madsinger monthly report (September 2016)

[madsinger]

Here is a big fat collection of portfolios, with their September 2016 returns, 2016 YTD return, and annualized returns since 1999, 2006, 2011 and 2013 (17 years 9 months, 10 years 9 months, 5 years 9 months, 3 years 9 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
                    Sep     YTD     since   since   since   since
                    2016    2016    2013    2011    2006    1999
VFINX               0.01%   7.73%  12.82%  12.14%   7.41%   5.12%
Sheltered Sam       0.36%  11.47%  10.05%   9.25%   6.74%   7.39%
Hot Hands           2.84%   2.48%  11.27%   9.97%   5.65%  11.08%
                  
Newsletter G        0.37%   7.30%  12.53%  11.03%   7.83%   9.28%
Newsletter G-IND   -0.27%   8.90%  11.62%  10.69%   7.58%   6.42%
s&d                 0.28%   8.25%   7.94%   7.62%   6.43%   7.20%
3 fund              0.46%   7.24%   7.79%   7.51%   6.20%   5.57%
LS G                0.52%   7.51%   8.21%   7.83%   5.71%   5.03%

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Wellington         -0.13%   7.60%   8.87%   9.15%   7.47%   7.28%
Newsletter CG       0.66%   7.50%  11.40%  10.61%   7.41%   7.75%
coffeehouse        -0.07%   8.30%   7.55%   7.76%   6.65%   7.02%
STAR                0.53%   7.12%   7.68%   7.93%   6.30%   6.49%
LS MG               0.37%   7.29%   6.92%   6.96%   5.59%   5.16%
                  
Wellesley          -0.31%   8.77%   6.63%   8.14%   7.30%   6.88%
Newsletter Inc      0.28%   6.60%   9.18%   9.41%   6.57%   5.80%
LS CG               0.27%   7.05%   5.55%   5.83%   5.16%   4.99%
                  
madsinger           0.29%  10.25%   7.29%   6.76%   6.11%   
madsinger PP       -0.13%  11.53%            

[madsinger]

Better late than never? This was a busy week for me, sorry for the delay in posting.

Not too many swings this month. US stocks mostly flat, between -0.5% and +0.5% returns. Bonds a little lower. Internationals had a better month, up between +1.5% to 2.5%. A little more swing in the sectors, Precious metals up +5.7%, REITs down -1.8%.

The permanent portfolio was about flat...US stocks and cash basically flat, long bonds down -1.3% and gold up +0.7%.

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           STOCK  LONG BOND  CASH    GOLD   PORTFOLIO 
January   -4.97%   5.24%     0.09%   5.38%   1.25%
February  -0.18%   3.20%     0.08%  11.22%   3.47%
March      6.72%   0.06%     0.09%  -0.92%   1.45%
April      0.37%  -0.62%     0.09%   5.05%   1.27%
May        1.75%   0.77%     0.10%  -6.09%  -0.97%
June       0.22%   6.50%     0.08%   8.87%   3.83%
July       3.65%   2.02%     0.09%   2.04%   1.98%
August     0.08%  -0.99%     0.09%  -3.23%  -1.02%
September -0.02%  -1.31%     0.08%   0.71%  -0.11%
               
YTD        7.46%  16.18%     0.80%  24.05%  11.53%

[pennstater2005]

Thank you, as usual! Always look forward to your report. LS G still chugging along.

[investor]

Thanks Brad....my Wellington and Welesley funds still lucky year after year after year after year.......

investor

[gkaplan]

As of September 30, 2016, my year-to-date return is 7.33%. My annualized quarterly, one-year, three-year, five-year, and ten-year rates of return are 17.74%, 9.55%, 4.25%, 7.95%, and 4.89%, respectively.

My best performing fund year-to-date has been the Vanguard Emerging Markets Stock Index Fund Admiral Shares, with a year-to-date return of 16.23%. My annualized quarterly, one-year, three-year, and five-year rates of return are 34.65%, 15.93%, 1.77%, and 4.02 %, respectively.

My worst fund year-to-date has been the Vanguard European Stock Index Fund Admiral Shares, with a year-to-date return of 1.06%. My annualized quarterly, one-year, three-year, and five-year rates of return are 22.38%, 3.24%, 0.88%, and 8.82%, respectively.

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

10.00%: Domestic Large-Cap Value
10.00%: Domestic Small-Cap Value
06.00%: Foreign Markets Large – Developed – Europe
06.00%: Foreign Markets Large – Developed – Pacific
14.00%: Foreign Markets Small – Developed and Emerging
14.00%: Foreign Markets Large – Emerging
40.00%: Fixed Income

As of September 30, 2016, my equity/fixed Income allocation is split 60/40. Specifically, my current allocations are as follows.

10.00%: Domestic Large-Cap Value (VVIAX)
10.29%: Domestic Small-Cap Value (VSIAX)
06.14%: Foreign Markets Large – Developed – Europe (VEUSX)
06.27%: Foreign Markets Large – Developed – Pacific (VPADX)
14.47%: Foreign Markets Small – Developed and Emerging (VFSVX)
15.07%: Foreign Markets Large and Small – Emerging (VEMAX)
05.59%: Fixed Income – TIPS (VAIPX)
28.93%: Fixed Income – TSP (G Fund)
03.26%: Fixed Income – Credit Union Money Market Fund

(The totals do not add to 100% because of rounding.)

[triceratop]

^gkaplan: why do you hold the much more expensive VFSVX when you could use VSS? Retirement plan restrictions?

[gkaplan]

^gkaplan: why do you hold the much more expensive VFSVX when you could use VSS? Retirement plan restrictions?

I'm not interested in ETFs, and I don't want to open a brokerage account. Eventually, Vanguard will create an Admiral Shares class for this fund.

[triceratop]

^gkaplan: why do you hold the much more expensive VFSVX when you could use VSS? Retirement plan restrictions?

I'm not interested in ETFs, and I don't want to open a brokerage account. Eventually, Vanguard will create an Admiral Shares class for this fund.

You might be in for a long wait. I asked Vanguard about this a few months ago and they said there were no plans in the short- to intermediate-term to introduce an admiral share class. I'm not saying I'm unsympathetic: I'd prefer to hold all mutual funds too; just want you to be well-informed on this topic.

[gkaplan]

^gkaplan: why do you hold the much more expensive VFSVX when you could use VSS? Retirement plan restrictions?

I'm not interested in ETFs, and I don't want to open a brokerage account. Eventually, Vanguard will create an Admiral Shares class for this fund.

You might be in for a long wait. I asked Vanguard about this a few months ago and they said there were no plans in the short- to intermediate-term to introduce an admiral share class. I'm not saying I'm unsympathetic: I'd prefer to hold all mutual funds too; just want you to be well-informed on this topic.

I am a patient fellow.

[bengal22]

Thanks for your report, madsinger.

I think if one tilts it is important to benchmark your performance. I have a typical 3 fund portfolio with a tilt with small cap value and reit. I compare my performance with the coffeehouse and 3 fund, as well as the VG Target Funds of 2015 and 2020 to get some idea of the difference. At the end of the day, the biggest contributor to the size of my portfolio is salary/asset allocation.