madsinger monthly report

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madsinger
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madsinger monthly report

Post by madsinger »

Here is a big fat collection of portfolios, with their August 2009 returns, 2009 YTD return, and annualized returns since 1999, 2001, 2004 and 2006 (10 years 8 months, 8 years 8 months, 5 years 8 months, 3 years 8 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.

-Brad.

Code: Select all

                                  CAGR    CAGR    CAGR     CAGR
                 Aug      YTD     since   since   since    since
                 2009     2009    2006    2004    2001     1999
Hot Hands        2.92%    9.60%  -6.46%   3.92%   7.31%   10.14%
Sheltered Sam    5.06%   18.52%  -1.92%   3.64%   3.68%    4.74%
VFINX            3.59%   15.02%  -3.34%   0.42%  -1.19%   -0.07%

s&d              4.55%   17.14%   0.48%   4.83%   4.66%    5.59%
Newsletter G     3.32%   21.30%  -0.74%   4.08%   2.83%    7.16%
3 fund           3.11%   17.06%   0.77%   4.17%   2.76%    3.28%
Newsletter G-IND 3.54%   20.00%  -2.01%   3.23%   2.56%    2.31%
LS G             3.27%   15.53%  -1.50%   2.31%   1.34%    2.07%

Wellington       2.70%   14.10%   2.74%   4.90%   5.08%    5.50%
coffeehouse      4.14%   12.62%   1.68%   4.54%   5.02%    5.53%
STAR             2.53%   16.46%   1.02%   3.94%   3.81%    4.77%
Newsletter CG    2.62%   17.70%  -0.47%   3.40%   2.67%    5.19%
LS MG            2.75%   12.96%   0.27%   2.97%   2.49%    3.02%

Wellesley        2.33%   10.43%   4.38%   4.77%   5.61%    5.60%
LS CG            2.31%   11.53%   1.66%   3.25%   3.27%    3.67%
Newsletter Inc   2.15%   13.90%  -0.21%   2.38%   2.94%    2.95%

madsinger        3.51%   17.10%   0.63%            
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Post by madsinger »

A pretty good month for returns. The 80/20 portfolios in the 3% or higher range. Even 60/40 and 40/60 over 2% for the month.

REIT was a big winner for the month, up almost 14%, and Emerging markets (with a tumble at the end) the only fund I track down for the month (less than 1%).

Most portfolios are now positive since 2006 (although certainly not in mid 2007).

The end of August and beginning of September (today) have brought these numbers down a bit....but so far, 2009 (especially since March 1) has been pretty good to investors.

Wishing you all well,
Brad.
sotaboy
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Post by sotaboy »

Brad, thanks for continuing this report. I look forward to it every month.
If you could refresh my failing memory, what are the LS portfolios?
Thanks, John
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Petrocelli
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Post by Petrocelli »

sotaboy wrote:Brad, thanks for continuing this report. I look forward to it every month.
If you could refresh my failing memory, what are the LS portfolios?
Thanks, John
Lifestrategy.
Petrocelli (not the real Rico, but just a fan)
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madsinger
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Post by madsinger »

sotaboy wrote:Brad, thanks for continuing this report. I look forward to it every month.
If you could refresh my failing memory, what are the LS portfolios?
Thanks, John
Hello John,

As Petrocelli said, the LS G, LS MG and LS CG are the Vanguard Life Strategy Growth, Moderate Growth and Conservative Growth funds. I chose to include these funds because they are such simple proxies for portfolio investing. To be honest with you, I am surprised and a little disappointed at their long term performance. It is true that the chart starts in 1999, which was right after a large run-up in Large Cap US stocks (which these funds favor). Perhaps if I were to go back to 1995, they might not look like such laggards. Personally, I really don't think these funds should be so easy to beat over the long term.

-Brad.
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paulob
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Post by paulob »

Hi Brad,
Thanks for the report.

It might not be fair to compare the Life Strategy funds to (most of) the portfolios listed in your report.

They (LS) are designed to be a portfolio stategy in one fund. The other portfolios have 3 or more funds to invest in/rebalance/manage, etc. The "typical" investor (e.g NOT a Diehard) is "not ready for prime time" and would be better off with a one fund investment, IMHO.

They also have one built-in advantage over VG's target retirement funds: many people don't know WHEN they are going to retire. But, if they look at LSG and see is the the LS offered for long-term goals, the choice may be easier to make.

I am ignoring Wellington/Wellsley and their one fund approach. Basically, a lot of strategies pale in comparison, not just Lifestrategy.
Paul
Phatphoeater
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Post by Phatphoeater »

Simple question regarding the YTD you report. Are you using a simple (total asset value/invested)-1 to calculate? I'm still trying to figure out a way to look at my returns and use a simple total/invested-1, XIRR, and XIRR adjusted for period.
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Post by madsinger »

Phatphoeater wrote:Simple question regarding the YTD you report. Are you using a simple (total asset value/invested)-1 to calculate? I'm still trying to figure out a way to look at my returns and use a simple total/invested-1, XIRR, and XIRR adjusted for period.
For the fund portfolios, I use the YTD figures posted on the Vanguard website. They start the year at the percentages shown, and not rebalanced until the next year. For example, the "3 fund" portfolio consists of:

50% Total Stock Market
30% Total International
20% Total Bond Market

The YTD (through 8/31) returns for these funds are 16.70%, 25.95% and 4.62% respectively. Therefore, the return for this portfolio is:

50% * 16.70% + 30% * 25.95% + 20% * 4.62% = 17.06%

My personal portfolio (madsinger) is my real world money portfolio with rebalancing, bi-weekly 401k contributions, and the occasional contribution (and withdrawal) from the portfolio. For this, I use the XIRR function in Excel to compute an "annualized" return. I then convert that to a "YTD" return by raising the "annualized" return to the "N/365" power, where N is the number of days YTD. For example, for my portfolio, XIRR returns a value of 26.765% (YTD through 8/31/2009). To convert that to a "YTD return":

(1+.26765) ^ (243/365) - 1 = 17.10%

(243 is the number of days from Dec 31 to Aug 31).

I feel that this is a fairly accurate representation of my return, because the additions are relatively small compared to the size of the portfolio. You can make XIRR get weird results if you add and subtract relatively large amounts from the portfolio...I don't do that.

Let me know if you would like further explanation.

-Brad.
Phatphoeater
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Post by Phatphoeater »

thanks for the explanation. I get a signficantly different number using the period adjusted XIRR (using the same formula you mention above) vs. (total/invested)-1. It must be that I'm just starting out and have contributed a fair percentage of the portfolio's total value this year.
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