Is your return since Oct 07 high now positive?

[rwwoods]

The market topped out in October of 2007. Since that high, has your portfolio XIRR recovered and now positive? My XIRR is now +0.2% over that period.

[Snowjob]

I'm way up because of my brokerage account, but the methods weren't the typical boglehead methods.

In the 401k/IRA where I generaly didn't tinker as much I think the last few years have been about a wash..

[docneil88]

For reference, as of today, Vanguard's Total [US] Stock Index fund (VTSMX) had a high (adjusted downward for dividends) of $36.03/share on Oct. 9, 2007, vs. a Mar. 16, 2010 share price of $28.88 (source: finance.yahoo.com). That's a decrease of 19.8% over that period.

Vanguard's Total World X-US Stock Index fund (VFWIX) currently has a high (adjusted downward for dividends) of $24.90/share on Oct. 31, 2007, vs. a Mar. 16, 2010 share price of $17.33 (source: finance.yahoo.com). That's a decrease of 30.4% over that period. Best, Neil

[tim1999]

No, I'm still under the peak. Hard to calculate due to new contributions, but I have a taxable account that I have not added to since 2005, which is now about where it was when the Dow was in the 11500-12000 range in 2006.

[matt]

I'm up about 80%. But I had to do everything that a Boglehead isn't supposed to do to get it.

[Snowjob]

I'm up about 80%. But I had to do everything that a Boglehead isn't supposed to do to get it.

Did you mess around with your tax advantaged accounts or was this on the taxable side. I have rule that I don't screw with the tax advantaged accunts just in case I end up being wrong.

[dave.d]

I don't do an exact XIRR and haven't bothered to figure out exactly where I was at the peak. However my total $ return from 12/31/07 through today is +3.7% of my balance on that date. The S&P was -6.2% from its closing high on 10/9/07 to the end of the year, and I was less than 50% stock, so I think it's safe to say my total returns are now positive since the peak.

[matt]

Snowjob wrote:

Did you mess around with your tax advantaged accounts or was this on the taxable side. I have rule that I don't screw with the tax advantaged accunts just in case I end up being wrong.

All I have is tax-advantaged accounts. But I most certainly don't mess around with my money. I am a value investor that focuses foremost on not losing. I take less risk than most investors on this forum. I was a bear in 2007 and half way through 2008, then was a buyer of the cheapest securities I'll ever see in late 2008 and early 2009. My equity exposure has been less than 30% since mid-2007. And I don't use leverage, shorting or anything remotely exotic. According to the Random Walk Theory, I just keep getting lucky rolls, though.

[Sidney]

I'm up about 80%. But I had to do everything that a Boglehead isn't supposed to do to get it.

What is that in absolute dollars?

[Snowjob]

But I most certainly don't mess around with my money.

I suppose I use the word "mess" to loosely.

Any regrets on not going more than 30% equities in this last down turn? I hate to think what would have been If I went farther out on the risk curve in March...

[market timer]

I'm up about 80%. But I had to do everything that a Boglehead isn't supposed to do to get it.

What, include contributions/employer match as part of IRR?

[rcshouldis]

I'm up about 80%. But I had to do everything that a Boglehead isn't supposed to do to get it.

You better give it back then!!! Shame

[cloudeleven]

This stock market recovery has reminded me a lot of the recovery after the 1973-74 50% bear market. The Dow bottomed in December '74, and by March '76 the Dow had almost entirely recovered back to its highs of January '73 before the bear market began.

Yet 1976-82 was still sucky, right?

[fishndoc]

I'm up about 80%. But I had to do everything that a Boglehead isn't supposed to do to get it.

Sometimes you leave Vegas a winner. 8)

But, return enough times and you will go home broke.

[tetractys]

My XIRR since the 10/07 peak is still negative, at -1.06%, which in real terms is about -2.61%. Overall my portfolio has a comfortable real RRI of 1.50%. This recent downturn has been a boon for us steady early accumulators who have been able to outpace the market for a short while. It will take a little more time before the veteran long time investors recover to where they were before the peak. -- Tet

[matt]

Any regrets on not going more than 30% equities in this last down turn?

No regrets. The bulk of my gains have been in corporate bonds. Most of what I was buying one year ago have outperformed stocks.

What, include contributions/employer match as part of IRR?

Nope. I'm good at math and with Excel.

Sometimes you leave Vegas a winner. But, return enough times and you will go home broke.

I don't speculate very much in my portfolio. As a value investor, I can attest firsthand that you can perform much better by taking less risk. Ben Graham taught this 80 years ago, but for whatever reason few people seem to accept it.

For example, I'm up about 7% YTD with a portfolio along these lines:

25% Treasury/default risk free obligations
15% Gold
15% Equities
45% Corporate Bonds/Preferreds

How many here think that they are taking less risk than me?

[jamacq]

I decided to check since you posted the question and was surprised to see almost exactly breakeven. Avg Annual Return from 10/1/07 - today = 0.3%.

<Edit> And if I check from 10/9/07 - today it is -0.49% annualized.

[penumbra]

Up 7.8%, excluding added funds.

[NightOwl]

I'm up about 80%. But I had to do everything that a Boglehead isn't supposed to do to get it.

Just be sure to post when you do all of these things and it doesn't work. Market Timer did.

NightOwl

[Snowjob]

Any regrets on not going more than 30% equities in this last down turn?

No regrets. The bulk of my gains have been in corporate bonds. Most of what I was buying one year ago have outperformed stocks.

25% Treasury/default risk free obligations
15% Gold
15% Equities
45% Corporate Bonds/Preferreds

How many here think that they are taking less risk than me?

You know I was looking into prefereds one weekend back in Nov08. I was going to place some orders on Monday, however when I woke up, the government had released news that Citi would be bailed out again, and there were NO restrictions on prefered dividends. All perfereds rallied hard in the premarket and all week. I had put in some bids before I left work that morning but nothing took. By thursday or friday I think even the Citi prefered was over 16 (18 stands out in my head for some reason) I quickly disposed of all plans to by preferds at that point. To bad I didnt keep them on my radar as they crashed with everything in March.

My best Corp bond purchase was Interpublic Group's debt. Picked up one of the early maturities (2011?) trading somewhere between 50 and 60 cents on the dollar. Company was still profitable and had a lot more cash then debt on the balance sheet. This set of bonds matured ahead of 65% of the rest of their debt so I seemed well covered. Sold in around 93 cents on the dollar in the spring to free up cash, as most of my return was captured.

[acr123]

Quicken says IRR =0.42%. This is from 10/8/07 to 3/16/10.

Does IRR account for money that was removed from portfolio for non-investment reasons such as selling shares in money market prime (non-Keogh/IRA) to purchase something.

Al

[ResNullius]

Reading this puts me in mind of politicians in Washington. Their math is strange, their idea of truth is loose, and the definitions section is all important.

[matt]

Nightowl wrote:

Just be sure to post when you do all of these things and it doesn't work. Market Timer did.

Sorry, I won't be posting any trades. Buy cheap, sell dear is the general idea, not leveraged futures trading with credit card loan money.

I was one of the few who told Market Timer very early on that he was going to lose all his money. That should tell you I have better sense than to lose my own money.

[Ron]

Reading this puts me in mind of politicians in Washington. Their math is strange, their idea of truth is loose, and the definitions section is all important.

Yes, but the illusion of progress (e.g. returns) is all that matters :lol: ..

(Sorry, that's as political as I'll get)...

BTW, I only measure from year-end, but I'm still down -11.23% from 12/31/2007. My wife is down -2.22%. Being that she is more conserative, it shows that she "beat" me (in the short term). In the long term (measuring the last 20 years), I'm ahead :lol: ...

Returns calculated using XIRR function (no, we're not the Beardstown Ladies ).

- Ron

[jh]

...

[Random Musings]

cloudeleven wrote:

Yet 1976-82 was still sucky, right?

No domestic small caps (as defined by Ibbotson), MSCI small and REIT's did very well, even adjusted after inflation. The S&P Barra 500 Value did better than it's growth counterpart.

Real bond returns were not so hot during that time.

As a side note, that period is when Peter Lynch's Magellan fund did "well" - of course it was more of a small-cap fund during that time. Fidelity marketed those returns well into the 90's - damn the style drift. One reason I am not a big fan of Fidelity.

RM

[ddb]

From October 31, 2007 through February 28, 2010, here are the total non-annualized returns for various asset classes:

Code: Select all

Index                             Total Return
BarCap US Aggregate Bond             15.97%
BarCap US TIPS                       13.42%
BarCap US High Yield                 16.28%
MSCI All-Country World              -32.30%
MSCI US Large Cap Growth            -20.63%
MSCI US Large Cap Value             -30.12%
MSCI US Mid Cap Growth              -26.01%
MSCI US Mid Cap Value               -17.01%
MSCI US Small Cap Growth            -20.16%
MSCI US Small Cap Value             -16.96%
MSCI EAFE                           -37.32%
MSCI Emerging Markets               -25.91%

So, if we say bonds returned 15% and stocks returned -30%, in order to have a flat or positive time-weighted return over the period would require a stock allocation of 33% or less (ignoring any potential benefits from rebalancing or tilting to small value). And yes, I realize my data are through February, while the month of March has so far added a few more percent to equity returns.

Right now, 45% of poll respondents claim a positive IRR, which also takes cash flows into account. This suggests to me some combination of the following:

1. The forum, in aggregate, has a very low equity allocation.
2. The forum engaged in several value-added behaviors over this period, including well-timed rebalancing and/or tilting to the higher-performing equity asset classes.
3. The forum generally has very small portfolio sizes relative to new contributions.
4. The poll results are skewed, either due to outright lying or due to a non-representative sample actually responding to the poll.

I'm leaning mostly towards (4), with a sprinkling of (2).

- DDB

[Rodc]

-2.4%

[Random Musings]

Positive primarily due to ddb's 1) and 2). When I look at returns, I ignore my input $.

My willingness of risk also gave me a little bump as I was underweight at the high and bought back at average 855 or so (relative to the S&P). Now, I'm back at my target AA - but I'm getting a little restless and thinking about -5% on the ol' willingness.

RM

[jeffyscott]

So, if we say bonds returned 15% and stocks returned -30%, in order to have a flat or positive time-weighted return over the period would require a stock allocation of 33% or less (ignoring any potential benefits from rebalancing or tilting to small value). And yes, I realize my data are through February, while the month of March has so far added a few more percent to equity returns.

Based on m* chart it appears to me that somewhere around 50/50 rebalanced could be about the break-even point with no new money added, depending on one's portfolio. From 10/1/07, Wellington is down about 3.6%, Balanced index about 4.5% and Wellesley is up about 7%.

However, in a bit of a contrast, Target retirement 2005, currently at 36% stocks is just even. Presumably the target fund has had a declining allocation to stocks over the last 2 years.

I did not answer the poll as I normally calculate my returns only at the end of each quarter. I do know that I am ahead in terms of dollars as one thing I track is total lifetime gains in dollars and that figure was higher at the end of Dec than it was on 9/30/07 or at any other time.

[InvestingMom]

From October 31, 2007 through February 28, 2010, here are the total non-annualized returns for various asset classes:

Code: Select all

Index                             Total Return
BarCap US Aggregate Bond             15.97%
BarCap US TIPS                       13.42%
BarCap US High Yield                 16.28%
MSCI All-Country World              -32.30%
MSCI US Large Cap Growth            -20.63%
MSCI US Large Cap Value             -30.12%
MSCI US Mid Cap Growth              -26.01%
MSCI US Mid Cap Value               -17.01%
MSCI US Small Cap Growth            -20.16%
MSCI US Small Cap Value             -16.96%
MSCI EAFE                           -37.32%
MSCI Emerging Markets               -25.91%

So, if we say bonds returned 15% and stocks returned -30%, in order to have a flat or positive time-weighted return over the period would require a stock allocation of 33% or less (ignoring any potential benefits from rebalancing or tilting to small value). And yes, I realize my data are through February, while the month of March has so far added a few more percent to equity returns.

Right now, 45% of poll respondents claim a positive IRR, which also takes cash flows into account. This suggests to me some combination of the following:

1. The forum, in aggregate, has a very low equity allocation.
2. The forum engaged in several value-added behaviors over this period, including well-timed rebalancing and/or tilting to the higher-performing equity asset classes.
3. The forum generally has very small portfolio sizes relative to new contributions.
4. The poll results are skewed, either due to outright lying or due to a non-representative sample actually responding to the poll.

I'm leaning mostly towards (4), with a sprinkling of (2).

- DDB

I am down about 5%, and my equity share was 60-70%. The other factor impacting returns would be rebalancing. If some were rebalancing often then I could see them in positive territory now?

[Chuck]

I'm up about 80%. But I had to do everything that a Boglehead isn't supposed to do to get it.

You better give it back then!!!

He will.

[Snowjob]

Nightowl wrote:

Just be sure to post when you do all of these things and it doesn't work. Market Timer did.

Sorry, I won't be posting any trades. Buy cheap, sell dear is the general idea, not leveraged futures trading with credit card loan money.

Actually credit card money has been a big win for me. I suppose its what you do with it. I think I'll take my "1.99% for life" capital 1 loan to the grave with me...

[market timer]

1. The forum, in aggregate, has a very low equity allocation.
2. The forum engaged in several value-added behaviors over this period, including well-timed rebalancing and/or tilting to the higher-performing equity asset classes.
3. The forum generally has very small portfolio sizes relative to new contributions.
4. The poll results are skewed, either due to outright lying or due to a non-representative sample actually responding to the poll.

I'm leaning mostly towards (4), with a sprinkling of (2).

- DDB

5. The people who had negative returns, had very negative returns.

[JasonF]

4. The poll results are skewed, either due to outright lying or due to a non-representative sample actually responding to the poll.

I'm leaning mostly towards (4), with a sprinkling of (2).

- DDB

Reminds me of a favorite quote about the '87 Crash:

"Even the liars lost money that day."

[livesoft]

MSMoney (which uses XIRR or something very much like it) shows that I have about a -5% average annualized return from Oct 2007 until today.

I can easily imagine that folks making significant contributions over the two years would be up though.

I can also easily imagine that folks do not use correctly XIRR(), MSMoney, and/or Quicken if at all.

I cannot imagine that folks who have not added new money are up without some fantastic market timing or rebalancing tricks.

[diasurfer]

-4% since October '07

+1% lifetime (wo-hoo! this rally keeps going and I'm going to catch inflation!)

[fishnskiguy]

Since I am either too cheap or insufficiently anal to purchase Excel (I don't do spread sheets so all I'd use it for is XIRR) here is the bottom line:

Port value 1 Nov. 2007= X
No net in flow or out flow for the rest of 2007

2008 net out flow of 4.16% X

Zero net in flow or out flow in 2009 or 2010 to date.

Today's port value: 103.99%of X

Y'all can do the math

Portfolio is 20/80 stock /bond rigorously rebalanced by fairly tight bands.

Chris

[jeffyscott]

Since I am either too cheap or insufficiently anal to purchase Excel (I don't do spread sheets so all I'd use it for is XIRR) here is the bottom line:

Port value 1 Nov. 2007= X
No net in flow or out flow for the rest of 2007

2008 net out flow of 4.16% X

Zero net in flow or out flow in 2009 or 2010 to date.

Today's port value: 103.99%of X

Y'all can do the math

Portfolio is 20/80 stock /bond rigorously rebalanced by fairly tight bands.

Chris

I like your methodology. I do spread sheets but am insufficiently anal, skilled, and/or motivated to track XIRR on a continuous basis. Here is what I have:

Port value 30 Sep. 2007= X

net in flow for the rest of 2007 = 2.55% X

2008 net in flow of 9.65% X

2009 net in flow of 9.88% X

2010 net in flow of 2.4% X

Today's port value: 128% of X

The way I figure it I am ahead (because 128 > 100+2.55+9.65+9.88+2.4), but I don't know what the XIRR thing would say, so as I had indicated I didn't answer the poll.

My allocation has been about 50/50 most of this time. The exception is that I have dropped stocks to about 45% over the last 9 months or so. The 50 in fixed has included a significant portion in risky bond categories (high yield, long term corp, emerging market bond).

(btw you can use google documents to create spread sheets for free, don't know if there is an XIRR function)

[ddb]

Since I am either too cheap or insufficiently anal to purchase Excel...

The spreadsheet programs found in OpenOffice (free desktop application) and Google Documents (free, web-based) each allow you to perform an XIRR calculation. The Google Docs app is particularly attractive for somebody who would otherwise not ever use a spreadsheet program, due to its being web-based. Requires only a Google user name and password.

- DDB

[House Blend]

I like your methodology. I do spread sheets but am insufficiently anal, skilled, and/or motivated to track XIRR on a continuous basis. Here is what I have:

Port value 30 Sep. 2007= X

net in flow for the rest of 2007 = 2.55% X

2008 net in flow of 9.65% X

2009 net in flow of 9.88% X

2010 net in flow of 2.4% X

Today's port value: 128% of X

The way I figure it I am ahead (because 128 > 100+2.55+9.65+9.88+2.4), but I don't know what the XIRR thing would say, so as I had indicated I didn't answer the poll.

Anyone that can add and subtract numbers can determine whether they have a positive or negative XIRR. Take your initial balance. Add your inflows (positive sign). Subtract your outflows. Is it less than your current balance? If so, you've got a positive XIRR. Otherwise, XIRR is negative.

BTW: your numbers lends themselves to quick and dirty approximations to XIRR as outlined in this post: http://www.bogleheads.org/forum/viewtop ... 801#677801

Although your precise XIRR cannot be determined without more information, it is guaranteed to be between 2.83% and 3.52% (not annualized). Taking the geometric mean, I would estimate it to be about 3.17%. The "continuous inflow" approximation discussed in the above post predicts 3.14%.

[jeffyscott]

Anyone that can add and subtract numbers can determine whether they have a positive or negative XIRR. Take your initial balance. Add your net inflows (positive sign). Subtract your outflows. Is it less than your current balance? If so, you've got a positive XIRR. Otherwise, XIRR is negative.

Thanks, I have now voted.

I do calculate returns quarterly. I approximate XIRR using Rick's methodology* which assumes all additions occurred at the mid point of the quarter.

*see appendix I at: http://www.portfoliosolutions.com/research-books-6.html

[conundrum]

We are still slightly negative for the time frame mentioned. We have a 40% equity/60% fixed income allocation with alot of munis.

Drum :lol:

[House Blend]

Thanks, I have now voted.

I do calculate returns quarterly. I approximate XIRR using Rick's methodology* which assumes all additions occurred at the mid point of the quarter.

*see appendix I at: http://www.portfoliosolutions.com/research-books-6.html

Thanks for the link. That appendix is actually about (approximating) a time-weighted return, which is not the same thing as XIRR.

And the quick-and-dirty approximation he is using for quarterly returns is equivalent to assuming half the money was invested up front, and half at the end (not the midpoint). This can also be a good approximation to XIRR--it will agree to high order with the geometric mean that I mentioned above.

[jeffyscott]

Thanks for the link. That appendix is actually about (approximating) a time-weighted return, which is not the same thing as XIRR.

Ah, yes that's right, those are time weighted.

I do also calculate dollar weighted returns...at least approximately. My brute force method is to take the dollars added each quarter and by trial and error determine what steady quarterly rate of return on our actual contributions would result in a balance equal to our actual balance. So for example, from our start in mid 1997 to the end of 2009 we would have the same amount of money if we had earned a steady 1.72% per quarter.

[ensign_lee]

-33% still.

I lost my job in 2009 and so couldn't keep contributing at the bottom. but the rest of my 401(k) surely did take the trip from S&P 1500.

At least I didn't panic sell at S&P 650 like I was tempted to.

[artthomp]

I was down 22% at the low and am presently down 3% from my all time high.

Since I'm retired I started 2008 with a 40% equity/60% fixed income portfolio. The big decline changed my allocation to 30% equity/70% fixed income. Since I will be taking my first Required Minimum Distribution this year I have decided to keep the 30% equity/70% fixed income portfolio allocations.

[Boglenaut]

I purposefully don't keep track so did not vote.

[manuvns]

in +ve zone mostly due to heavy accumulation on last one year .

[trico]

I am up about 8% as I sold before the crash and went to bonds. My market timing was excellent due to, (when I saw loan companies willing to loan $700,000.00 for purchase of a house with a text message only. No finger prints needed. we will just email you the money.