madsinger monthly report (February 2017)

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madsinger
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madsinger monthly report (February 2017)

Post by madsinger »

Here is a big fat collection of portfolios, with their February 2017 returns, 2017 YTD return, and annualized returns since 1999, 2007, 2012 and 2014 (18 years 2 months, 10 years 2 months, 5 years 2 months, 3 years 2 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.

Code: Select all

                                    CAGR    CAGR    CAGR    CAGR
                    Feb     YTD     since   since   since   since
                    2017    2017    2014    2012    2007    1999
VFINX               3.97%   5.92%  10.23%  15.27%   7.32%   5.54%
Sheltered Sam       2.67%   4.76%   8.07%  12.64%   5.79%   7.65%
Hot Hands           2.05%   2.72%   1.81%  11.17%   3.10%  10.72%
                  
Newsletter G        3.31%   6.10%   8.84%  14.42%   7.36%   9.54%
Newsletter G-IND    3.23%   5.50%   8.65%  13.81%   7.33%   6.74%
3 fund              2.44%   4.67%   5.58%  10.05%   5.53%   5.76%
s&d                 2.14%   3.89%   6.13%  10.15%   5.45%   7.32%
LS G                2.41%   4.61%   5.94%  10.36%   5.04%   5.22%

Code: Select all

Wellington          2.67%   3.61%   7.68%  10.85%   7.15%   7.50%
Newsletter CG       3.22%   5.70%   8.61%  13.29%   7.09%   8.01%
coffeehouse         1.96%   2.95%   6.49%   9.08%   5.98%   7.09%
STAR                2.12%   4.27%   5.67%   9.47%   5.90%   6.55%
LS MG               2.00%   3.64%   5.42%   8.44%   4.98%   5.24%
                  
Wellesley           1.96%   2.24%   6.19%   7.51%   6.78%   6.81%
Newsletter Inc      3.14%   5.10%   7.73%  10.49%   6.40%   5.94%
LS CG               1.12%   2.60%   4.80%   6.46%   4.57%   4.96%
                  
madsinger           1.98%   3.70%   5.13%   8.65%   5.20%   
madsinger PP        2.16%   4.13%            
Last edited by madsinger on Thu Mar 02, 2017 10:45 am, edited 1 time in total.
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madsinger
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Re: madsinger monthly report (February 2017)

Post by madsinger »

Strong month for stocks. Positive month for everything in the charts except Vanguard Precious Metals, down over -4%. Gold itself rose for the month.

The madsinger Permanent portfolio performed well, and so for this year (two months...) each of the four asset classes have risen each month. That isn't really expected in a PP, but I'll take it!

Code: Select all

         STOCK  LONG BOND   CASH    GOLD  PORTFOLIO 
January  1.85%    0.65%     0.08%   5.32%   1.93%
February 3.92%    1.57%     0.08%   3.17%   2.16%
               
YTD      5.85%    2.24%     0.16%   8.66%   4.13%
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unclescrooge
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Re: madsinger monthly report (February 2017)

Post by unclescrooge »

Is this a static portfolio with no changes to the asset allocation, and no new contributions/distributions?
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madsinger
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Re: madsinger monthly report (February 2017)

Post by madsinger »

unclescrooge wrote:Is this a static portfolio with no changes to the asset allocation, and no new contributions/distributions?
For the portfolios in the chart, I set the percentages at the beginning of the year. For the next 12 months, it's on autopilot, no buys or sells. At the end of the year, it rebalances back to the original.

For the "madsinger" and "madsinger PP" portfolios, these are my real world portfolios with additions with each paycheck, and an occasional add or subtract as my needs call for it. I occasionally rebalance these real world portfolios when they go outside of some range. The last rebalance of anything occurred in December when I sold some US stock for the long term bonds.

-Brad.
LPSpecial
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Re: madsinger monthly report (February 2017)

Post by LPSpecial »

Thank you for providing this service. I always look forward to your reports.

LPSpecial :happy
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Portfolio7
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Re: madsinger monthly report (February 2017)

Post by Portfolio7 »

LPSpecial wrote:Thank you for providing this service. I always look forward to your reports.

LPSpecial :happy
+1
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Re: madsinger monthly report (February 2017)

Post by investor »

ditto the +1

Thanks Brad.

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Johnnie
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Re: madsinger monthly report (February 2017)

Post by Johnnie »

Fairly new to the forum and first time looking at this.

Question: Are these 100% equity portfolios or do they include bonds? If they do, are they the same kind of bonds, and the same proportion of total A/A?

If the answer is "Different proportions of different kinds of bonds in each portfolio" then this is not an apples-to-apples comparison, and I'm wondering what value does it add?

IOW, how do I know whether the equity mix is good or bad in any one of them if I'm comparing it against portfolios with more or less bonds, with different average duration and quality?

My consciousness was raised by a Paul Farrell portfolio comparison that has been posted in various threads at various times to "prove" some point - but it proves nothing because the portfolios all have different bond allocations.
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ResearchMed
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Re: madsinger monthly report (February 2017)

Post by ResearchMed »

Johnnie wrote:Fairly new to the forum and first time looking at this.

Question: Are these 100% equity portfolios or do they include bonds? If they do, are they the same kind of bonds, and the same proportion of total A/A?

If the answer is "Different proportions of different kinds of bonds in each portfolio" then this is not an apples-to-apples comparison, and I'm wondering what value does it add?

IOW, how do I know whether the equity mix is good or bad in any one of them if I'm comparing it against portfolios with more or less bonds, with different average duration and quality?

My consciousness was raised by a Paul Farrell portfolio comparison that has been posted in various threads at various times to "prove" some point - but it proves nothing because the portfolios all have different bond allocations.
As madsinger wrote in his intro paragraph:

"...I broke them into four categories, roughly corresponding to 100/0, 80/20, 60/40, 40/60 stock/bond portfolios..."

RM
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slvrvet
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Re: madsinger monthly report (February 2017)

Post by slvrvet »

I am somewhat new to investing and as I look at the madsinger monthly report it looks to me like an easy and preferable strategy would be to just buy VFINX since it beat all the other portfolios in the short term and more importantly in the long term. I am sure if maximum drawdowns were shown there would be some big ones but buying and holding and not selling in a drawdown seems like the easiest and simplest strategy. What am I missing?
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Re: madsinger monthly report (February 2017)

Post by madsinger »

slvrvet wrote:I am somewhat new to investing and as I look at the madsinger monthly report it looks to me like an easy and preferable strategy would be to just buy VFINX since it beat all the other portfolios in the short term and more importantly in the long term. I am sure if maximum drawdowns were shown there would be some big ones but buying and holding and not selling in a drawdown seems like the easiest and simplest strategy. What am I missing?
There is no single "correct" investment portfolio. Author and adviser Larry Swedroe encourages investors to look at their 1-need, 2-ability, and 3-willingness to take risk and to develop an asset allocation that is consistent with these three properties. The need is the necessity to take any risk with your money --- if you have $10 million in the bank, and can live comfortably "risk free" interest, there is no "need" to take risk. If you are young, and have good earnings prospects, you have the ability to take risk. If you are retired, or are not able to earn a livable wage, then your ability to take risk is diminished. If you can accept the inevitable swings in the stock market without losing sleep or health over them, then you are willing to take risk...but if any fluctuation makes you sick and nervous, you're not willing.

Only after answering these questions, can you then determine good portfolio allocation for yourself. If you have decided that you "need" to take risk (i.e. your savings and risk-free interest will not be sufficient to meet your financial goals), you're able to take risk (a drop in portfolio value will not become a financial hardship), and you're willing to take risk (you're comfortable with the chance that your portfolio may get cut in half), and that a 100% stock portfolio is right for you, then ... (finally, answering your question!) ...

...a 100% investment in VFINX may be a good choice for you.

But, one shouldn't look at this chart in a vacuum. It depends on your personal situation. Also, you are looking at a period of time where VFINX has done very well compared with other investments. The late 1990's was a similar stretch, where the S&P 500 outpaced everything. From 2000-2002, it basically trailed everything, and very few people would have looked at VFINX as a good choice for a complete portfolio.

-Brad.
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Re: madsinger monthly report (February 2017)

Post by madsinger »

Rebalance update:

For those following the madsinger portfolio to see how a real-world portfolio behaves, I wanted to let you know that yesterday I rebalanced by selling some Total Internaional Stock fund and buying my Short Term bond fund.

And to update my last rebalance effort, against my gut and in keeping with my AA plan, i sold Small Cap Value and bought Long Term bonds in December. Since then, Small Cap value, down -2.06%, Long Term Treasury fund, up +2.39%. While this may not last, it was nice that the market didn't immediately punish me for this move!

Happy investing!

-Brad.
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Re: madsinger monthly report (February 2017)

Post by livesoft »

I was just looking at some morningstar charts this a.m. Remember what was going to happen to bonds? They dropped and they recovered. Folks were told when to buy.

VBTLX Total bond index
VBR small-cap value
VSS small-cap foreign
VCSH short-term corporate bond

Image

That's about a 5% difference in small-cap value and small-cap foreign in about month.
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