madsinger monthly report (December 2012)

[madsinger]

Here is a big fat collection of portfolios, with their December 2012 returns, 2012 YTD return, and annualized returns since 1999, 2003, 2008 and 2010 (14 years, 10 years, 5 years, 3 years). I broke them into four categories, roughly corresponding to 100/0, 80/20, 60/40, 40/60 stock/bond portfolios, sorted by 10 year Total Return. The 3 fund is 50/30/20 Total Stock/Total Int'l/Total Bond. The s&d is 10 each of VFINX, VIVAX, NAESX, VISVX, VGSIX, 25 VGTSX, 5 VINEX, 20 VBMFX. The coffeehouse is a 60/40 described at The Coffeehouse Investor. The Newsletter portfolios are from a newsletter following Vanguard funds. William Bernstein's "Sheltered Sam" is an all stock portfolio which is 20% VFINX, 25% VIVAX, 5% NAESX, 15% VISVX, 10% VGSIX, 3% VGPMX, 5% each VEURX, VPACX, VEIEX, and 7% VTRIX. The madsinger portfolio is my real-world portfolio, roughly 61/5/3/31 stock/REIT/PM/bond.

Code: Select all

                                    CAGR    CAGR    CAGR    CAGR
                   Dec      YTD     since   since   since   since
                   2012     2012    2010    2008    2003    1999
Hot Hands          0.54%   13.49%  10.32%  -3.15%  10.36%  10.75%
Sheltered Sam      2.76%   16.12%   9.92%   1.50%   9.37%   6.45%
VFINX              0.90%   15.82%  10.71%   1.57%   6.98%   2.85%
                  
s&d                2.52%   14.74%   9.07%   2.84%   9.24%   6.80%
Newsletter G       1.24%   14.30%   8.81%   1.30%   8.98%   8.12%
Newsletter G-IND   1.23%   14.80%  10.79%   1.57%   8.77%   4.79%
3 fund             1.84%   14.38%   8.11%   2.06%   8.27%   4.80%
LS G               1.63%   14.38%   8.75%   1.07%   7.36%   4.00%

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coffeehouse        1.69%   11.93%   9.40%   4.67%   8.29%   6.70%
Wellington         0.79%   12.57%   9.05%   4.25%   8.20%   6.64%
Newsletter CG      1.34%   13.80%   8.78%   1.99%   8.20%   6.52%
STAR               1.44%   13.79%   8.60%   3.67%   7.68%   5.99%
LS MG              1.16%   11.76%   8.28%   2.35%   6.93%   4.53%
                  
Wellesley          0.19%   10.06%  10.11%   6.91%   7.20%   6.79%
Newsletter Inc     0.81%   11.50%   9.23%   3.81%   6.62%   4.70%
LS CG              0.68%    9.19%   7.29%   3.07%   6.12%   4.71%
                  
madsinger          1.68%   11.59%   8.58%   2.94%      

[madsinger]

I'm a little late to the "post your returns for 2012" game, but here is my monthly report.

The charts show the 1, 3, 5, and 10 year returns. These have been "ka-chunked" up from last month, where the 3 year 11 month, 5 year 11 month, etc. returns were shown. This has shifted the returns somewhat as 2009 is no longer on the "3 year" column, 2007 is no longer on the 5 year column, etc.

Internationals were up BIG last month, and bonds were flat to lower. The portfolios reflect this pretty well.

Interesting (well, maybe to me...) that the "80/20" portfolios were all within 0.5% of each other (14.3% to 14.8%)

The madsinger relatively poor showing seems to be due to any holdings in precious metals (down double digit this year) and my entire bond holding in short term bond index, which has rather dramatically trailed the broader "bond market" in the past one and three years. I'm comfortable with this, as I want this portion of my portfolio to be pretty stable, and less for returns.

I hope 2012 was good to all of you. 2013 seems to be off to the races!

-Brad.

[bschultheis]

Thanks Brad, and all the best to you in 2013.

Go Coffeehouse!

Bill

[BobSail]

Brad,

Thanks again for all your work collecting this data. i have a special "Madsinger" tab on my excel spreadsheet to graph your results for a few benchmarks, including your portfolio.

I've been hearing your comments about lagging some of the indices, and everytime I see this chart, I think of you!
It's a fairly busy chart showing the indices I track since Jan 2011 and one thing will pop out.......that poor precious metals and mining index, but fortunately it appears to be working its way back onto the chart after disappearing beneath it for a while......Good luck!

[Robert T]

.
Thanks Brad,

FWIW - here’s an update on the performance of the portfolios from the ’Who’s the Fairest of Them All’ thread. I have included several others such as:

• Greenblaat – with the increased attention on quality/profitability/return on equity (here’s one discussion on this)
  Permanent portfolio – one of the portfolio combinations from the Permanent Portfolio book
  Momentum – based on Cliff Asness funds

Details of each portfolio are in this M* link - set-up and tracked for (my) education.

All are expected to have an average stock:bond allocation of about 75:25 over the long-term.

• Asset Allocation portfolios: the ETF and DFA TM portfolios have similar expected long-term return, as do the RAFI and DFA Vector/Core portfolios (although DFA portfolios have slightly higher expected return if account for higher betas).
  Security Selection portfolios: range from highly concentrated (6 to 11 stock in the Cummings-Ackment-Lampert and Fairholme portfolios respectively), to more diversified (100 to 500 stocks in the Dodge and Cox, IVA, and Multiple Managers portfolios).
  Market Timing portfolios: – various marketing timing strategies extensively discusses – moving average, inverted yield curve, forecasts, momentum.

There was fairly good performance over the last three years by the Permanent Portfolio, the one based on GMO 7-yr forecasts, and the highly concentrated portfolio of Cumming-Ackman-Lampert (top 2 stock holdings of each of these three hedge fund managers). The ETF and DFA TM portfolios have very similar size and value exposure and had almost the same return (13.3 vs. 13.1 respectively) since inception on 11-06-08 (DFA portfolio has slightly higher beta exposure).

• 

My portfolio is similar to the ETF portfolio. It has also now been 10 years with the same portfolio targets (factor loads, intl allocation). Personal return has been:

• 1 year return = 14.6%
  10 year return = 10.1%

May give a 10 year retrospective sometime – looking at sources of returns (with 10 year returns higher than all but the ‘Hot Hands’ portfolio in your list).

Robert
.

[gkaplan]

As of December 31, 2012, my year-to-date return is 12.30%. My annualized quarterly, one-year, three-year, and five-year rates of return are as follows: 12.51%, 12.30%, 7.34%, and 2.98%, respectively.

My best fund year-to-date has been the Vanguard European Stock Index Fund Admiral Shares, with a year-to-date return of 20.99%. My annualized quarterly and one-year rates of return are 34.58%, and 20.99%, respectively.

My worst performing fund year-to-date has been the TSP G Fund, with a year-to-date return of 1.47%. My annualized quarterly, one-year, three-year, and five-year rates are as follows: 1.38%, 1.47%, 2.19%, and 2.52%, respectively.

My worst performing equity fund year-to-date has been the Vanguard Value Index Fund Admiral Shares, with a year-to-date return of 15.25%. My annualized quarterly, one-year, and three-year rates of return are 3.53%, 15.25, and 10.01%, respectively.

My retirement portfolio currently is divided among the following two investment vehicles:

68.21%: Vanguard Roth IRA (My year-to-date return is 17.93%. My annualized quarterly, one-year, three-year, and five-year returns are 18.16%, 17.93%, 9.32%, and 4.03%, respectively).

31.79%: Thrift Savings Plan (My year-to-date return is 1.47%. My annualized quarterly, one-year, three-year, and five-year returns are 1.38%, 1.47, 2.19%, and -0.01%, respectively).

My target allocation is 72/28 Equity/Fixed Income. Specifically, my target allocations are as follows:

12%: Domestic Large-Cap Value
12%: Domestic Small-Cap Value
12%: Domestic REIT
06%: Foreign Markets Large – Developed – Europe
06%: Foreign Markets Large – Developed – Pacific
12%: Foreign Markets Small – Developed and Emerging
12%: Foreign Markets Large – Emerging
28%: Fixed Income

As of December 31, 2012, my equity/fixed Income allocation is split 68/32. Specifically, my current allocations are as follows.

11.24%: Domestic Large-Cap Value (VIVAX)
11.11%: Domestic Small-Cap Value (VSIAX)
12.79%: Domestic REIT (VGSLX)
05.18%: Foreign Markets Large – Developed – Europe (VEUSX)
05.95%: Foreign Markets Large – Developed – Pacific (VPADX)
10.38%: Foreign Markets Small – Developed and Emerging (VEMAX)
11.46%: Foreign Markets Large – Emerging (VEMAX)
31.79%: Fixed Income (TSP G Fund)


Submitted for your approval.

[livesoft]

madsinger, thanks for keeping these monthly threads going. I appreciate it. I linked the following chart in the 2012 returns thread. It fits in this thread as well.

Below is a graph of some reported 2012 returns versus equity:fixed_income asset allocation of some benchmarks which include Vanguard Target Retirement fund, Fidelity Freedom funds, Vanguard Wellingon & Wellesley, and some small-cap and value-tilted DFA portfolios.

[Bacchus01]

Re: the note on mining and metals from above being poor.

I am in the mining business. It has really stunk for the last 6-8 months after coming off a rapid acceleration cycle in 2010 and 2011. First half of 2013 will continue to be rough, but the back half of 2013 and into 2014 looks a lot better. It is very highly correlated to China's GDP.

[madsinger]

Thank you for for your contributions to this thread! I like reading all of your posts.

For those keeping track, I had made a small error in my XIRR calculations (I had entered 12/31/2013 instead of 12/31/2102 in my spreadsheet) which affected my return slightly (up to 11.59% from 11.51%) and the subsequent 3, and 5 year calculations. (I'm kind of surprised that this date error resulted in such a small change...)

I did rebalance my portfolio yesterday, so my bond allocation is now up to 32% from the (target) 31% (even though it was down to about 29% by the end of the year).

Thank you Bacchus01 for the information. I will not panic in the first half of the year if my PM keeps diving! I did rebalance into my PM fund pretty heavily last August when it had dropped so much (and was therefore about 25% under my AA target for this fund).

-Brad.

[investor]

Thanks Brad, Always enjoy your monthly posts. Also still a strong fan of Wellington and Wellesley and sleeping well

investor