madsinger monthly report (March 2015)

[madsinger]

Here is a big fat collection of portfolios, with their March 2015 returns, 2015 YTD return, and annualized returns since 1999, 2005, 2010 and 2012 (16 years 3 months, 10 years 3 months, 5 years 3 months, 3 years 3 months). 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 50/6/11/33 stock/REIT/Gold/bond. The madsingerPP portfolio is the "permanent portfolio" portion of my portfolio consisting of 25% each of stock, long bond, cash, gold.

-Brad.

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                                     CAGR     CAGR    CAGR    CAGR
                    Mar     YTD      since    since   since   since
                    2015    2015     2012     2010    2005    1999
Hot Hands          -0.94%   1.85%   18.33%   14.59%   7.72%  12.06%
Sheltered Sam      -0.87%   2.14%   15.97%   12.44%   7.55%   7.71%
VFINX              -1.60%   0.91%   18.86%   14.70%   7.46%   5.10%
                  
Newsletter G        0.10%   3.80%   19.12%   14.01%   8.87%   9.86%
Newsletter G-IND   -0.10%   3.60%   18.14%   14.51%   8.70%   6.74%
s&d                -0.19%   3.02%   13.52%   10.73%   7.28%   7.64%
3 fund             -0.91%   2.41%   13.30%   10.11%   6.96%   5.88%
LS G               -0.83%   2.33%   13.76%   10.75%   6.30%   5.27%

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Newsletter CG      -0.10%   3.30%   17.28%   13.00%   8.13%   8.15%
Wellington         -0.97%   0.85%   13.10%   10.87%   7.86%   7.54%
coffeehouse         0.10%   2.37%   11.81%   10.41%   7.13%   7.39%
STAR               -0.44%   2.60%   12.74%   10.16%   6.93%   6.84%
LS MG              -0.49%   2.20%   11.08%    9.34%   6.00%   5.37%
                  
Wellesley          -0.10%   1.27%    8.80%    9.31%   7.15%   6.99%
Newsletter Inc     -0.29%   2.40%   13.39%   11.35%   6.91%   5.97%
LS CG              -0.10%   2.07%    8.41%    7.62%   5.39%   5.17%
                  
madsinger          -0.24%   2.09%   11.31%    9.69%   6.82%   
madsinger PP       -0.68%   1.22%            

[madsinger]

Mixed month. Large US stocks down about -1.5%, small cap up about +1.2%. International in line with US Large. Bonds up for the month.

In the "specials", REIT up +1.72%, precious metals and mining fund down -9.13%.

My permanent portfolio sub-portfolio data:

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           STOCK     LONG BOND   CASH     GOLD   PORTFOLIO 
January   -3.14%       9.37%     0.08%    8.37%    3.40%
February   5.68%      -5.65%     0.08%   -5.79%   -1.43%
March     -1.61%       1.13%     0.08%   -2.22%   -0.67%

YTD        0.58%       4.76%     0.24%   -0.63%    1.22%

[John Z]

Thanks again Brad.
BTW, I only check/look at my portfolio once a quarter so to save you some time you could do this quarterly.
Again, appreciate the effort.
John

[investor]

thanks Brad.
I vote to continue monthly.

investor

[cosimdm]

What is "hot hands?

[madsinger]

What is "hot hands?

The "Hot Hand" strategy is not a portfolio, but rather a single fund. The idea is that a fund that did well one year may exhibit good returns the next. The basic strategy is to rank all "diversified" Vanguard Mutual funds by one-year return, and to select the best one and hold it for a year. There was a stretch from 2004-2007 when the "International Explorer" fund was the top fund four years in a row (which led to very gaudy returns).

It's on this chart because about 10 years ago when I started doing this, someone wanted to see how this "strategy" worked against others. It has done well over the long term, but it has suffered some rather harsh years. In 2008, the fund that year fell about -48%.

-Brad.

[gkaplan]

As of March 31, 2015, my year-to-date return is 1.99%. My annualized quarterly, one-year, three-year, five-year, and ten-year rates of return are 8.31%, 3.59%, 7.30%, 6.98%, and 6.50%, respectively.

My best performing fund year-to-date has been the Vanguard Pacific Stock Index Fund Admiral Shares, with a year-to-date return of 8.10%. My annualized quarterly, one-year, and three-year rates of return are 37.12%, 7.93%, and 8.84%, respectively.

My worst fund year-to-date has been the Vanguard Value Index Fund Admiral Shares, with a year-to-date return -0.57%. My annualized quarterly, one-year, three-year, and five-year rates of return are -2.27%, 10.40%, 16.62%, and 13.79%, respectively.

My overall target allocation is 60/40 Equity/Fixed Income. Specifically, my target allocations are as follows:

12.00%: Domestic Large-Cap Value
12.00%: Domestic Small-Cap Value
06.00%: Foreign Markets Large – Developed – Europe
06.00%: Foreign Markets Large – Developed – Pacific
12.00%: Foreign Markets Small – Developed and Emerging
12.00%: Foreign Markets Large – Emerging
40.00%: Fixed Income

As of March 31, 2015, my equity/fixed Income allocation is split 60/40. Specifically, my current allocations are as follows.

11.94%: Domestic Large-Cap Value (VVIAX)
12.00%: Domestic Small-Cap Value (VSIAX)
05.92%: Foreign Markets Large – Developed – Europe (VEUSX)
05.93%: Foreign Markets Large – Developed – Pacific (VPADX)
12.00%: Foreign Markets Small – Developed and Emerging (VFSVX)
12.06%: Foreign Markets Large – Emerging (VEMAX)
08.88%: Fixed Income – TIPS (VAIPX)
31.34%: Fixed Income – TSP (G Fund)

(Totals do not add up to 100% because of rounding.)

Submitted for your approval.

[LPSpecial]

Brad,

Thank you for continuing this work. I always look forward to your monthly report. It is a great reminder that my portfolio doesn't need to be complex.

Kind regards,

LPSpecial

[cosimdm]

Thank you for explaining "hot hands". I really look forward to your monthly reports. Keep up the good work!