2016 YTD investment performance thread

[LOL!]

I'm confused by this. My international stock funds are all still down YTD.

If one purchased their foreign funds after they had dropped this year, say around January 20-21 or around February 11, then those funds are up 7% to 13% since one's purchase.

Even US small-cap value index is up about 13% since then.

Have you rebalanced this year? That can also help if it was done at a judicious time.

 

[eytonxav]

Just gave a summary based on my VG performance report ytd. The full story is I moved some funds to cash from Morgan Stanley to Vanguard at the end of last year. Bought additional stock funds during the recent dips in January and February. Every little bit helped.

Thanks for clarifying, you did good!

 

[NW-Bound]

I'm confused by this. My international stock funds are all still down YTD.

Yes, mine are still down YTD. I was talking about daily changes. They show reversal in the sectors that have been beaten down badly. Another example is US small caps also doing well relative to the S&P.

 

[simple girl]

If one purchased their foreign funds after they had dropped this year, say around January 20-21 or around February 11, then those funds are up 7% to 13% since one's purchase.

Even US small-cap value index is up about 13% since then.

Have you rebalanced this year? That can also help if it was done at a judicious time.

Thanks.

I have, but only partially. On Feb 2 we bought our Roths for the year - we were down on PRIDX when I rebalanced, so I chose that fund. It was low (comparatively), but not at it's lowest for the year, which I see now as you said was Feb 11. {sigh}

Plus, I guess ~$11K thrown in then isn't going to make that big of a difference.

Even so, I'm trying to figure out if I need to change something more in my allocations. I see some on here with positive returns, others with negatives...this thread really makes one question themselves!

I need to reassess what our allocations are now and if I need to rebalance further.

 

[simple girl]

Yes, mine are still down YTD. I was talking about daily changes. They show reversal in the sectors that have been beaten down badly. Another example is US small caps also doing well relative to the S&P.

Oh thank you, that makes me feel better!

 

[NW-Bound]

You are welcome. I did pick up some of the beaten down sectors, EM included, but it was not sufficient to bring the total up. Still makes me feel good to claim that I bought low.

 

[LOL!]

Even so, I'm trying to figure out if I need to change something more in my allocations. I see some on here with positive returns, others with negatives...this thread really makes one question themselves!

I need to reassess what our allocations are now and if I need to rebalance further.

This thread does not make me question myself. Instead, it makes me question the data sources, accounting, and math of the some of the people posting.

Instead of comparing your portfolio to unknowns in this thread, may I suggest that you compare to a known benchmark. If your portfolio is 60/40 for example, here are some benchmarks which are all 60/40 right now that might be useful:
VSMGX
VTWNX
VBIAX
DGSIX

The above funds are not all quite the same. One does not have any international. One has more international than the others.

If your portfolio is not 60/40, then you might choose to use a Target Date/Retirement fund with a similar allocation as your portfolio.

I like comparing to benchmarks because if my portfolio performance trails my benchmarks by too much, then my market timing is not helping me. OTOH, if my portfolio performance exceeds my benchmarks, then it probably tells me that my market timing has really increased my risk. Of course, all this iassumes that I do the proper calculations of ALL my investments and not just the one's I like or the one's that have done well and not over special time periods. Otherwise, I am just fooling myself.

 

[simple girl]

This thread does not make me question myself. Instead, it makes me question the data sources, accounting, and math of the some of the people posting.

Instead of comparing your portfolio to unknowns in this thread, may I suggest that you compare to a known benchmark. If your portfolio is 60/40 for example, here are some benchmarks which are all 60/40 right now that might be useful:
VSMGX
VTWNX
VBIAX
DGSIX

The above funds are not all quite the same. One does not have any international. One has more international than the others.

If your portfolio is not 60/40, then you might choose to use a Target Date/Retirement fund with a similar allocation as your portfolio.

I like comparing to benchmarks because if my portfolio performance trails my benchmarks by too much, then my market timing is not helping me. OTOH, if my portfolio performance exceeds my benchmarks, then it probably tells me that my market timing has really increased my risk. Of course, all this is assumes that I do the proper calculations of ALL my investments and not just the one's I like or the one's that have done well and not over special time periods. Otherwise, I am just fooling myself.

Absolutely correct, and I have been looking at benchmarks, but I am lower than the benchmarks I've been looking at - so that has really been making me wonder about my allocation. For example:

as of 3/1:

VSMGX: - 1.69%

We are ~ 60/40 with international (when I have time I will rerun my rebalancing spreadsheet and post more details). Our return as of 3/1 (I verified with XIRR, a bit better than I posted earlier) was - 2.23.


Perhaps if I post more details you all can help me figure out what benchmark would be most appropriate for me to compare to...back later! Thanks!

 

[CRLLS]

I use simple math to evaluate the overall health of my investments. No additions, no withdrawals were made in this period: total value of invested accounts at close of Dec 31,2015 / close yesterday = -2.5% about 70/30 with 19% in foreign equities. Can't say I'm thrilled about this period. It is just a snapshot in time and slightly better than the SP500 (-2.81) and DJI (-3.02) YTD as of yesterday. It has been worse in the past and will be better in the future.

 

[UncommonSense]

5.45 YTD (as of 3/2/16) in my 401K
-2.94 YTD for my spouses 401K

 

[NW-Bound]

Speaking of how to compute return, we have talked about this before, but I will reiterate something here. If there is no withdrawal nor deposit, it is simple. But when there cash flow in/out of the portfolio, that's where people may differ on how it is computed.

Let's say the market return is 5%, and you also make a withdrawal of 5%. So, your portfolio should stay the same, right? No, it depends on when you make the withdrawal.

Start out with $1M, if you let it grow to $1,050K then take out $50K, you still have $1M.

But if you withdraw $50K at the beginning, your $950K will grow to only $997.5K. It's $2.5K less or 0.25% less than the first case.

In the 1st case, the return is ($now+$wdrl)/$start, while in the second case the return is $now/($start-$wdrl). The difference between the two cases is the growth of that withdrawal, the 5% gain on the 5% withdrawal amount if delayed till the end.

If you now also have deposit it gets a bit more complicated. Worse, with multiple withdrawals and deposits, you will have to use the XIRR function, which mathematically accounts for the time of all the deposits and withdrawals. But I want to keep it simple, and just use ($now+$wdrl)/$start. I actually take money out throughout the year and not at the end, so the real return is actually a bit better than what I compute.

 

[TallTim]

+2.3% YTD as of EOD Feb 29.
Not great, but given all the volatility, I'll take it.

Trading profits + small consulting > expenses.

 

[Dan4495]

+2.3% YTD as of EOD Feb 29.
Not great, but given all the volatility, I'll take it.

Trading profits + small consulting > expenses.

Considering that I am -2.25% YTD as of today after the gains of the last week, I'd say you are doing pretty great.

 

[pb4uski]

I did not write that anybody had to agree with me.

OK, now let''s get back to the Tower of Babel that is everyone's YTD performance.

How about this and everyone use 12 months as months elasped? While it sacrifices some precision to simplicity, at least it would offer consistency.

Investment Return Calculator: Measure your Portfolio's Performance

This calculator can only give you an estimate (total accuracy would require you to give the date and amount of each addition and withdrawal) but it's a respected estimate, using a formula recommended by The Four Pillars of Investing and The Motley Fool, and widely used by many others.

 

[simple girl]

Absolutely correct, and I have been looking at benchmarks, but I am lower than the benchmarks I've been looking at - so that has really been making me wonder about my allocation. For example:

as of 3/1:

VSMGX: - 1.69%

We are ~ 60/40 with international (when I have time I will rerun my rebalancing spreadsheet and post more details). Our return as of 3/1 (I verified with XIRR, a bit better than I posted earlier) was - 2.23.


Perhaps if I post more details you all can help me figure out what benchmark would be most appropriate for me to compare to...back later! Thanks!

Ok my asset allocation currently is:

60% stock (17% of this is international)
33% bond
7% short term/cash

Seeing the above, what benchmark would you all recommend I compare my YTD return to?

 

[pb4uski]

In selecting a benchmark it is more important to know your target AA rather than your current AA because in comparing the benchmark to your actual results it reflects differences between your actual AA and target AA as well as different performance between your actual holding in each category and the indices in each category.

One idea would simply be the Target Retirement fund of your choice that best reflects your target AA... or you could select an index fund in each category and then compute a weighted average based on your target AA.

 

[LOL!]

Ok my asset allocation currently is:

60% stock (17% of this is international)
33% bond
7% short term/cash

Seeing the above, what benchmark would you all recommend I compare my YTD return to?

Is that 17% of 60% so 10% of total portfolio? Or 17% of total portfolio?

Either way, I think VSMGX is a perfectly good benchmark for you.

At the end of today, below are the YTD total returns from Morningstar.com
VSMGX - LifeStrategy Moderate Growth - 60/40 asset allocation using total market weights, unchanging over time.

VTWNX - Target Retirement 2020, 60/40 now, but changing over time

DGSIX DFA Global 60/40 - small-cap and value-tllted with DFA fund managers

VBIAX - Vanguard Balanced 60/40 but no international.

One thing to note is that the dispersion of returns from similar passively-managed mostly index 60/40 portfolios is about 0.25%. So I do not think that being 0.3% different from your benchmark is that significant.

Clearly, international has done worse than domestic this year, so VBIAX is doing better than the funds with international equities.

I also think the only way to do much better or much worse than these benchmarks is to have a different asset allocation (or high fees). For instance, someone who panicked and sold out on Feb 11th for just a couple of weeks, then bought back in would way underperform. In contrast, someone who switched from 60/40 to 75/25 on Feb 11th would have outperformed even if they sold to get back to 60/40 yesterday.

And a change of stocks from 60% to 75% temporarily comes with risk and maybe not as much reward as one might think. If stocks go up 10% while at the higher allocation, that improves performance by only 1.5% total. If stocks up up only 5%, that extra 15% to stock improves performance by only 0.75% total. Of course, if one shifts to 75% equities and stocks go down, then that hurts instead of helps.

It might be easier for some folks to reduce fees to improve performance than it would be to do any market timing, too.

 

[redduck]

How about this and everyone use 12 months as months elasped? While it sacrifices some precision to simplicity, at least it would offer consistency.

Investment Return Calculator: Measure your Portfolio's Performance

Good idea. But, I wonder if there might be another calculator we could use as this one didn't give me the numbers that I wanted to see.

 

[simple girl]

In selecting a benchmark it is more important to know your target AA rather than your current AA because in comparing the benchmark to your actual results it reflects differences between your actual AA and target AA as well as different performance between your actual holding in each category and the indices in each category.

Oh, sorry, I didn't mention - that is our target AA - we are currently balanced.

One idea would simply be the Target Retirement fund of your choice that best reflects your target AA...

That is what I am asking for. Are there suggestions for a Target Retirement fund that is 60/40, which includes ~ 17% slant towards international in the stock section (43% US stock, 17% Int, 33% bonds, 7% cash). I can continue to research on my own but was hoping someone would have a suggestion of one they know is close to that.

 

[simple girl]

Is that 17% of 60% so 10% of total portfolio? Or 17% of total portfolio?

Either way, I think VSMGX is a perfectly good benchmark for you.

At the end of today, below are the YTD total returns from Morningstar.com
VSMGX - LifeStrategy Moderate Growth - 60/40 asset allocation using total market weights, unchanging over time.

VTWNX - Target Retirement 2020, 60/40 now, but changing over time

DGSIX DFA Global 60/40 - small-cap and value-tllted with DFA fund managers

VBIAX - Vanguard Balanced 60/40 but no international.

One thing to note is that the dispersion of returns from similar passively-managed mostly index 60/40 portfolios is about 0.25%. So I do not think that being 0.3% different from your benchmark is that significant.

Clearly, international has done worse the domestic this year, so VBIAX is doing better than the funds with international equities.

I also think the only way to do much better or much worse than these benchmarks is to have a different asset allocation. For instance, someone who panicked and sold out on Feb 11th for just a couple of weeks, then bought back in would way underperform. In contrast, someone who switched from 60/40 to 75/25 on Feb 11th would have outperformed even if they sold to get back to 60/40 yesterday.

And a change of stocks from 60% to 75% temporarily comes with risk and maybe not as much reward as one might think. If stocks go up 10% while at the higher allocation, that improves performance by only 1.5% total. If stocks up up only 5%, that extra 15% to stock improves performance by only 0.75% total. Of course, if one shifts to 75% equities and stocks go down, then that hurts instead of helps.

Thank you very much - that's exactly what I was looking for!

 

[pb4uski]

It is unlikely that any target retirement fund will be holding 7% in cash, but the 2020 fund would be a good benchmark IMO.

Ranking by Percentage	Fund	Percentage
1	Vanguard Total Stock Market Index Fund Investor Shares	35.6%
2	Vanguard Total Bond Market II Index Fund Investor Shares*	27.7%
3	Vanguard Total International Stock Index Fund Investor Shares	23.5%
4	Vanguard Total International Bond Index Fund Investor Shares	12.2%
5	Vanguard Short-Term Inflation-Protected Securities Index Fund Investor Shares	1.0%
Total	—	100.0%

 

[NW-Bound]

How about this and everyone use 12 months as months elasped? While it sacrifices some precision to simplicity, at least it would offer consistency.

Investment Return Calculator: Measure your Portfolio's Performance

What that formula does is to assume 1/2 of withdrawal (deposit) is at the start, and the other 1/2 is at the end. It is a compromise, and works best if you continue to withdraw or deposit periodically through the period.

To use my earlier example of 5% return and a $50K withdrawal on a $1M portfolio (post #161) :

Case 1) Withdrawal at the end -> Portfolio end value = $1M
Return = ($now+$withdrawal)/$start

Case 2) Withdrawal at start -> Portfolio end value = $997.5K
Return = $now / ($start-$withdrawal)

Case 3) 1/2 Withdrawal at start, 1/2 at end -> Portfolio end value = $998.75K
Return = ($now+1/2 $withdrawal) / ( $start - 1/2 $withdrawal)

To compare two individual returns without knowing when they make any withdrawal (or deposit) without using the XIRR function, by using case 3) you assume the average case and have only 1/2 the error.

PS. I forgot about another case. The exact formula to match this is a bit more complex, but note how it comes close to Case 3).

Case 4) Withdrawal at 1/2 point in period -> Portfolio end value = $998.765K.

 

[NW-Bound]

So, as of market close today, I am down only -0.7% YTD.

This is not at all shabby, considering that I am holding more than 30% cash with only 6% bond, and inside the 60% stock I have 16% foreign.

Bond is up 1 to 2% YTD which I do not have. Cash at 2.5%/year does not help much. Foreign stocks are still down -5.5% YTD as seen with VXUS. S&P is still down -2%. So, my short-term market timing trades and my domestic stocks save the day to bring the portfolio to nearly break even (I am not an indexer).

 

[Mulligan]

Today was probably my best day of the year. Went from being up 1% to 2% in one day. Meaningless though, as most of money is in illiquid preferreds that jump up or down on 100-200 shares traded in a day. At the end of the year if I am up 6% it has been a solid year. I just mostly wait for dividend dumps.


Sent from my iPad using Tapatalk

 

[papadad111]

The entire YTD analysis is an arbitrary date - fools game ...

Broad SP500 domestic Market is Down 6.5% from all time highs.

I'm down 7.8% from all time highs

International is still lagging.