How Do You Like My New 'Doo

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
NibbanaBanana
Posts: 194
Joined: Sun Jan 22, 2017 10:34 pm

Re: How Do You Like My New 'Doo

Post by NibbanaBanana » Mon Jun 05, 2017 1:16 pm

Nice work nedsaid. I have 48 individual issues in my portfolio. Some I've held for over 20 years. They make up about 15-20% of our investments. As I've held a lot of them for some time in DRIP plans, it's impossible to know exactly how well they've done. That's one thing I don't like about individuals. For the shorter time period that I've held everything in my VG brokerage account, I'm just about like you, in line with the market. I was buying primarily for dividends though.

Many of them are dividend aristocrats. I'm taking Buffets advice and shooting for a life long holding period. Hopefully one of increasing dividends.
I got some pretty good deals just a year or so ago when there was that big bear market for energy related industrials.

User avatar
nedsaid
Posts: 8831
Joined: Fri Nov 23, 2012 12:33 pm

Re: How Do You Like My New 'Doo

Post by nedsaid » Tue Jun 06, 2017 9:40 am

NibbanaBanana wrote:Nice work nedsaid. I have 48 individual issues in my portfolio. Some I've held for over 20 years. They make up about 15-20% of our investments. As I've held a lot of them for some time in DRIP plans, it's impossible to know exactly how well they've done. That's one thing I don't like about individuals. For the shorter time period that I've held everything in my VG brokerage account, I'm just about like you, in line with the market. I was buying primarily for dividends though.

Many of them are dividend aristocrats. I'm taking Buffets advice and shooting for a life long holding period. Hopefully one of increasing dividends.
I got some pretty good deals just a year or so ago when there was that big bear market for energy related industrials.
I am glad that I have kept records with Quicken and a tabbed Excel spreadsheet since 1995. It has been fun to calculate my returns and post them. What I found is that Quicken actually does a good job of calculating Compound Annual Growth Rate. I also found that I am a competent investor but my returns are not spectacular. Whatever success I have had has been from buying good stuff and keeping it.

Owning 48 stocks is quite a commitment to individual stocks. It seems like the stock brokers who do their own research will base their recommendations from a universe of 30 stocks they are following at any given time. That seems like a good guideline for an individual, 30 stocks at the max. My recommendation for people wanting to do individual stocks is 15-25 stocks. But if what you are doing is working, keep doing it!

And yes, a primary motivation for me is the dividends. I desire an income stream that grows a bit faster than inflation.
A fool and his money are good for business.

User avatar
nedsaid
Posts: 8831
Joined: Fri Nov 23, 2012 12:33 pm

Re: How Do You Like My New 'Doo

Post by nedsaid » Sat Jun 24, 2017 1:29 pm

1. US Total Stock Market Index 12.84%
2. Diversified Bond Fund 6.12%
3. Vanguard US Total Bond Market Index 5.71% In Fund and in ETF form.
4. Cash Balance Retirement Pension 4.52% (Frozen after 2009).
5. TIPS Fund 3.36%
6. GNMA Fund 3.05%
7. Vanguard Small Value Index ETF 2.93%
8. Fidelity Freedom 2025 Fund Class K 2.79% (In lieu of Cash Balance Pension contributions)
9. International Growth Fund 2.70%
10. International Index Fund 2.47%

Top 10 Holdings 46.49%
11. S&P Small Cap 600 ETF 2.43%
12. Foreign Value Fund 2.12%
13. Weyerhauser 2.05%
14. World Allocation Fund 1.81%
15. Mid-Cap Growth Fund 1.72%


Top 15 Holdings 56.62%

Individual Stocks 12.55% 18 stocks.


Top 10 Individual Stocks
1. Weyerhauser
2. Walt Disney Company
3. Johnson & Johnson
4. Exxon/Mobil Corporation
5. Boeing Company
6. Microsoft Corporation
7. JP Morgan & Chase Co.
8. US Bancorp
9. Pfizer
10. Applied Materials Inc.

Stock Stylebox
26 22 17
05 07 06
07 06 05

US Stocks 49%
Foreign Stocks 18%
Bonds 30%
Cash 3%
Other 1%

67% Stocks, 33% Bonds and Cash, 1% Other.

Average mutual fund expense ratio: 0.48%

Pretty much, I have continued mild rebalancing from US Stocks to US Bonds and even milder rebalancing from US Stocks to International Stocks. I sold half of my remaining stake in Applied Materials and part of it went to buy shares of Ford and the other part purchased additional shares of an International Small Cap ETF.

You can see that my portfolio hasn't changed much though the order of certain investments has changed.
A fool and his money are good for business.

User avatar
nedsaid
Posts: 8831
Joined: Fri Nov 23, 2012 12:33 pm

Re: How Do You Like My New 'Doo

Post by nedsaid » Sat Jun 24, 2017 1:40 pm

I am reposting from a thread where Factor investing was discussed and I posted about my factor tilts and how those tilts have actually performed. This data is as of June 7, 2017. Here I am tracking how my value-oriented individual stock portfolio actually performed. I didn't realize until recently that Quicken could calculate this for me. I did some slight editing. See below.

I have maintained a portfolio of individual stocks for my retirement portfolio. It is primarily a large value portfolio but it certainly is not deep value. Let's benchmark it against the S&P 500, American Century Value, Loomis Sayles Value Y and Vanguard Value Index. These are all as of 6/7/2017. Source for the mutual fund returns is Morningstar and the source for my returns is a report generated by Quicken. I own American Century Value which until recently has been pretty much tracking the Vanguard Value Index. I have owned the Loomis Sayles Value fund for probably seven or eight years.

Nedsaid Individual Stocks
One Year 22.39%
Three Year 11.21%
Five Year 17.80%
Ten Year 6.60%
Fifteen Year 7.65%

American Century Value Investor
One Year 10.51%
Three Year 6.61%
Five Year 13.71%
Ten Year 5.76%
Fifteen Year 7.65%

Loomis Sayles Value Y
One Year 13.06%
Three Year 5.66%
Five Year 14.06%
Ten Year 5.70%
Fifteen Year 8.26%

Vanguard Value Index Admiral
One Year 15.46%
Three Year 8.59%
Five Year 15.11%
Ten Year 5.80%
Fifteen Year 8.02%

S&P 500
One Year 17.66%
Three Year 9.96%
Five Year 15.54%
Ten Year 7.31%
Fifteen Year 8.10%

So what does this say. Well, clearly Nedsaid is not an idiot. I matched American Century Value over 15 years but trailed the S&P 500 by 45 basis points or 0.45%. Not bad. American Century Value probably has a better value loading than me, my guess is that my stocks are growthier than American Century Value. The thing is, I could not beat the S&P 500 or even the Vanguard Value Index. My suspicion is also that Vanguard Value Index loads less on value than American Century Value. Since Growth has been outperforming Value since the 2008-2009 financial crisis, these results should not be surprising. Over 15 years, I have not been that great of a Value investor whether or not I invested through individual stocks or through favorite mutual funds.
A fool and his money are good for business.

Avo
Posts: 1097
Joined: Wed Jun 11, 2008 2:21 am
Location: California

Re: How Do You Like My New 'Doo

Post by Avo » Sat Jun 24, 2017 2:00 pm

For comparison, according to M*, VTSMX (total market) went up by a factor of 3.386830 from 6/7/2002 to 6/7/2017 (15 years), including reinvestment of distributions, which annualized is 8.47%.

User avatar
nedsaid
Posts: 8831
Joined: Fri Nov 23, 2012 12:33 pm

Re: How Do You Like My New 'Doo

Post by nedsaid » Sat Jun 24, 2017 2:15 pm

So how have I done overall? I have calculated my returns using a couple of benchmarks. My portfolio since the early 2000's has been roughly 70/30. Before the 2008-2009 crash, I got up to 72/28. The bear market took me down to probably about 60/40 and it crept up again to 69/31. I did not rebalance from bonds to stocks in 2009 when I "should have" but I did put 100% of my new monies for investment into stocks for about a year. I was too scared to do anything more than that. I started a program of mild rebalancing in July of 2013 and am still in this program. My stocks have been whittled down to 67%, so now I am 67/33. The International portion of my stocks has fluctuated between 24% and 27%.

One benchmark that I use is the Vanguard LifeStrategy Moderate Growth fund. As of 5/4/2017, here is how I did against moderate growth: Ten Year Moderate Growth 4.72% vs. Nedsaid 5.06%; Five Year Moderate Growth 7.69% vs. Nedsaid 8.52%; and Three Year Moderate Growth 5.55% vs. 5.90% for Nedsaid. That I beat Moderate Growth shouldn't be surprising as most of the time I was in the neighborhood of 67% stocks and Moderate Growth has 60% stocks. Moderate Growth went from 20% of Stocks in International to 40% recently. My higher allocation to stocks in general and a lesser allocation to International helped my performance. Moderate Growth was more conscientious about rebalancing than I was.

If I compare my results to a Three Fund portfolio of a Taylor Larimore 3 fund portfolio held steady at 50% US Total Stock Market Index, 17% Total International Index, and 33% Total Bond Market Index; Vanguard wins. I calculated the Vanguard returns using Portfolio Visualizer. As of December 31st, 2016, here are my returns: Ten Year Vanguard 5.76% vs. Nedsaid 4.93%; Five Year Vanguard 9.08% vs. Nedsaid 8.88%; and Three Year Vanguard Vanguard 4.95% vs. Nedsaid 4.87%. This is Vanguard rebalancing yearly.

If Vanguard rebalanced monthly, would be Vanguard 5.53% vs. Nedsaid 4.93% over 10 years. If Vanguard had never rebalanced, the 10 year return would be 5.40%.

This is what is interesting. Rebalancing seems to have improved returns for Vanguard. Rebalancing once a year resulted in a 5.76% return over 10 years, rebalancing monthly the 10 year return was 5.53%, and never rebalancing was 5.40% over 10 years. My 10 year return was 4.93%, had I rebalanced from bonds to stocks during the trough of the 2008-2009 bear market, the Vanguard results suggest that I could have added maybe another 35 or so basis points to my return. Sometimes there really is a rebalancing bonus.

So I underperformed the Vanguard 67/33 portfolio rebalanced yearly by 83 basis points or 0.83% a year. Probably 0.35% or 35 basis points is from not rebalancing from bonds to stocks when I should have and probably another 0.35% or so from fee drag. Yet another factor is that factor investing, particularly small/value tilts that worked well from 2000-August 2008, didn't work so well after the 2008-2009 financial crisis.
Last edited by nedsaid on Sun Nov 19, 2017 10:58 am, edited 1 time in total.
A fool and his money are good for business.

User avatar
nedsaid
Posts: 8831
Joined: Fri Nov 23, 2012 12:33 pm

Re: How Do You Like My New 'Doo

Post by nedsaid » Sat Jun 24, 2017 2:26 pm

Avo wrote:For comparison, according to M*, VTSMX (total market) went up by a factor of 3.386830 from 6/7/2002 to 6/7/2017 (15 years), including reinvestment of distributions, which annualized is 8.47%.
Thank you for that. That gives me another basis for comparison. Clearly the individual stock project of mine trailed the indexes, whether the benchmark was the S&P 500 or the US Total Stock Market Index.

Why did I continue with my individual stocks? I eyeballed my results and I suspected that my returns about matched the markets. The brokerage account IRA also has a few load funds in there as well as my ETFs. I could monitor in Quicken my 1, 3, and 5 year returns for the account but I didn't know how to calculate the returns for the individual stocks as a group. It seemed that the brokerage IRA was doing well enough and I didn't see the reason to change. Recently, I found that Quicken could do more for me than I thought and I found that I could track the returns of my individual stock portfolio.

So pretty much, I did 7.65% over 15 years compared to 8.47% for the US Total Market and 8.10% for the S&P 500.

I post this so that people can see what a real life person did with a real life stock portfolio with my own hard-earned money. I was conscientious trying to buy my stocks with reasonable quality at a reasonable price and not trading very much. Good habits but I still trailed the benchmarks. Hardly a disaster. Again, this portfolio was value oriented and Value has mostly been out of favor since the 2008-2009 financial crisis except for 2016. But even at that, I trailed the Vanguard Value Index.

What I will do is keep monitoring my performance and see how it goes.
A fool and his money are good for business.

Avo
Posts: 1097
Joined: Wed Jun 11, 2008 2:21 am
Location: California

Re: How Do You Like My New 'Doo

Post by Avo » Sun Jun 25, 2017 4:35 pm

Thank you for going through the time and effort to accurately track your performance in picking individual stocks.

When I read your opening post about one of your stocks going up 50% in a day, I felt jealous. Then I remembered that when I tried to pick individual stocks, I had one go down 50% in a day. And it never went back up. And I had no big winners.

I was (and no doubt still am) terrible at picking individual stocks. I gave it up. It was a very expensive hobby.

User avatar
nedsaid
Posts: 8831
Joined: Fri Nov 23, 2012 12:33 pm

Re: How Do You Like My New 'Doo

Post by nedsaid » Sat Jul 29, 2017 8:18 pm

1. US Total Stock Market Index 12.60%
2. Diversified Bond Fund 6.12%
3. Vanguard US Total Bond Market Index 5.84% In Fund and in ETF form.
4. Cash Balance Retirement Pension 4.46% (Frozen after 2009).
5. TIPS Fund 3.39%
6. GNMA Fund 3.00%
7. Vanguard Small Value Index ETF 2.93%
8. Fidelity Freedom 2025 Fund Class K 2.79% (In lieu of Cash Balance Pension contributions)
9. International Growth Fund 2.76%
10. International Index Fund 2.49%

Top 10 Holdings 46.38%
11. S&P Small Cap 600 ETF 2.42%
12. Foreign Value Fund 2.15%
13. Weyerhauser 1.95%
14. World Allocation Fund 1.81%
15. Large-Cap Value Fund 1.70%


Top 15 Holdings 56.41%

Individual Stocks 12.62% 18 stocks.


Top 10 Individual Stocks
1. Weyerhauser
2. Walt Disney Company
3. Johnson & Johnson
4. Boeing Company
5. Exxon/Mobil Corporation
6. Microsoft Corporation
7. JP Morgan & Chase Co.
8. US Bancorp
9. Pfizer
10. Applied Materials Inc.

Stock Stylebox
26 23 17
05 07 06
07 06 04

US Stocks 48%
Foreign Stocks 19%
Bonds 31%
Cash 2%
Other 1%

67% Stocks, 33% Bonds and Cash, 1% Other.

Average mutual fund expense ratio: 0.48%

I did another round of mild rebalancing from US Stocks to US Bonds this week. I had a little cash in my brokerage IRA account and bought a few shares of AIG, one of my four horsemen of underperformance. Another item I noticed is that Boeing had a big week and it switched places with Exxon-Mobil in my top 10 individual stocks list.
A fool and his money are good for business.

User avatar
iceport
Posts: 3333
Joined: Sat Apr 07, 2007 4:29 pm

Re: How Do You Like My New 'Doo

Post by iceport » Sat Jul 29, 2017 9:33 pm

nedsaid wrote:Average mutual fund expense ratio: 0.48%
Oof. That's not bad, but it could be better, nedsaid. Does that include the zeros for the individual stocks? Are the workplace plans bumping up the costs? Otherwise, if you went all passive with your funds you could likely get expenses down to single digit basis points.
"Discipline matters more than allocation.” ─William Bernstein

User avatar
nedsaid
Posts: 8831
Joined: Fri Nov 23, 2012 12:33 pm

Re: How Do You Like My New 'Doo

Post by nedsaid » Sat Jul 29, 2017 9:50 pm

iceport wrote:
nedsaid wrote:Average mutual fund expense ratio: 0.48%
Oof. That's not bad, but it could be better, nedsaid. Does that include the zeros for the individual stocks? Are the workplace plans bumping up the costs? Otherwise, if you went all passive with your funds you could likely get expenses down to single digit basis points.
No the expense ratio does not include the individual stocks. My actual costs are probably 0.45% as there are embedded costs in a small variable annuity that I own and I have a bit of trading costs in my brokerage account. I have worked these costs down over the years, twelve years ago the expenses were more like 0.78%.

I certainly am not all passive. I do own active mutual funds too. Most of these are either Value or Earnings/Price momentum funds.
A fool and his money are good for business.

User avatar
nedsaid
Posts: 8831
Joined: Fri Nov 23, 2012 12:33 pm

Re: How Do You Like My New 'Doo

Post by nedsaid » Sun Sep 10, 2017 10:16 pm

An update. I had some cash in my brokerage IRA account, I exercised a warrant to purchase a share of AIG stock and I bought a few more shares. Morningstar has AIG as a four star and I got tired of owning just three shares, now I am up to 12 shares and might buy more at some point.

Of course, AIG suffered a lot during the 2008-2009 financial crisis, most of the stock became property of Uncle Sam. So my 75 shares dropped to 3 shares and a warrant.

Not high finance obviously, but a whole lot better than doing the stupid things men do when trying to recapture lost youth. A lot cheaper than a sports car or a wild fling. Obviously 12 shares of AIG is a very small fraction of my retirement portfolio.

AIG is one of the "Four Horsemen of Underperformance" which are AIG, GE, Microsoft, and Pfizer. Microsoft has done well enough the last three years that I should replace it with Comtech Communications. I have noticed that Comtech has been doing better recently. As I have said, I am very patient with my investments, so much so that I even hate to rebalance.
A fool and his money are good for business.

User avatar
nedsaid
Posts: 8831
Joined: Fri Nov 23, 2012 12:33 pm

Re: How Do You Like My New 'Doo

Post by nedsaid » Fri Sep 22, 2017 11:44 pm

Okay, here is the performance record of my individual stocks held in retirement accounts.

15 years 10.28%
10 years 6.95%
5 years 16.91%
3 years 13.58%
1 year 27.12%

Below is my performance record for Vanguard US Total Stock Market Index Investor Class.

15 years 10.11%
10 years 7.48%
5 years 13.51%
3 years 9.41%
1 year 17.74%

These figures are as of 9/22/2017. Last time I checked, I beat the market over 1, 3, and 5 years. Now I beat the market over 15 years but still trail over 10 years. So this looks much better than last time. My performance figures come from Quicken for my own individual stocks. The return figures for US Total Stock Market Index comes from Morningstar.

Whew. That a relief. This is looking much, much better. Beat the market over 15 years. Woo hoo!!

Edit: American Century Value, I fund I have admired and owned for many years has a 15 year performance record of 9.01%. Vanguard Value Index returned 9.82% over the same time period. My stocks did 10.28%. So I beat my favorite Value fund and the Value Index too. Not bad, I feel good about that.
Last edited by nedsaid on Sat Sep 23, 2017 12:58 am, edited 1 time in total.
A fool and his money are good for business.

snarlyjack
Posts: 500
Joined: Fri Aug 28, 2015 12:44 pm
Location: Montana

Re: How Do You Like My New 'Doo

Post by snarlyjack » Sat Sep 23, 2017 12:14 am

Just a thought for your analysis...

Jack Bogle said ER cost really do matter.

I like your individual stocks because once they are
purchased their is no on going costs. In my mind that is
the best benefit of individual stocks, (I like your stocks).

Imho, having 10 different funds is to much of a ER
cost/drag. I wonder if you should stream line the funds down
to 2 or 3.

This would cut your ER costs to a minimum amount (savings).
Also, it could make it easier for you or your beneficiaries.

Just a thought...I also wanted to thank you for all your
advise & help. It is very much appreciated. Congrat's
on your growth.

User avatar
nedsaid
Posts: 8831
Joined: Fri Nov 23, 2012 12:33 pm

Re: How Do You Like My New 'Doo

Post by nedsaid » Sat Sep 23, 2017 12:51 am

snarlyjack wrote:
Sat Sep 23, 2017 12:14 am
Just a thought for your analysis...

Jack Bogle said ER cost really do matter.

I like your individual stocks because once they are
purchased their is no on going costs. In my mind that is
the best benefit of individual stocks, (I like your stocks).

Imho, having 10 different funds is to much of a ER
cost/drag. I wonder if you should stream line the funds down
to 2 or 3.

This would cut your ER costs to a minimum amount (savings).
Also, it could make it easier for you or your beneficiaries.

Just a thought...I also wanted to thank you for all your
advise & help. It is very much appreciated. Congrat's
on your growth.
Well there are transaction costs in there but my average holding period is over 5 years, but yes
the expense ratio should be relatively low. These stocks are all in a Brokerage IRA account so unlike you and your High Dividend/Dividend Appreciation/Credit Union portfolio, I don't have to worry about taxes. I don't trade much though I have had for me a lot of activity over the last two years or so. Read through this thread and you can see what I have done.

I do not recommend that others follow what I have done with picking individual stocks. Your combination of High Dividend Index and Dividend Appreciation Index should have similar results. The thing is, my individual stocks have about matched the market performance, I suspected this for a long time but then found I could measure my performance with Quicken. Depending on when I peek, I either trail the market or beat the market by a bit. When I checked back on June 7, 2017, I was trailing the US Total Stock Market Index by 0.82% a year over 15 years. When I checked today, I beat Total Market by 0.17% a year over 15 years. That shows the need to believe in your strategy and hang in there even when it looks like things aren't working. Even good strategies will look bad from time to time. Pick a strategy that is theoretically sound and is proven by its historical performance, then stick to it.

In June, I was a zero. In September, I am a hero. Shows how quickly things can change. Also notice how much the long term results changed from June 2002-June 2017 compared to September 2002-September 2017. Total Market's 15 year results improved by 1.64% and my results improved by 2.63%. The summer of 2002 must have been pretty bad as it was towards the end of the 2000-2002 bear market. It also illustrates how time dependent performance comparisons are. I went from zero to hero with a 3 1/2 month shift in the performance comparisons.
A fool and his money are good for business.

Longtermgrowth
Posts: 447
Joined: Thu Nov 26, 2015 1:59 pm

Re: How Do You Like My New 'Doo

Post by Longtermgrowth » Sat Sep 23, 2017 1:01 am

snarlyjack wrote:
Sat Sep 23, 2017 12:14 am
Imho, having 10 different funds is to much of a ER
cost/drag. I wonder if you should stream line the funds down
to 2 or 3.
It's the blended ER of the funds in the portfolio that matters. I like inputting everything in Morningstar's "Instant X-Ray" to check the blended ER ("Average Mutual Fund Expense Ratio"), along with the investment style grid ("Stock Style Diversification"): http://portfolio.morningstar.com/RtPort ... =0.7055475
Last edited by Longtermgrowth on Sat Sep 23, 2017 1:09 am, edited 1 time in total.

User avatar
nedsaid
Posts: 8831
Joined: Fri Nov 23, 2012 12:33 pm

Re: How Do You Like My New 'Doo

Post by nedsaid » Sat Sep 23, 2017 1:09 am

Longtermgrowth wrote:
Sat Sep 23, 2017 1:01 am
snarlyjack wrote:
Sat Sep 23, 2017 12:14 am
Imho, having 10 different funds is to much of a ER
cost/drag. I wonder if you should stream line the funds down
to 2 or 3.
It's the blended ER of the funds in the portfolio that matters. I like inputting everything in Morningstar's "Instant X-Ray" to check the blended ER along with the investment style grid: http://portfolio.morningstar.com/RtPort ... =0.7055475
My portfolio looks more complex than it really is. I have a Mutual Fund IRA which has active funds in it, a Brokerage IRA and a Brokerage Roth IRA, and three leftover workplace savings plans which are mostly indexed. I also have a small Variable Annuity and a couple of small pensions. My accounts, except for the Brokerage IRA, are invested in similar fashion. When I turn 59 1/2, I will do some consolidation.

The blended ER of my funds and ETFs are about 0.48%. I subscribe to Morningstar and keep my portfolios listed there so that I can analyze my accounts individually and as a group. If you read through the thread, you will see that I have posted my styleboxes.
A fool and his money are good for business.

Longtermgrowth
Posts: 447
Joined: Thu Nov 26, 2015 1:59 pm

Re: How Do You Like My New 'Doo

Post by Longtermgrowth » Sat Sep 23, 2017 1:14 am

nedsaid wrote:
Sat Sep 23, 2017 1:09 am
My portfolio looks more complex than it really is. I have a Mutual Fund IRA which has active funds in it, a Brokerage IRA and a Brokerage Roth IRA, and three leftover workplace savings plans which are mostly indexed. I also have a small Variable Annuity and a couple of small pensions. My accounts, except for the Brokerage IRA, are invested in similar fashion. When I turn 59 1/2, I will do some consolidation.

The blended ER of my funds and ETFs are about 0.48%. I subscribe to Morningstar and keep my portfolios listed there so that I can analyze my accounts individually and as a group. If you read through the thread, you will see that I have posted my styleboxes.
I've followed it, nedsaid :happy Just wanted to make sure snarlyjack took advantage of the tool :beer I have to give you credit for doing quite well :sharebeer The individual stock holdings could have easily gone the other way!

User avatar
nedsaid
Posts: 8831
Joined: Fri Nov 23, 2012 12:33 pm

Re: How Do You Like My New 'Doo

Post by nedsaid » Sat Sep 23, 2017 1:39 am

Longtermgrowth wrote:
Sat Sep 23, 2017 1:14 am
nedsaid wrote:
Sat Sep 23, 2017 1:09 am
My portfolio looks more complex than it really is. I have a Mutual Fund IRA which has active funds in it, a Brokerage IRA and a Brokerage Roth IRA, and three leftover workplace savings plans which are mostly indexed. I also have a small Variable Annuity and a couple of small pensions. My accounts, except for the Brokerage IRA, are invested in similar fashion. When I turn 59 1/2, I will do some consolidation.

The blended ER of my funds and ETFs are about 0.48%. I subscribe to Morningstar and keep my portfolios listed there so that I can analyze my accounts individually and as a group. If you read through the thread, you will see that I have posted my styleboxes.
I've followed it, nedsaid :happy Just wanted to make sure snarlyjack took advantage of the tool :beer I have to give you credit for doing quite well :sharebeer The individual stock holdings could have easily gone the other way!
Well, individual stocks and active mutual funds are how I got started. My first mutual fund was purchased in 1984 and my first stock in 1988. I didn't start indexing in earnest until 1999. When I had my portfolio analyzed by different people, I got Morningstar reports produced on the proprietary Principia Pro software that financial planners use. I can do most of those things with the Morningstar subscription but they save some features for the exclusive use of financial planners. Anyway, they taught me how to use the Morningstar styleboxes to see what I actually owned in my portfolio.

I was taught by the four brokers I have worked with how to invest for Value. The office where I had my Brokerage IRA account for years had two Money Magazine All-Star Brokers who were Value guys. The other brokers worked off of their ideas. I also learned a lot from Peter Lynch's books on stock investing. Pretty much buy good stuff at reasonable prices and hold it for a long time. I am not a deep Value investor, it would be fair to say that I am Value oriented.

The stylebox of my individual retirement stocks is as follows:

62 19 14
00 00 00
05 00 00

Price/Projected Earnings is 16.67 and Price/Book is 2.18. Yield is 2.69%.

DFA US Large Cap Value I has a stylebox as follows:

41 22 12
15 09 02
00 00 00

Price/Projected Earnings is 16.36 and Price/Book is 1.70. Yield is 2.30%.
Note this fund has a 15 year performance of 10.38% a year and my stocks did 10.28%. Clearly,
I am not an idiot having done better than Vanguard Value Index, American Century Value, and US Total Stock Market Index.

So take that Larry Swedroe and Bill Bernstein. I haven't set the world on fire with my individual stocks but clearly owning them has not hurt me.
A fool and his money are good for business.

User avatar
nedsaid
Posts: 8831
Joined: Fri Nov 23, 2012 12:33 pm

Re: How Do You Like My New 'Doo

Post by nedsaid » Sun Sep 24, 2017 5:36 pm

Using the Stock Intersection feature of Morningstar X-Ray, I can see what stocks I am most invested in by percentage of the retirement portfolio. This includes both what I own individually and within the mutual funds that I own. Another way of seeing what you really own.

1. Weyerhauser Company 1.99%
2. Johnson & Johnson 1.45%
3. Exxon Mobil Corp 1.38%
4. Boeing Corp 1.31%
5. Microsoft Corp 1.30%
6. Walt Disney Co. 1.24%
7. JP Morgan & Chase 1.16%
8. Pfizer Inc. 0.95%
9. US Bancorp 0.86%
10. General Electric 0.64%
11. Applied Materials 0.60%
12. Apple Inc. 0.55%
13. Gilead Sciences 0.50%
14. Coca Cola Company 0.46%
15. American National Insurance Co. 0.41%
16. Samsung Electronics 0.31%
17. Ford Motor Company 0.31%
18. Amazon.com Inc. 0.28%
19. Tencent Holdings Limited 0.27%
20. Facebook Inc A 0.26%
21. Alibaba Group Holding Ltd ADR 0.25%
22. Alphabet Inc. (Google) 0.25%
23. AT&T Inc. 0.22%
24. Wells Fargo & Co 0.22%
25. Taiwan Semiconductor Manufacturing Co. LTD 0.22%

A couple things that I noticed, I am light in the FAANG Stocks (Facebook, Amazon, Apple, Netflix, and Google). Second, I have no idea what Tencent Holdings is and that is number 19 on the list. Just Googled Tencent and it is a Chinese holding company, largely an Internet, Gaming, Social Network, E-Commerce, and Smartphone Company. Hmmm. Very interesting.
A fool and his money are good for business.

snarlyjack
Posts: 500
Joined: Fri Aug 28, 2015 12:44 pm
Location: Montana

Re: How Do You Like My New 'Doo

Post by snarlyjack » Sun Sep 24, 2017 8:19 pm

Nedsaid,

I' am going to get into trouble saying this
but I love your stocks. Your a Vanguard High
Dividend Yield Index investor at heart. They have
some great companies in the fund. You have a
great portfolio going...

Pss...you need to get yourself some Pepsi.

Longtermgrowth
Posts: 447
Joined: Thu Nov 26, 2015 1:59 pm

Re: How Do You Like My New 'Doo

Post by Longtermgrowth » Sun Sep 24, 2017 9:59 pm

Interesting list of top holdings! I see some of the top holdings of Vanguard's Total International Stock Index in there, but unfortunately Alibaba (BABA) isn't included in the Vanguard international funds currently.

User avatar
nedsaid
Posts: 8831
Joined: Fri Nov 23, 2012 12:33 pm

Re: How Do You Like My New 'Doo

Post by nedsaid » Mon Sep 25, 2017 12:01 pm

snarlyjack wrote:
Sun Sep 24, 2017 8:19 pm
Nedsaid,

I' am going to get into trouble saying this
but I love your stocks. Your a Vanguard High
Dividend Yield Index investor at heart. They have
some great companies in the fund. You have a
great portfolio going...

Pss...you need to get yourself some Pepsi.
The top 11 on the list, I own individually as well as in my funds. 13, 14, 15, 17 are also held individually. Apple, Samsung, Amazon, Tencent, Facebook, Alibaba, Google, Wells Fargo, and Taiwan Semiconductor are held in funds only. I hold AT&T in a DRIP plan but not in a retirement account.

As far as Vanguard High Dividend, I couldn't help but notice this too. I saw a lot of my stocks in there that I own. The thing is, I don't and won't own the Master Limited Partnerships that have the really high yields and it looks like Vanguard doesn't buy them either. When I buy, I look for dividend yield in the 2-3% range, but dividends are a secondary consideration. I am looking for a business to hold for a long time and I am looking to buy at a good price. Coke was expensive, I held my nose and bought anyway. Other recent purchases like Ford and Gilead Sciences were dirt cheap when I bought them.

Yes, I have had my eyes on Pepsi for a long time too. Another stock that is never cheap.
A fool and his money are good for business.

User avatar
nedsaid
Posts: 8831
Joined: Fri Nov 23, 2012 12:33 pm

Re: How Do You Like My New 'Doo

Post by nedsaid » Mon Sep 25, 2017 12:09 pm

Longtermgrowth wrote:
Sun Sep 24, 2017 9:59 pm
Interesting list of top holdings! I see some of the top holdings of Vanguard's Total International Stock Index in there, but unfortunately Alibaba (BABA) isn't included in the Vanguard international funds currently.
What I wanted to do was to teach people how to use the X-Ray feature at Morningstar and also to use the stock intersection feature. There were surprises in there, I had two Chinese companies (Tencent and Alibaba) and a Taiwanese company (Taiwan Semiconductor) in my top 25. Despite my bearishness on China, I am invested there whether I like it or not. :wink: Also Amazon, Facebook, Google showed up and these are also stocks I would not pick on my own. I didn't chase the internet stuff in the 1990's and I am not chasing them now. I guess the mutual funds do that for me.

I am a big fan of Morningstar. It gives me great research at my fingertips and I can really do in depth analysis of my portfolio. Again, as I went through the list, there were surprises.
A fool and his money are good for business.

User avatar
nedsaid
Posts: 8831
Joined: Fri Nov 23, 2012 12:33 pm

Re: How Do You Like My New 'Doo

Post by nedsaid » Thu Oct 12, 2017 7:11 pm

1. US Total Stock Market Index 12.23% (Up 15.41% year to date)
2. Vanguard US Total Bond Market Index 6.28% In Fund and in ETF form. (Up 3.32% YTD)
3. Diversified Bond Fund 6.12% (Up 3.30% year to date)
4. Cash Balance Retirement Pension 4.34% (Frozen after 2009).
5. TIPS Fund 3.45% (Up 2.20% Year to Date)
6. Vanguard Small Value Index ETF 2.95% (Up 7.82% Year to date)
7. GNMA Fund 2.93% (Up 1.91% Year to date)
8. International Growth Fund 2.84% (Up 28.12% Year to date)
9. Fidelity Freedom 2025 Fund Class K 2.78% (In lieu of Cash Balance Pension contributions. Up 13.73% year to date.)
10. International Index Fund 2.51% (Up 22.0% Year to date)

Top 10 Holdings 46.43%
11. S&P Small Cap 600 ETF 2.47% (Up 9.95% Year to date)
12. Foreign Value Fund 2.12% (Up 15.59% Year to date)
13. Weyerhauser 1.99% (Up 18.05% YTD)
14. World Allocation Fund 1.80% (Up 12.35% YTD)
15. Mid/Small-Cap International Growth Fund 1.77% (Up 37.71% Year to Date)


Top 15 Holdings 56.58%

Individual Stocks 12.69% 18 stocks.


Top 10 Individual Stocks
1. Weyerhauser
2. Boeing Company
3. Johnson & Johnson
4. Exxon/Mobil Corporation
5. Walt Disney Company
6. Microsoft Corporation
7. JP Morgan & Chase Co.
8. US Bancorp
9. Pfizer
10. Applied Materials Inc.

Stock Stylebox
26 20 19
05 06 07
07 06 04

US Stocks 48%
Foreign Stocks 19%
Bonds 30%
Cash 3%
Other 1%

67% Stocks, 33% Bonds and Cash, 1% Other.

Average mutual fund expense ratio: 0.48%

Not too much change here. I did another round of mild rebalancing from stocks to bonds, not quite one percent of my portfolio, so I am pretty much running in place.

International is doing great, and like the US, Growth is doing better than Value. A pretty good year for bonds so far.
A fool and his money are good for business.

garlandwhizzer
Posts: 1669
Joined: Fri Aug 06, 2010 3:42 pm

Re: How Do You Like My New 'Doo

Post by garlandwhizzer » Thu Oct 12, 2017 8:16 pm

Nedsaid, you're an experienced and, in my opinion, savvy investor. If you have trouble beating the S&P 500 over a decade, that says a lot. Earlier in my investing career in the 1980s and 1990s, I was 100% individual stocks, no mutual funds, no index funds, just stock picking. That seemed to work quite well in tech boom because I was heavily concentrated in tech. I also believe markets were less efficient back then and opportunities for outperformance actually were available. My mistake was to confuse a roaring bull with investing genius. The collapse of tech in 2000-3 taught me a lesson. It's very hard for anyone to beat a comparable index over a long period of time. No matter how smart you are or how much you know, it's a huge challenge. Ask Warren Buffett if you don't believe me.

Most outperformance we see is on cherry-picked backtesting periods and is IMO due to chance or luck and not reproducible going forward over significant time frames. Our markets are heavily scrutinized by full time professionals and it is unlikely that Joe Average Investor will find something they missed. Now I'm almost 100% in index funds. My transition was much like nedsaid's. It is very common to start our trying to pick winning stocks and avoid the losers. Then after many years and many wounds, you finally see the light and move to index investing. While it is notoriously difficult to outperform long term, it is incredibly easy and simple to perform very well with index investing, much better on average than those who try the active approach. It is exceptionally rare, almost unheard of, for someone to go the other way, starting out with indexing then giving up and moving to stock picking and finding long term success. That should tell you something.

Garland Whizzer

User avatar
nedsaid
Posts: 8831
Joined: Fri Nov 23, 2012 12:33 pm

Re: How Do You Like My New 'Doo

Post by nedsaid » Sat Oct 14, 2017 2:14 pm

I am telling people what I have done so that there is transparency. I don't like to tell people to do as I say and not as I do. You can see that I have done some things that are not recommended by the Boglehead's forum. My estimate is that my portfolio is about 35% indexed, 12% to 13% in individual stocks, and a bit more than 50% active. I do own funds that I paid loads on which are lower expense ratio American and Franklin-Templeton Funds. The great majority of my active funds were purchased no-load. The expense ratios of my funds and ETFs are about 0.48%.

The individual stocks, fortunately have not hurt me. Over time, they probably have more or less tracked the market.

I am Value tilted, I have 7% Small-Cap Value as compared to 3% for the US Total Stock Market Index. I also have a Large Value tilt at 26% vs. 25% for Total Stock Market. Small Caps are at 17% vs. 9% for Total Stock Market, so I tilt towards Small-Caps as well.

My active funds are pretty much in four categories: Earnings and Price Momentum, Value, Quantitative (optimized indexing), and plain vanilla bond funds. As far as I can tell, my active funds have approximated market returns over time but in recent years the Earnings and Price Momentum, and the Value funds have cooled off. There are periods in which my active funds have performed quite well. About 2007, my favorite mutual fund company was recognized for its excellent performance which has in later years been cooling off a bit.

So it appears that my strategies have not hurt me, particularly in light of Value having underperformed the Total Market since the 2008-2009 financial crisis.

At some point, I will run another set of performance numbers and all can see how I have done.
A fool and his money are good for business.

2pedals
Posts: 281
Joined: Wed Dec 31, 2014 12:31 pm

Re: How Do You Like My New 'Doo

Post by 2pedals » Sat Oct 14, 2017 2:45 pm

Nedsaid

I really do appreciate you sharing your experiences with me and other Bogleheads.

When I was younger, I was thinking that I could out smart the market. I did at times but I made some very serious mistakes in the 2008 drop. I did not understand how much a big market drop would scare me. I think this was compounded by my age (48) at the time thinking that there is no way I could make up for those loses, since I wanted to retire early. Thinking back, I was too young to pull out of the market the way I did and waited way too long to get back in. In short I was over invested for my age and I paid the price for my mistakes.

I am so glad I found this web site and believe the most important thing in investing is making sure you have your asset allocation set right. After you have your defined correctly, the 3 fund approach is all you need. Best of all the 3 fund approach is so simple it's hard to mess it up.

User avatar
nedsaid
Posts: 8831
Joined: Fri Nov 23, 2012 12:33 pm

Re: How Do You Like My New 'Doo

Post by nedsaid » Sat Oct 14, 2017 3:55 pm

2pedals wrote:
Sat Oct 14, 2017 2:45 pm
Nedsaid

I really do appreciate you sharing your experiences with me and other Bogleheads.

Nedsaid: It is my hope that others will learn from what I have done right and what I have done wrong. My portfolio is not as complex as it appears, my portfolios are all invested in similar fashion except my Brokerage IRA that has my individual stocks and ETFs. My loaded funds are also in that account and in a Brokerage Roth IRA. So big picture, I am invested about 2/3 stocks and 1/3 bonds with probably 28% of my stocks and 7% of my bonds invested internationally. When I turn 59 1/2 in early 2019, I will likely do some consolidation and simplification.

When I was younger, I was thinking that I could out smart the market. I did at times but I made some very serious mistakes in the 2008 drop. I did not understand how much a big market drop would scare me. I think this was compounded by my age (48) at the time thinking that there is no way I could make up for those loses, since I wanted to retire early. Thinking back, I was too young to pull out of the market the way I did and waited way too long to get back in. In short I was over invested for my age and I paid the price for my mistakes.

Nedsaid: Proper asset allocation is a huge issue. I grew to appreciate the attributes of bonds during the bear markets of 2000-2002 and 2008-2009, the bonds kept my losses tolerable and thus I was able to stay the course. In your case, you were too brave with too much in stocks and the losses got to you. To be honest, the losses in 2008-2009 really got to me, my losses were the equivalent of two years of take home pay. It was hard to take but I knew that if I sold that I would never meet my retirement objectives.

I am so glad I found this web site and believe the most important thing in investing is making sure you have your asset allocation set right. After you have your defined correctly, the 3 fund approach is all you need. Best of all the 3 fund approach is so simple it's hard to mess it up.

Nedsaid: Nothing at all wrong with a three fund approach. Having only three funds makes a portfolio much easier to maintain. I would say that the most important lesson is to be able to control your emotions, markets will get to extremes of euphoria or depression, it is important not to let your emotions get away from you and cause unwise investment decisions.

A fool and his money are good for business.

User avatar
nedsaid
Posts: 8831
Joined: Fri Nov 23, 2012 12:33 pm

Re: How Do You Like My New 'Doo

Post by nedsaid » Mon Nov 06, 2017 6:04 pm

2017 is shaping up to be another very good year in the investment markets.

I own all these index funds below:

Fidelity US Total Market Index is up 16.86% year to date.
Vanguard US Extended Market Index is up 14.14%
Fidelity Developed Markets Index is up 22.88% YTD.
Fidelity Emerging Markets Index is up 33.22% YTD.
Vanguard Total US Bond Market Index is up 3.51% YTD.
Fidelity Inflation Adjusted Bond Index is up 2.24% YTD.

Not bad. Let's compare to some active funds I have.

American Century Value is up 4.05%. This fund is on a cold streak even against other Large Value.
Loomis Sayles Value is up 10.66%.
American Century Income & Growth is up 15.95%. (Not bad for a Large Value fund).
American Century Heritage is up 17.89%. (Mid-Cap Growth)
American Century Mid-Cap Value is up 7.65%.
American Century Small-Cap Growth is up 22.29%.
Allianz NFJ Small-Cap Value is up 8.38%.

American Century International Growth, a long time favorite, is up 28.30%.
American Funds EuroPacific Growth is up 29.87%.
Templeton Foreign A is up 15.02%. (Foreign Large Value)
American Century International Opportunities (Foreign Mid/Small Cap) is up 39.36%.
Fidelity International Small-Cap is up 27.38%.
American Century Emerging Markets is up 42.07%.
Templeton Developing Markets A is up 36.96%.

American Century Diversified Bond is up 3.27% (Historically, this fund beats Bond index by a tad).
American Century Inflation Adjusted Bond is up 2.20%.
Fidelity GNMA is up 1.95%.
American Century International Bond is up 7.93%.
Templeton Global Bond up 4.13%.

So you can see International Stocks are doing very well, particularly on the Growth side. Growth rules on the US side as well. Value lags wherever you look: US and International, Large Cap and Small Cap. Bonds on both the US and International side are up.

All the American Century funds are earnings and price momentum except for the Value funds I listed. So the pedal to the metal strategy is working now. Obviously, their Large Value strategy is not working now. I have learned to be patient as styles go in and out of favor.

After almost ten years of waiting, it seems that International Mid/Small Cap is finally starting to hit its stride. This asset class had lagged for years, now it is on fire.
A fool and his money are good for business.

snarlyjack
Posts: 500
Joined: Fri Aug 28, 2015 12:44 pm
Location: Montana

Re: How Do You Like My New 'Doo

Post by snarlyjack » Mon Nov 06, 2017 10:35 pm

Nedsaid,

You know I love you & I can tell you've been a stock
guy forever. Your funds are doing great...

However, I think your ER costs must be high. So let's
say we get a nice Christmas rally & 2017 turns into a
excellent year. What would be the chances of me talking you
into consolidating some of your funds? You know, selling
some funds & putting the money into the TSM fund.

Yes, I know you might take a tax hit but you could save on
future ER costs. Consolidate & simplify a bit for the future.
And, possibly lighten up a bit in case of a downturn. Just
floating a idea out their for you to ponder on...

User avatar
nedsaid
Posts: 8831
Joined: Fri Nov 23, 2012 12:33 pm

Re: How Do You Like My New 'Doo

Post by nedsaid » Tue Nov 07, 2017 12:53 pm

snarlyjack wrote:
Mon Nov 06, 2017 10:35 pm
Nedsaid,

You know I love you & I can tell you've been a stock
guy forever. Your funds are doing great...

However, I think your ER costs must be high. So let's
say we get a nice Christmas rally & 2017 turns into a
excellent year. What would be the chances of me talking you
into consolidating some of your funds? You know, selling
some funds & putting the money into the TSM fund.

Yes, I know you might take a tax hit but you could save on
future ER costs. Consolidate & simplify a bit for the future.
And, possibly lighten up a bit in case of a downturn. Just
floating a idea out their for you to ponder on...
My ER costs on average are 0.48%. I have worked them down from about 0.74% over the last
dozen years. The American Century funds have higher expense ratios, at least compared to
Vanguard. I have stuck with them because my performance has been okay and their Value and Earnings/Price momentum funds run hot and cold. As you can see, Earnings/Price Momentum is on fire and their Value fund which I have owned and admired for many years is dead, stone cold.

These are all in tax deferred accounts, I don't have to worry about capital gain taxes.

My very first mutual fund was American Century Select, which I purchased on July 16, 1984. Whenever I call them, I get comments about how long I have had investments there. Probably most of the people I talk to were born since then. 33 years is a long time. I had just turned 25 when I made my first investment and now I am 58. I am rare in that I am pretty loyal. Plus these guys taught me a whole lot about investing. They have a brokerage too and I own a US Total Stock Market fund there.

I also have done business with my same independent broker for probably twenty years now. Learned a lot from him too. My individual stocks and ETFs are there and I have load funds there too.

When I turn 59 1/2 in another 15 months or so, I will probably do some consolidating of accounts and funds. Probably get to three custodians. Not sure about the individual stocks, I have enjoyed owning them. Probably have about matched market averages with the individual stocks.

Yes, I am thinking about de-risking too, particularly as the US Stock Market gets to be more and more expensive. I am 58 and I have to realize that retirement is getting closer and closer.
A fool and his money are good for business.

snarlyjack
Posts: 500
Joined: Fri Aug 28, 2015 12:44 pm
Location: Montana

Re: How Do You Like My New 'Doo

Post by snarlyjack » Tue Nov 07, 2017 1:09 pm

Good Morning Nedsaid,

I slept on my advise to you, and went hmmm...

My favorite 2 investors, Ronald Read (The Janitor Next Door) &
The Walgreens Millionaire never sold a stock. They bought a lot
of stocks (funds) but once purchased never sold them.

Ronald Read gave his stocks away at death (92 years old). And
The Walgreens Millionaire gave his stock to the Audubon Society
thus avoiding taxes, (96/98 years old).

Maybe we should learn from my 2 favorite investors & just hold
forever. We live in the gray...their is no absolute right or wrong
answer...I second guess myself all the time. It drives me crazy...

User avatar
triceratop
Moderator
Posts: 3782
Joined: Tue Aug 04, 2015 8:20 pm
Location: la la land

Re: How Do You Like My New 'Doo

Post by triceratop » Tue Nov 07, 2017 1:10 pm

nedsaid,
Have you ever tried to construct a timeseries of your daily/weekly/monthly returns based on the funds you owned at various times? It would be interesting to see your portfolio factor loads over time and how much is explained by factors. My real question concerns this: if you are tilted to value or small which has excess returns over the period you've been computing, and then you barely match or exceed the S&P500 or Total Market returns, have you really "beaten the market"? In other words, you could have more efficiently invested to obtain the same risk exposures and ultimately performed better, more closely matching the Market + Value + Size returns.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

User avatar
nedsaid
Posts: 8831
Joined: Fri Nov 23, 2012 12:33 pm

Re: How Do You Like My New 'Doo

Post by nedsaid » Tue Nov 07, 2017 4:17 pm

triceratop wrote:
Tue Nov 07, 2017 1:10 pm
nedsaid,
Have you ever tried to construct a timeseries of your daily/weekly/monthly returns based on the funds you owned at various times? It would be interesting to see your portfolio factor loads over time and how much is explained by factors. My real question concerns this: if you are tilted to value or small which has excess returns over the period you've been computing, and then you barely match or exceed the S&P500 or Total Market returns, have you really "beaten the market"? In other words, you could have more efficiently invested to obtain the same risk exposures and ultimately performed better, more closely matching the Market + Value + Size returns.
What I did was take my American Century funds in the proportion they are today and went back 12 years in portfolio visualizer. I compared this to a 3 fund portfolio using the same proportion of US Stocks/International Stocks/Bonds. I had to do a couple substitutions as a couple AC funds didn't go back that far. What I found was that the 3 fund beat American Century by a hair. I have rebalanced and moved stuff around a bit so it is impossible for me to compute precisely with portfolio visualizer. What I can do is use Quicken to compute my returns over 1, 3, 5, 10, 15 years or whatever periods I wanted. I can calculate returns by investment account. From portfolio visualizer, I could figure out the weighted returns for a three fund portfolio for comparison.

A couple of years ago, Larry Swedroe did a comparison of Vanguard vs. American Century and found that Vanguard outperformed by 0.10% a year. That was in line with my own eyeballing.

What I did notice was that my American Century portfolio at one time was beating my Workplace Savings Plan. My workplace plan was mostly index funds and the asset allocations were similar, so American Century was doing better even with the fee differential. I have noticed that the Workplace Savings Plan is outperforming again, partly because I have de-risked the American Century portfolio a bit. Also, Value and Earnings/Price Momentum have been lagging since 2008-2009.

Edit: Not my imagination, I looked from 1/1/2003 through 8/31/2008, the stretch of time between bear markets.
American Century 8.19%
Former Employer Workplace Savings Plan 7.57%


When I get time, I can post my investment returns again. It appears that up until the 2008-2009 financial crisis that I was the man. I had an Ameriprise Advisor run my portfolios through the Morningstar Principia Pro software and the efficient frontiers for American Century looked excellent. I was in that prized "northwest quadrant" which meant it delivered excess returns with a bit less risk.

Since Value and Earnings/Price momentum disciplines as practiced by American Century (2016 was great for Value and 2017 great for earnings/price momentum) haven't done so well vs. the market since 2008-2009, I am probably trailing a three fund portfolio a bit. Hard to say, I am eyeballing. Also checked Quicken vs. returns I calculated on an Excel spreadsheet and the results were pretty close, so I have more confidence in Quicken than before.

But as far as how the factor weighting has contributed to my returns, hard to say. I am just not that sophisticated in attributing my sources of return. I use Quicken and do a lot of eyeballing with Morningstar. I can do some manual IRR calculations with Excel making assumptions about new money being added to my accounts.

Triceratop, you can go back to September and see the last time that I calculated returns from my individual stocks. Back in June, I calculated the returns for my entire retirement portfolio. My preliminary conclusion is that factor weighting has not helped me since the 2008-2009 financial crisis. It appears that factor weighting plus International Stocks and REITs helped from 2000-2008.
Last edited by nedsaid on Tue Nov 07, 2017 6:54 pm, edited 3 times in total.
A fool and his money are good for business.

User avatar
nedsaid
Posts: 8831
Joined: Fri Nov 23, 2012 12:33 pm

Re: How Do You Like My New 'Doo

Post by nedsaid » Tue Nov 07, 2017 4:21 pm

snarlyjack wrote:
Tue Nov 07, 2017 1:09 pm
Good Morning Nedsaid,

I slept on my advise to you, and went hmmm...

My favorite 2 investors, Ronald Read (The Janitor Next Door) &
The Walgreens Millionaire never sold a stock. They bought a lot
of stocks (funds) but once purchased never sold them.

Ronald Read gave his stocks away at death (92 years old). And
The Walgreens Millionaire gave his stock to the Audubon Society
thus avoiding taxes, (96/98 years old).

Maybe we should learn from my 2 favorite investors & just hold
forever. We live in the gray...their is no absolute right or wrong
answer...I second guess myself all the time. It drives me crazy...
Well, my individual stocks are about 12 1/2 percent of my retirement portfolio. Don't have
my millions yet.
A fool and his money are good for business.

snarlyjack
Posts: 500
Joined: Fri Aug 28, 2015 12:44 pm
Location: Montana

Re: How Do You Like My New 'Doo

Post by snarlyjack » Tue Nov 07, 2017 4:53 pm

Nedsaid,

Are you up for some good news.

In my studying of "the millionaire next door types" (Warren Buffett,
Ronald Read, Walgreens Millionaire, etc.) Their compounding out
really started hitting at about age 60. Most of these millionaires
became wealthy in the 2nd half of their life. You still have
age 100 - age 58 = 42 more years of compounding. At 7% growth
money doubles every 10 years. Your money could double 4 more
times in your life time. I'd have to get my super computer out
but it could be a lot of $$$. It's all about making good decisions
& efficiency now...

User avatar
nedsaid
Posts: 8831
Joined: Fri Nov 23, 2012 12:33 pm

Re: How Do You Like My New 'Doo

Post by nedsaid » Tue Nov 07, 2017 6:23 pm

snarlyjack wrote:
Tue Nov 07, 2017 4:53 pm
Nedsaid,

Are you up for some good news.

In my studying of "the millionaire next door types" (Warren Buffett,
Ronald Read, Walgreens Millionaire, etc.) Their compounding out
really started hitting at about age 60. Most of these millionaires
became wealthy in the 2nd half of their life. You still have
age 100 - age 58 = 42 more years of compounding. At 7% growth
money doubles every 10 years. Your money could double 4 more
times in your life time. I'd have to get my super computer out
but it could be a lot of $$$. It's all about making good decisions
& efficiency now...
I lost a lengthy post where I analyzed my returns, but it appears that I am in the ballpark
of where I should be.

Individual stocks returned 9.86% vs. 9.76% Vanguard Total Stock Market Index over 15 years.

I compared a 50% US Stocks, 17% Global Stocks ex-US, 33% US Total Bond Index never rebalanced portfolio from January 1, 2002 through September 30, 2017. The 50/17/33 portfolio returned 6.60% and my retirement portfolio returned 6.34%. Keep in mind, I started with 80% stock/20% bonds and cash in early 2000 adding new cash at 60% stocks/40% bonds so my allocation drifted to about 70% stocks/30% stocks. I did add new cash at 100% stocks for about a year during the financial crisis. I think my allocation got to 54% stocks/46% bonds and cash during the depths of the 2008-2009 bear market. I didn't start rebalancing until my program of mild rebalancing from stocks to bonds starting in July 2013 and continuing to the present. That is the closest I can come to a good comparison.

During the 1/1/2002 - 9/30/2017 time period, here is how my accounts performed:
(note: these are IRR calculations from Quicken)
American Century Retirement 5.94%. (active funds)
Former Employer Workplace Savings Plan 7.49%. (mostly index funds)
Brokerage IRA Account 7.05% (mostly stocks: contains ind stocks, ETFs, load funds)
Total Nedsaid Retirement 6.34%
50/17/33 Model Portfolio never rebalanced 6.60%

For fun, lets look at 1/1/2000 - 8/31/2008 to see how things did up until financial crisis:
American Century Retirement 3.40% (relatively large starting balance, added what I could through IRA contributions)
Former Employer Workplace Savings Plan 6.40% (low starting balance - added considerable funds with paychecks throughout time period. Started this in March 1999.)
Brokerage IRA Account 1.69%
Total Nedsaid Retirement 2.84%
This shows what the 2000-2002 bear market did to returns.

Note that my calculations from Quicken are Internal Rate of Return (IRR) which takes into account cash added to my investment accounts over the time period.

The results from Portfolio Visualizer are Compound Annual Growth Rate (CAGR) which takes into account beginning balance, ending balance, and number of time periods.

Using Quicken Data Growth of 10,000 from 1/1/2002 through 12/31/2016
American Century Retirement CAGR 6.00% Starting 10,000 Ending 23,976 15 Years IRR 5.45%
(I rolled a American Century 403(b) into the IRA in 2012 and this probably affected IRR calculations).
Brokerage IRA CAGR 6.67% Starting 10,000 Ending 26,348 15 Years IRR 6.70%
Former Workplace Savings Plan IRR 6.83% Growth of $10,000 numbers were nonsensical.
Nedsaid Retirement CAGR 7.61% Starting 10,000 Ending 30,063 15 Years IRR 5.83%
50/17/33 Model Portfolio CAGR 6.11% (not rebalanced)

Bottom line, this is what I believe my annual returns were for the years 2002-2016:
American Century Retirement 6.00% per year (60% to 65% stocks)
Brokerage IRA 6.70% a year (85% to 95% stocks)
Former Workplace Savings Plan 6.30% a year (60% to 70% stocks) I adjusted this figures downward
as it seemed hard to believe this would have outperformed the Brokerage IRA which had a higher percentage of stocks.
Nedsaid retirement probably 6% to 6.3% a year taking into account a cash balance pension.

Clearly something is amiss here with the growth of $10,000 number for the Nedsaid Retirement and the former workplace savings plan and the cash balance pension. There is a clink in the works. I believe what happened has to do with a Cash Balance pension for which Quicken doesn't seem to properly account for. I adjusted for that and the CAGR number for Nedsaid Retirement still doesn't make sense. My guess is that the proper number is more like 6.10%.

It appears that adding cash to investment accounts over time throws off the growth of $10,000 number in Quicken. So if you are adding a lot of cash over time, CAGR calculations based on that will be inaccurate. The IRR calculations in Quicken seem to be more accurate.
Last edited by nedsaid on Wed Nov 08, 2017 5:25 pm, edited 5 times in total.
A fool and his money are good for business.

snarlyjack
Posts: 500
Joined: Fri Aug 28, 2015 12:44 pm
Location: Montana

Re: How Do You Like My New 'Doo

Post by snarlyjack » Tue Nov 07, 2017 7:10 pm

Nedsaid,

Ok...Let's get into some math.
Time Period: 1/1/2002-9/30/2017
(5.94 + 7.49 + 7.05 + 6.34 + 6.60 = 33.42 ./. 5 = 6.684

Enclosed is a rule of 72 calculator.
(How fast money doubles) (compounding periods).
Age 100 - Age 58 = 42 years.

Enjoy & have fun...

http://moneychimp.com/features/rule72.htm

Here is another pretty good calculator with graphs.

https://www.investor.gov/additional-res ... calculator

snarlyjack
Posts: 500
Joined: Fri Aug 28, 2015 12:44 pm
Location: Montana

Re: How Do You Like My New 'Doo

Post by snarlyjack » Wed Nov 08, 2017 7:31 am

This is how I use the interest rate calculator.

1). I go to "Portfolio Visualizer" & plug in my fund symbols,
to get the CAGR number.
For Example:
a). VHDYX 7.53
b). VTSAX 8.16
c). VFINX 7.82

2). Then I go to the interest rate calculator & use the CAGR
number to project my interest rate & money doubling calculations.

3). There is also a Savings Rate Calculator that will work the numbers
backwards. (I want to have $1Million. Using the CAGR number how much do
I have to save each month to accumulate $1Million).

This is a very useful calculator in evaluating which funds I might be
interested in. It's another tool in our toolbox to look at numbers
& graphs. Once I have the numbers & graphs, I can make other
determinations such as what am I trying to accomplish.

The interest rate calculator with it's graph is a great tool that
we can use to help our decisions. Have fun & enjoy it...

User avatar
nedsaid
Posts: 8831
Joined: Fri Nov 23, 2012 12:33 pm

Re: How Do You Like My New 'Doo

Post by nedsaid » Wed Nov 08, 2017 5:33 pm

triceratop wrote:
Tue Nov 07, 2017 1:10 pm
nedsaid,
Have you ever tried to construct a timeseries of your daily/weekly/monthly returns based on the funds you owned at various times? It would be interesting to see your portfolio factor loads over time and how much is explained by factors. My real question concerns this: if you are tilted to value or small which has excess returns over the period you've been computing, and then you barely match or exceed the S&P500 or Total Market returns, have you really "beaten the market"? In other words, you could have more efficiently invested to obtain the same risk exposures and ultimately performed better, more closely matching the Market + Value + Size returns.
Triceratop, I attempted calculating portfolio returns with IRR in Quicken and using Growth of $10,000 which was also calculated in Quicken. I use the Growth of $10,000 to generate CAGR returns using a calculator I found here:

http://cagrcalculator.net/result/

The Quicken growth of $10,000 seems affected by ongoing cash contributions. In the case of a workplace savings plan, the results were non-sensible. I added lots of monies to that account over the years.

To do the calculations correctly, I would have to go year by year and calculate growth of $10,000 manually. If I had accurate growth of $10,000 numbers then calculating CAGR would be duck soup. I have to rely on the IRR numbers from Quicken. From what I could check, those numbers seem reasonable.

The process would be time consuming and frankly I probably won't take the time.

As you can see above, I found numbers calculated that didn't make 100% sense.
A fool and his money are good for business.

User avatar
triceratop
Moderator
Posts: 3782
Joined: Tue Aug 04, 2015 8:20 pm
Location: la la land

Re: How Do You Like My New 'Doo

Post by triceratop » Wed Nov 08, 2017 5:42 pm

nedsaid wrote:
Wed Nov 08, 2017 5:33 pm
triceratop wrote:
Tue Nov 07, 2017 1:10 pm
nedsaid,
Have you ever tried to construct a timeseries of your daily/weekly/monthly returns based on the funds you owned at various times? It would be interesting to see your portfolio factor loads over time and how much is explained by factors. My real question concerns this: if you are tilted to value or small which has excess returns over the period you've been computing, and then you barely match or exceed the S&P500 or Total Market returns, have you really "beaten the market"? In other words, you could have more efficiently invested to obtain the same risk exposures and ultimately performed better, more closely matching the Market + Value + Size returns.
Triceratop, I attempted calculating portfolio returns with IRR in Quicken and using Growth of $10,000 which was also calculated in Quicken. I use the Growth of $10,000 to generate CAGR returns using a calculator I found here:

http://cagrcalculator.net/result/

The Quicken growth of $10,000 seems affected by ongoing cash contributions. In the case of a workplace savings plan, the results were non-sensible. I added lots of monies to that account over the years.

To do the calculations correctly, I would have to go year by year and calculate growth of $10,000 manually. If I had accurate growth of $10,000 numbers then calculating CAGR would be duck soup. I have to rely on the IRR numbers from Quicken. From what I could check, those numbers seem reasonable.

The process would be time consuming and frankly I probably won't take the time.

As you can see above, I found numbers calculated that didn't make 100% sense.
With ongoing contributions you need XIRR type capabilities. Anyway, if you can't produce correlations to the factors it probably isn't worth pursuing this much; it is just a question I had, and something to keep in mind when determining whether you have beaten the market.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

itstoomuch
Posts: 4830
Joined: Mon Dec 15, 2014 12:17 pm
Location: midValley OR

Re: How Do You Like My New 'Doo

Post by itstoomuch » Wed Nov 08, 2017 5:47 pm

Don't get too greedy. :P
One of my holdings really popped today, I fat fingered a sell of all shares (intended just 100) and then the company proceed to gain another 4 points.
It's OK since I wanted to be holding a lot of cash going forward. Made my 2017 goal of +10% Discretionary.
YMMV.
It's raining and cold, which is always hard on Doo's :? :annoyed :oops:
Rev90517; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax 25%. Early SS. FundRatio (FR) >1.1 67/70yo

snarlyjack
Posts: 500
Joined: Fri Aug 28, 2015 12:44 pm
Location: Montana

Re: How Do You Like My New 'Doo

Post by snarlyjack » Wed Nov 08, 2017 8:15 pm

Nedsaid,

I think your a awesome investor & very motivational
and I've learned a lot from you.

My favorite investor, Ronald Read (The Janitor Next-door)
never ever sold anything. Their must be something to the
strategy of "do your best when buying" then never sell.

I know your going to end up a millionaire before this is
all said & done. I think your doing great & thank you for
sharing. Onward & upward...were on our way to a million.

User avatar
nedsaid
Posts: 8831
Joined: Fri Nov 23, 2012 12:33 pm

Re: How Do You Like My New 'Doo

Post by nedsaid » Thu Nov 09, 2017 1:00 am

Snarly Jack,

This New 'Doo thread is a way that I can personally track the progress of my own portfolio. It also is a running commentary of what I am doing as an investor. Hopefully, this will be a tool for others to learn. One thing that they will learn is that I have made a lot of mistakes.

On this thread, I teach investors how to use the Morningstar X-Ray and the Stock Stylebox so that they can see what they really own. How much US Stocks, how much International Stocks, how much in Bonds, and how much in Cash. How to check the maturity and credit quality of their bonds with the Bond Stylebox. I also talk about how different asset classes are performing in comparison to each other. Finally, I tried and failed to teach investors how to calculate their returns.

It is also a way of confessing my investing sins. Writing this stuff down also clarifies my thinking about my portfolio and my strategies. I also admit that my returns weren't always what I had expected. I have posted my Investment Policy Statement in the past and perhaps I will repost it here in the future with commentary on how closely I have actually followed my written plan. So it is all here: the good, the bad, and the ugly.
A fool and his money are good for business.

User avatar
nedsaid
Posts: 8831
Joined: Fri Nov 23, 2012 12:33 pm

Re: How Do You Like My New 'Doo

Post by nedsaid » Thu Nov 09, 2017 1:16 am

triceratop wrote:
Wed Nov 08, 2017 5:42 pm

With ongoing contributions you need XIRR type capabilities. Anyway, if you can't produce correlations to the factors it probably isn't worth pursuing this much; it is just a question I had, and something to keep in mind when determining whether you have beaten the market.
In another thread, in an answer to a Garland Whizzer post, I posted extensively on my attempt to invest in factors and reported on how well I think I did. I will give a shorter answer here.

Post 2007-2008 financial crisis, I would probably have been better off with a Taylor Larimore 3-Fund portfolio. We have been in a Large Cap Growth phase of the market since then and that does not help the Small/Value tilters. I didn't Small Value tilt in earnest until just before the financial crisis and my tilts may have actually deepened my losses a bit though it might have helped my portfolio to bounce back a little quicker.

My earnings/price momentum funds had a good run from 2002-2007. Value had a great run from 2000-2007. Though I did not have much in the way of Small Value, I owned a lot of Large Value and that helped me. International Stock funds did well compared to the US from 2000-2007. REITs also did well during that time period. Bonds did great throughout the 2000's. So before the financial crisis, I was the man. My favorite Mid-Cap Growth fund American Century Heritage had a great run.

After the financial crisis, Value lagged, earnings/price momentum lagged, and International Stocks lagged. What worked from 2000-2007 has worked much less well from 2008-2017.

So you can see my disappointment as I calculated, or attempted to calculate my returns. Two of my very favorite funds: American Century Heritage and American Century Value have lost their luster. As I compare my returns to a simple three fund portfolio, I can't hide my disappointment. Pretty much, I am a legend in my own mind. Don't worry, Large Value will be back and with a vengeance. Those earnings/price momentum funds are having a great 2017 and maybe will make up lost ground. I can only hope.
A fool and his money are good for business.

User avatar
nedsaid
Posts: 8831
Joined: Fri Nov 23, 2012 12:33 pm

Re: How Do You Like My New 'Doo

Post by nedsaid » Thu Nov 09, 2017 1:19 am

itstoomuch wrote:
Wed Nov 08, 2017 5:47 pm
Don't get too greedy. :P
One of my holdings really popped today, I fat fingered a sell of all shares (intended just 100) and then the company proceed to gain another 4 points.
It's OK since I wanted to be holding a lot of cash going forward. Made my 2017 goal of +10% Discretionary.
YMMV.
It's raining and cold, which is always hard on Doo's :? :annoyed :oops:
Well, I keep hitting the "sell" button, selling US Stocks as the markets advance. The program of mild rebalancing from stocks to bonds that I keep writing about. I probably should actually start the process of de-risking, going from 69% stocks to 67% stocks will hardly move the needle.

Good for you on your gains.
A fool and his money are good for business.

User avatar
TD2626
Posts: 586
Joined: Thu Mar 16, 2017 3:40 pm

Re: How Do You Like My New 'Doo

Post by TD2626 » Thu Nov 09, 2017 1:55 am

This thread is quite unique and interesting. Impressive amount of analysis. This sort of checking to see what performance truly was is the kind of thing any investor needs to do to keep themselves honest and know how they did.

Is there anything you would have done differently if you were starting over again?

User avatar
nedsaid
Posts: 8831
Joined: Fri Nov 23, 2012 12:33 pm

Re: How Do You Like My New 'Doo

Post by nedsaid » Thu Nov 09, 2017 5:43 pm

TD2626 wrote:
Thu Nov 09, 2017 1:55 am
This thread is quite unique and interesting. Impressive amount of analysis. This sort of checking to see what performance truly was is the kind of thing any investor needs to do to keep themselves honest and know how they did.

Is there anything you would have done differently if you were starting over again?
Well, hard to say. The 1980's were a different era, I was an avid watcher of Wall $treet Week with Louis Rukeyser and a lot of emphasis on the show was with individual stocks. So once I had a brokerage account, I bought my first stock, AST Research, and it was off to the races. That was back in 1988. My first mutual fund, Twentieth Century Select, was purchased on July 16, 1984. The fund company had no minimum investment and that was a good match for someone with no money.

Vanguard was around in those days, and John Bogle was a guest on Wall $treet Week. I also was heavily influenced by Bob Brinker and his Money Talk program. The 1980's and 1990's were about individual stocks and no-load mutual funds for me. Brinker did also talk about indexing. He had active/passive portfolios. Money magazine and Kiplinger's were also influences and they had a lot of articles about stock picking. I didn't start indexing until 1995 and then made a bigger commitment to indexing when I started a new job in March 1999.

With the end of the High Tech and Internet bubble of the late 1990's and the subsequent bear market, the financial press and individuals lost interest in stock picking. The 1990's was the era of do-it-yourself investors and no-load mutual funds, it was ironic that after the bubble burst many of these same investors rushed to financial advisors and loaded mutual funds. A lot of no-load fund groups sold out and became load fund groups. Amazing how people transitioned so quickly.

So the answer is probably no. I came up in a different era. I suppose if I started my career in the 2000's, I would probably be an index guy all the way. I might also have sought out a DFA Advisor.
A fool and his money are good for business.

snarlyjack
Posts: 500
Joined: Fri Aug 28, 2015 12:44 pm
Location: Montana

Re: How Do You Like My New 'Doo

Post by snarlyjack » Thu Nov 09, 2017 8:43 pm

Nedsaid,

That's interesting...My how things have changed.

My 401K has 1 fund (no load/company match).
My IRA (Vanguard) 1 fund (no load/low er).
My Brokerage Account (Vanguard) 2 funds (no load/low er).
Total 4 funds. All no loads with fairly low er's.
My goal has been to optimize & be super efficient.

Different times, Different Generation's. All funds have
been through the portfolio visualizer + other computer programs,
and optimized as much as possible.

I guess it's a brave new world...but it's still the same old stock market.
Jack Bogle caught me at the perfect time & all the stars lined up.
And I still think your great...

Post Reply