic rebound from March 2009 to the end of that year. Some people posted huge gains in 2009, but were there correspondingly huge losses in 2008 that negated the subsequent gains?

The 2008/2009 two-calendar-year period includes, predominently, the worst global stock market crash in 80 years and a significant recovery. From January 1, 2008 to March 9, 2009 the S&P 500 index (not index fund -- no dividends) had lost over half its value. Though it remains 24% lower than it was at the start of 2008, the index has rebounded with a gain of 67% from it's March 2009 low.

So how did your portfolio do from January 1, 2008 to December 31, 2009?

As with the 2009 return thread, please report a dollar-weighted return. This accounts for the amounts and timing of contributions and withdrawals. (See Gummy's pages: Fund Gains and YOUR Gain and XIRR stuff. Also from the dailyVest: Personal Rate of Return/Investment Performance Calculation Methodologies & Assumptions ) (Hope I guessed reasonable intervals! Would expect a much narrower distribution?)

My numbers are as follows, with a 70/30 equity/fixed income allocation, and very evenly distributed contributions, no withdrawals:

2008: ▬ 28.00%
2009: + 25.76%

2008-2009: ▬ 3.45%

How did you fare?

Thanks!

--Pete

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grayfox
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Post by grayfox » Sun Jan 03, 2010 2:48 pm

2008/2009 -1.62% annualized

In case anyone is wondering, here is high I calculated 2008/2009 annualized return from 2008 and 2009 returns:

Year Return Gain Factor
2008 -14.5% 0.8585
2009 12.73 1.1273

Gain Factor for 2008/2009 = 0.8585 * 1.1273 = 0.96778
Annualized Return for 2008/2009 = 1 - SQRT(0.96778) = 1 - .98376 = -0.0162383

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arthurdawg
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Post by arthurdawg » Sun Jan 03, 2010 2:56 pm

That would require me to go back and actually cal-ku-late sum thing-a-majiggay doo-higgy. Overall the portfolio is up due to new contributions, I'm happy with my allocation, and I'm not too worried about IRR for now.
TSM / SCV / FTSE Big World / FTSE Small World / REIT / TBM / Int Term Tax Exempt

ruud
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Post by ruud » Sun Jan 03, 2010 3:02 pm

my xirr over the 2008-2009 period was slightly positive (2.45%)

--ruud
"A good plan, violently executed now, is better than a perfect plan next week."

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paulob
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Post by paulob » Sun Jan 03, 2010 3:11 pm

Two year return via XIRR:

24.31%
Paul

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White Coat Investor
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Post by White Coat Investor » Sun Jan 03, 2010 3:13 pm

paulob wrote:Two year return via XIRR:

24.31%
Very impressive. Some successful market timing involved I presume?
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

Snowjob
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Post by Snowjob » Sun Jan 03, 2010 3:32 pm

Margin boosted mine, though I wish I waited later than October to start my buying spree.

when you exclude contributions

-40% in 2008
+150% in 2009

Including contributions is better of couse.

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paulob
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Post by paulob » Sun Jan 03, 2010 3:33 pm

EmergDoc wrote:
paulob wrote:Two year return via XIRR:

24.31%
Very impressive. Some successful market timing involved I presume?
Yes, but I don't move between cash and stocks. I will, however, use inverse funds as a market timing strategy (but no buys in '09). That helped minimize the damage in '08, return was negative 2.7%. In hindsight, I fought the market (trend) and paid a price for it. The market was too volatile during this time period to employ anything but a very short holding period for a momemtum strategy.

Market timing employed is trend following. It is not based on any one indicator such as moving averages. But it does include this and other "vodoo" stuff.

I also started a portfolio of "shadow stocks" a year ago. Basically it's AAii's version of managing your own microcap portfolio. There is no market timing involved, it is strictly a value and size based strategy. But your buying stocks vs ETF's or funds, so there is more time involved than buy and hold, but less committment than the trend following strategy. But it did beat out Bridgeway (did you decide to stay with them?) handsomely.

I also use leveraged funds for most of the trend following.
Last edited by paulob on Sun Jan 03, 2010 3:35 pm, edited 1 time in total.
Paul

neverknow
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Post by neverknow » Sun Jan 03, 2010 3:34 pm

..
Last edited by neverknow on Mon Jan 17, 2011 8:00 am, edited 1 time in total.

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jjkthunder
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Post by jjkthunder » Sun Jan 03, 2010 3:43 pm

BMV was my 2008 start -$20K for living expenses.
EMV was my 2009 ending +$30K for living expenses.

(EMV+$30K) - (BMV-$20K) / (BMV-$20K) = -2.49%

This was a 41/59 AA in 2008 to a 36/64 AA in 2009.

I see very little rebalancing this year at end of January 2010.
GLI...................Jack | | You can call me anything you want but please don't call me NORMAL

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Sally
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Post by Sally » Sun Jan 03, 2010 4:06 pm

At the end of each year, I total net worth (excluding personal property) so my numbers include all investments including real property (approx. net value @taxes).

Results:
down 6.6% from Jan 2007 to Dec 2009
up 10.2% from Jan 2008 to Dec 2009

Obviously, I wish it was better than being overall down (especially since I am retired already), but it is not bad considering what has occurred to the value of my remaining real estate investments as well as liquid investments. Guess I have to be thankful that it isn't any worse!

Didn't want to skew your poll since I include other than stocks/bonds/funds in my total reviews so didn't vote above.

Sally

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jeffyscott
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Post by jeffyscott » Sun Jan 03, 2010 4:17 pm

I have not been able to figure out how to use that function in excel. But using my brute force trial and error method, if I apply a steady 0.21% per quarter rate of return to quarterly cash flows, the result matches my actual ending balance. So I think that means I earned 0.84% annualized or a cumulative +1.7% for the two year period.

Since all I track are the quarterly figures, I have assumed all contributions were made at the mid point of the quarter. This should be pretty close to reality.

Normalizing everything, as if I started with a $10,000 balance...
I had $10,000 on 12/31/07 added $1934 in fairly even increments over the two years and ended with $12,119 on 12/31/09.
press on, regardless - John C. Bogle

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Regal 56
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Post by Regal 56 » Sun Jan 03, 2010 4:52 pm

Return from the beginning of 2008 to the end of 2009: +5.5%. Very surprising to me, but it's probably because I have a small portfolio and kept buying through the worst of 2008-2009. In fact, I maxed out 2009 before the end of April, so all my contributions for that year caught the market upswing. If I learned anything from 2008-2009, it's the wisdom of buying during a crash. I'll remember that during future crashes, which, if Wall Street stays true to form, should happen many more times over my investing horizon.

ResNullius
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Post by ResNullius » Sun Jan 03, 2010 4:56 pm

I made some money, lost some money, then made some back. Where I stand is down a little bit (excluding any new contributions).

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grabiner
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Post by grabiner » Sun Jan 03, 2010 5:09 pm

2008 loss: 39%
2009 gain: 34%

XIRR: -9%

I know that I have one of the most aggressive portfolios, so I'm not surprised that I have one of the lowest XIRRs over a market decline, and probably also among the lowest returns in 2008 and the highest in 2009.
Wiki David Grabiner

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Padlin
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Post by Padlin » Sun Jan 03, 2010 5:14 pm

12/31/08-12/31/2009
International 22.7
US 20.8

12/31/07-12/31/2009
International -29.3
US -4.4

This is for actual returns, not final balances which would incorrectly include new $.
Regards | Bob

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Ariel
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Post by Ariel » Sun Jan 03, 2010 7:42 pm

+3.6% in 2008, and +10.7% in 2009, so that's about 14.7% across the two years combined. (These percentages are returns on investments.)

I avoided all of the drop in 2008 by staying almost entirely out of stocks except for some trades and such, but then I also missed most of the big recovery with my conservative allocation.

I aim for 6% per year, so I'm very happy. 8) :D
Do what you will, the capital is at hazard ... - Justice Samuel Putnam (1830), as quoted by John Bogle (1994)

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iceport
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Not bad!

Post by iceport » Sun Jan 03, 2010 9:24 pm

Wow, looks like I misjudged the mean. It's actually positive? It's surprising to see such high annualized returns over this particular 2-year period. :sharebeer
Padlin wrote:This is for actual returns, not final balances which would incorrectly include new $.

Hi Bob,

an internal rate of return actually properly accounts for the timing of the addition of new cash and withdrawals. (For example, dollars added on the last day of the period don't really count for anything in computing the IRR.) It measures your real life portfolio performance over the entire time period. It's no good for comparing your portfolio against a benchmark, but it is useful to see the results your portfolio -- and any trades you made, including rebalancing -- actually produced for you.

--Pete

Elysium
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Post by Elysium » Sun Jan 03, 2010 9:31 pm

-7.24% over 2 years

-38.56% in 2008
+40.05 in 2009

I have one of the very aggressive portfolios around here and it required nerves of steel to get through from Nov '07 to Mar '09. When all hell broke loose in Feb '09 I said to myself in that no matter what ever happens I will stick with this, and I did.

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camper
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Post by camper » Sun Jan 03, 2010 10:05 pm

Well it took awhile. I have never used spreadsheets to track my investments.
So I had to learn how to do it and input all the data.

XIRR 2008 -33.27%
XIRR 2009 37.81%
XIRR for 2008 and 2009 6.35%

rokid
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Post by rokid » Sun Jan 03, 2010 10:34 pm

2008 IRR: -29.97%
2009 IRR: +29.00%

2008-2009 IRR: -2.45%

----Jim

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tetractys
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Post by tetractys » Sun Jan 03, 2010 10:49 pm

OK, what the heck. Since the data was already set up, all it took was inserting the XIRR formula into an empty cell.

And the answer is -2.02% -- Tet
RESISTANCE IS FRUITFUL

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Boglenaut
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Post by Boglenaut » Sun Jan 03, 2010 10:58 pm

I don't keep track of IRR on purpose. I realized a long time ago the markets don't care how I did. It helps reduce emotion to not know it. I can still see how any fund behaves, and keep tax info for returns and cost basis decisions. But a personal IRR makes no sense. I wish you had that option in the poll. :D

kd2008
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Post by kd2008 » Mon Jan 04, 2010 12:02 pm

2008 IRR: -50.5%
2009 IRR: +37.80%

2008-2009 IRR: 5.5%

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grayfox
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Post by grayfox » Mon Jan 04, 2010 12:20 pm

I must be missing something. How can you can have -50.5% the first year and +37.8% the next year and end up with +5.5% for both years?

Start with $100, after the first year you would have $49.50 and after the second year you would have $68.21

That would be the same as having a return of -17.41% both years which is all that annualized return means.

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Ariel
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Post by Ariel » Mon Jan 04, 2010 12:29 pm

grayfox wrote:I must be missing something. How can you can have -50.5% the first year and +37.8% the next year and end up with +5.5% for both years?

Start with $100, after the first year you would have $49.50 and after the second year you would have $68.21

That would be the same as having a return of -17.41% both years which is all that annualized return means.
Hi Grayfox -- I was wondering the same thing at first. However, with the XIRR function, it could happen for a young investor who had little at risk in most of 2008 and was making new investments throughout 2009.
Do what you will, the capital is at hazard ... - Justice Samuel Putnam (1830), as quoted by John Bogle (1994)

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ddb
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Post by ddb » Mon Jan 04, 2010 12:50 pm

FWIW, I don't agree that dollar-weighted return is the appropriate calculation methodology for this type of poll. To use an extreme example, let's say Person A and Person B have identical assets, savings levels, and investment policy statements. The only difference is that Person A inherited a very large lump sum of money in October 2007, and Person B inherited the same lump sum in March 2009. Even though their time-weighted returns are the same (because they have identical situations and investment policies), they will have drastically different dollar-weighted returns.

If I want to compare my returns to other investors' returns, I only care about their TWR, because TWR reflects the common items that we can all control (namely, investment policy).

- DDB
"We have to encourage a return to traditional moral values. Most importantly, we have to promote general social concern, and less materialism in young people." - PB

snowman9000
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Post by snowman9000 » Mon Jan 04, 2010 1:58 pm

2008: -15.74%
2009: +16.84
2 years: -0.42

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jeffyscott
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Post by jeffyscott » Mon Jan 04, 2010 2:54 pm

ddb wrote:FWIW, I don't agree that dollar-weighted return is the appropriate calculation methodology for this type of poll.

If I want to compare my returns to other investors' returns, I only care about their TWR, because TWR reflects the common items that we can all control (namely, investment policy).
I think it depends on the purpose of the poll. Instead of comparison, the purpose of this poll may be to get a feel for what a semi-random group of investors actually experienced over this 2 year period. If that is the purpose, then I think the IRR would be of interest.
press on, regardless - John C. Bogle

yakers
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Post by yakers » Mon Jan 04, 2010 5:39 pm

2008 -18.8%
2009 +18%

So still down a bit.

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iceport
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TWR vs. IRR

Post by iceport » Mon Jan 04, 2010 8:31 pm

ddb wrote:FWIW, I don't agree that dollar-weighted return is the appropriate calculation methodology for this type of poll. To use an extreme example, let's say Person A and Person B have identical assets, savings levels, and investment policy statements. The only difference is that Person A inherited a very large lump sum of money in October 2007, and Person B inherited the same lump sum in March 2009. Even though their time-weighted returns are the same (because they have identical situations and investment policies), they will have drastically different dollar-weighted returns.

If I want to compare my returns to other investors' returns, I only care about their TWR, because TWR reflects the common items that we can all control (namely, investment policy).

- DDB
Hi DDB,

I was thinking about this differently. (Also, your example is probably rare.) This 2-year period was nothing if not dramatic and alarming. There were plenty of opportunities and temptations for individual investors to significantly affect their actual returns during the crash and subsequent rebound, beyond simply controlling their portfolio design. Did you rebalance? When? And how, all at once, or solely through targeted withdrawals or new contributions? Did you revise your equity/fixed income allocation, and if so, when (and in which direction!)? Are you still accumulating, or in the withdrawal stage? Stay-the-course, or capitulate? With such extreme market movements -- in both directions -- investor behavior had the potential to alter net real-world investor returns in a profound way. The time-weighted return, so I thought, would measure portfolio returns more accurately, while the dollar-weighted returns would more accurately measure the actual results of each investor's real-world behavior -- just as fund performance is usually different than investor performance, due to the timing of the buying and selling. I was just curious about how we all personally came through this mess. Some people might have been luckier than others in the timing of their activities, but based on the poll results, unless you made a huge move in the wrong direction or at the worst possible time, you probably did just fine. (Though some people do seem to have been really, really lucky!)

Part of the motivation was also to maybe take a little bit of solace in the fact that, despite a brutal global stock market meltdown, less than nine months after the low point most Bogleheads' retirement accounts seem to have made it through relatively intact, without life-changing losses. Annualized losses of 5%, or even 10% for the more aggressive allocations, seem mild compared to the situation we found ourselves in a mere 9 months ago.

The risk is that we might once again get complacent or feel like we've returned to "normal" market conditions already. That's not the intent. I doubt that we're out of the woods yet. We never really are, as long as we're invested in equities.

--Pete

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Sheepdog
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Post by Sheepdog » Mon Jan 04, 2010 8:48 pm

My total return is easy to find out with my Microsoft Money software. I only have to plug in the dates. My total return in the 2 year period was +0.84%. 3 years my return was +2.61%
Jim
Last edited by Sheepdog on Mon Jan 04, 2010 9:42 pm, edited 1 time in total.
It's not what you gather, but what you scatter which tells what kind of life you have lived---Helen Walton

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grayfox
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Post by grayfox » Mon Jan 04, 2010 9:15 pm

Check out this thread.

http://www.bogleheads.org/forum/viewtop ... 374#632374

Over 2008/2009 most of the Bogelheads are way ahead of all the Lazy Portfolio from the experts.

Amateur Investors Rule! :sharebeer :thumbsup

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