madsinger monthly report

[madsinger]

Here is a big fat collection of portfolios, with their September 2008 returns, 2008 YTD return, and annualized returns since 1999, 2001, 2003 and 2005 (9 years 9 months, 7 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 Total Return since 2001. 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.

New for 2008, I've added the "Hot Hands" fund, and the Newsletter "Growth Index" portfolio. I've also rearranged the columns so the far right is the "longest" time period, and the far left is the shortest.

The madsinger portfolio, my real-money portfolio (slice-n-dice, approximately 66/5/3/26 stock/REIT/PM/bond) is included at the end.

-Brad.

Code: Select all

                                   CAGR    CAGR    CAGR    CAGR
                   Sep     YTD     since   since   since   since
                   2008    2008    2005    2003    2001    1999
Hot Hands        -13.84%  -30.08%  3.90%  14.68%  11.06%  13.46%
Sheltered Sam     -8.24%  -17.68%  3.94%  11.52%   5.65%   6.41%
VFINX             -8.91%  -19.32%  0.80%   6.88%   0.05%   1.03%

s&d               -6.98%  -14.64%  4.00%  10.71%   5.81%   6.60%
Newsletter G-IND -11.65%  -21.90%  3.42%   9.37%   4.02%   3.44%
Newsletter G     -13.59%  -23.70%  2.75%   9.56%   3.45%   8.09%
3 fund            -8.46%  -17.89%  3.22%   9.00%   3.26%   3.73%
LS G              -8.92%  -18.55%  2.23%   8.18%   2.44%   3.03%

coffeehouse       -5.60%   -9.49%  3.44%   8.53%   5.74%   6.15%
Wellington        -7.39%  -13.02%  3.97%   7.96%   5.43%   5.83%
STAR              -7.61%  -14.50%  2.40%   7.27%   4.01%   5.02%
newsletter CG     -9.87%  -18.70%  2.88%   8.76%   3.52%   6.11%
LS MG             -7.09%  -14.34%  2.61%   7.19%   3.20%   3.64%

Wellesley         -3.47%   -6.96%  3.35%   5.15%   5.37%   5.40%
LS CG             -5.78%  -10.60%  2.70%   5.92%   3.60%   3.98%
newsletter Inc    -9.63%  -14.60%  1.08%   5.28%   3.13%   3.10%

madsinger         -7.57%  -13.26%  4.09%

[madsinger]

Well...anything to talk about here?

Just about every fund I look at lost money in September. Total Bond was down 1.11%. Intermediate Bond Index down -3.47%. The big "winner" (i.e. the smallest "loser") this month is VGSIX (REITs) down only -0.11%.

Stocks got whomped, of course. Value held up a little better than blend with VIVAX and VISVX (-7% and -6%) doing better than VFINX and NAESX ( both down about -9% ). International got hit harder with Total Int'l down -13% and Emerging Markets down -16%. The biggest standout was Precious Metals down almost -24% for the month.

As for the portfolios...the more bonds, the better. s&d and Coffeehouse were helped significantly by the 10% weighting in REITs.

For you newsletter followers, I question a couple of the "monthly" returns posted on the website, but I'm assuming the YTD returns are correct. It was a rough month for the newsletter portfolios, but their long term records are still very good.

A few things leap out at me this month: VFINX (S&P 500 index fund) has a 7 year 9 month annualized return of 0.05%. Yikes! Diversification is good, people! The other comment for me is that the madsinger portfolio is the number 1 performer for the "since 2005" category! Although I didn't think 4.09% was something to be too excited about, I think it tells me that having a diversified portfolio that I rebalance, has served me well. I wish I hadn't rebalanced back into Precious Metals earlier this month, but that's what I did...following my plan. I'm almost getting to the point of buying more PM again!

This has been a tough month. It's clearly tested some investors' "risk tolerance". I do hope you are all satisfied with your portfolios and are prepared for the future. It might be good or bad...but you should be ready for either!

And...on to October!

-Brad.

[Jack_R2]

Brad, the interesting thing to me is that VFINX has a CAGR return of only 1.03% since 1999 - almost 9 years. This truely shows the advantage of a diversified portfolio. Before I found the Bogleheads and started reading the recommended books, I used to think that owning only the S&P 500 was having a diversified portfolio. Your chart shows the strength of a S&D portfolio.

Jack

[DiehardDoc]

Always appreciate your post.

My portfolio as per Vanguard:

S: B 80: 20 CAGR 1yr: -25%, 3 yr: -4%

Lumpsum (10-15% of my total portfolio in May) seems to have caused major drop.

Approx 30% drop in VGPMX in 3 months hasn't helped at all.

Lesson learned: REBALANCE( Should have taken gains from VEIEX, VGPMX, country specific funds IFN, MINDX)

Sector specific funds and country specific funds can be extremely volatile and quickly change direction.

Don't chase hot sectors.

In summary, Listen to Laura, Taylor, PiperWarrior et all and follow boglehead philosophy.

[White Coat Investor]

Tough month for the Weinerites

[gkaplan]

As of 09/30/2008, the year-to-date return on my retirement portfolio is –11.25%. My one-year rate of return is –12.34%. My three-year rate of return is 4.02%.

My best performing fund, year-to-date, is the TSP ‘G' Fund (3.46%). My one-year rate of return is 4.64%. My return since I first started investing in this fund (June 2006) is 4.65%

My poorest performing fund, year-to-date, is the Vanguard Emerging Markets Stock Index Fund Investor Shares (-35.16%). My one-year rate of return is –33.33%. My three-year rate of return for this fund is 11.94%.

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

70.92%: Vanguard Roth IRA (YTD Return, -12.77%)
29.08%: Thrift Savings Plan (YTD Return, 2.75%)

Target allocation for my retirement portfolio is 72/28 Equity/Fixed Income. The seventy-two percent equity allocation is split equally between domestic and foreign equity; the foreign equity is split 2:1 between developed and emerging markets. Specifically, my target allocations are as follows:

12%: Domestic Large-Cap Value
12%: Domestic Small-Cap Value
12%: Domestic REIT
24%: Foreign Developed Markets (Large)
12%: Foreign Emerging Markets (Large)
28%: Fixed Income

As of 09/30/2008, my current retirement portfolio allocation is split 67/33, Equity/Fixed Income.

My Domestic Equity/Foreign Equity/Fixed Income is split 34/33/33

Specifically, my current allocations (as of 09/30/2008) are as follows.

11.53%: Domestic Large-Cap Value (VIVAX)
9.85%: Domestic Small-Cap Value (VISVX)
12.47%: Domestic REIT (VGSIX)
21.02%: Foreign Developed Markets–Large (11.63%, TSP 'I' Fund; 9.39%,
VDMIX)
12.31%: Foreign Emerging Markets – Large (VEIEX)
32.81% Fixed Income (17.45%, TSP G Fund; 15.37%, Vanguard TIPS
Fund)
(Fixed Income allocation and total allocation do not add up because of rounding.)


Pretty brutal.

Submitted for your approval.

[paulob]

I closed some ground this month, with a positive return in my IRA.

YTD is -14.8 to -15.0 (IRA and 401-k). Seeing those returns placing between Sheltered Sam and S&D, takes the sting out of the declining balance in my accounts.

[Elmer Fudd]

Good posting, Thanks. Any chance of you including Harry Brown's 25,25,25,25% portfolio. The markets have me very concerned and at 74 years old I am looking for as little stress as possible. More concerned with return of my money than return on my money.