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5-10 year performance thread
Old 10-12-2018, 03:17 PM   #1
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5-10 year performance thread

The YTD performance thread is interesting but changes drastically from week to week. I'm usually concerned about long term performance. Maybe those numbers are boring. Our 10 year performance is 6%, but we held too much cash waiting for right moment. Finally, took the stock fund plunge when market at 15,000. The other part of the portfolio had a slow but steady build. Our 5 year performance is better, overall.



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Old 10-12-2018, 04:21 PM   #2
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I've had way too many moving parts over the last 10 years to calculate are 10 year return using XIRR as we do for the YTD thread.

That said, most of my money is at Vanguard and Vanguard indicates that my 3, 5 and 10 year returns have been 11.2%, 8.0% and 8.8%, respectively. My actual returns would probably be a bit lower in that I have some fixed income outside of Vanguard that returns 3-4% and are about 10% or so of my portfolio so the adjusted returns would be ~10.4%, 7.6% and 8.3% respectively.

It sort of makes sense in that my benchmark is the Life Strategy Moderate Growth fund... a 60/40 mix and those benchmark returns have been 9.17%, 7.19% and 7.35% for 3, 5 and 10 years, respectively.
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Old 10-12-2018, 04:24 PM   #3
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I've had way too many moving parts over the last 10 years to calculate are 10 year return using XIRR as we do for the YTD thread.

That said, most of my money is at Vanguard and Vanguard indicates that my 3, 5 and 10 year returns have been 11.2%, 8.0% and 8.8%, respectively.
Thatís amazing! Which funds are you in? TIA.
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Old 10-12-2018, 04:39 PM   #4
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Thatís amazing! Which funds are you in? TIA.
Not all that amazing... a plain-Jane 60/40 index portfolio rebalanced annually would be 9.39% for 3 years, 7.25% for 5 years, and 7.74% for 10 years.

https://www.portfoliovisualizer.com/...location3_1=40

https://www.portfoliovisualizer.com/...location3_1=40

https://www.portfoliovisualizer.com/...location3_1=40
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Old 10-12-2018, 05:30 PM   #5
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My 5, 10 and 15 year returns have been 7.0%, 10.6% and 7.2% respectively.
This year: minus 0.17% YTD after today (Friday)

Sort of like holding bonds for the year! Could dig out over the next 2.5 months but we'll see. '15 was a dog (-0.74%) but '16 rallied with 10.1% and '17 did even better with 14.5%

Still pulling in those 2% dividends which is what we really live on most years.
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Old 10-12-2018, 07:04 PM   #6
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I've had way too many moving parts over the last 10 years to calculate are 10 year return using XIRR as we do for the YTD thread.

That said, most of my money is at Vanguard and Vanguard indicates that my 3, 5 and 10 year returns have been 11.2%, 8.0% and 8.8%, respectively. My actual returns would probably be a bit lower in that I have some fixed income outside of Vanguard that returns 3-4% and are about 10% or so of my portfolio so the adjusted returns would be ~10.4%, 7.6% and 8.3% respectively.
That is pretty much where we are. I only started tracking in detail after retiring end of 2015. But looking at past performance of the prime portfolio (90+ %) we are in the 8%-9% range for the last 10 years. AA is a little more conservative (55, 35, 10). The cash probably would drag a calculated Return down to around 8% for 10 years.
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Old 10-12-2018, 07:15 PM   #7
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Up until this year (the year before my actual planned RE), I held ~90% equities in various Vanguard funds, which have performed as follows:

10-Year: 11.5%
5-Year: 12.1%
1-Year: 16.8% (as of 9/30/18)
YTD: 2.6%, not annualized (as of 10/12/18)

Note, that this includes the post 2008-2009 run-up after the 'crash'. This was the year I actually bought my first bonds (BND), but they're only 5% of NAV, and the returns listed don't include cash and ESOP shares held externally to VG.
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Old 10-12-2018, 07:29 PM   #8
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Not fantastic, but consider my low AA equities, it’s roughly about 6-7% for 10 years. If I include my trading account, it’s probably higher. But I’m happy that it beats CDs rate.

Edit to add, VTI performance for 10 years is 12.01%.
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Old 10-12-2018, 07:55 PM   #9
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Ten years ago, in Oct 2008, the market was terrible although it did not hit bottom until March 2009.

Compared to that, most people would be quite OK by now. The Dow was under 10,000 then, and now it is still above 25,000 despite the recent drop.

But that is past. We are lucky to have that. The chance of it repeating is zilch.
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Old 10-12-2018, 07:57 PM   #10
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I wouldn’t say zilch, I’ve heard big banks are lending subprime mortgage again. I think from CNBC today.
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Old 10-12-2018, 08:24 PM   #11
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I wouldn’t say zilch, I’ve heard big banks are lending subprime mortgage again. I think from CNBC today.
Subprime mortgages were not what brought down the financial system. What brought down the financial system was bundling them with other mortgage-backed securities, getting them rated AA or AAA credit quality, and selling them off to unsuspecting investors. In the former case a loan buyer/investor will insist on a high interest rate to compensate for the risk - it's completely transparent. In the latter case, the risk was hidden, and the security buyer thought he was buying top credit quality so was accepting lower rates.

Of course it fed on itself. The bundling and selling off of these "investment grade" mortgage backed securities was successful, so it created more demand, and banks went crazy trying to sell more loans which they turned around and got rid of as soon as possible. Lending standards dropped dramatically as banks tried to generate more loans to sell, not caring about the risk. The banks no longer had any skin in the game.

Regulations since 2008 mostly stopped this practice and forced a bank/lender to have some skin in the game and made banks lower their risk profiles. Unfortunately those regulations have been eroding again.
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Old 10-12-2018, 08:26 PM   #12
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Subprime mortgages were not what brought down the financial system. What brought down the financial system was packaging them in mortgage-backed securities, getting them rated AAA credit quality, and selling them off to unsuspecting investors. In the former case a loan buyer/investor will insist on a high interest rate to compensate for the risk, in the later case, the risk was hidden, and the security buyer thought he was buying top credit quality so was accepting lower rates.
Now I remember. They packaged it so complicated that they did know how to untangle it.
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Old 10-13-2018, 09:08 AM   #13
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I couldn't even tell you. I say this despite the fact that I have our portfolio entered into the M* portfolio tracker and I update it religiously.

However, it doesn't factor in growth of some assets, like I Bonds and CDs. And I'm not going to enter those numbers manually every month.

The tracker says our annualized 5 year return is 5.8%, but it's probably a little higher for the reasons mentioned above. 60/40 portfolio.
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Old 10-13-2018, 09:34 AM   #14
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I also have all our investments in Vanguard (IRAs, and after tax) with the exception of cash which is relatively small.

Vanguard figures as of Sept 30th show
9.3% - 3 year
6.8% - 5 year
6.9% - 10 year
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Old 10-13-2018, 10:15 AM   #15
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According to the Fidelity website, our performance is:

11.3% - 3 yr
8.3% - 5 yr
7.3% - 10 yr

The 10 year figure sounds a bit low. Even though my 401K (100% equity at the time) was at Fidelity, I seem to recall that Fidelity's performance figures do not include employer plans. Indeed, when I look at the detail of the 10-year performance, there was a big jump in the balance the month after I retired 5 years ago. A quick back-of-the-envelope adjustment for that, puts the 10-year figure at 8.9%.
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Old 10-15-2018, 12:59 PM   #16
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No real idea of any official number, but Iím around 130% higher than on Jan 1, 2008, the first quarter after being rightsized out of Megaconglomocorp. So, add in $25k or so from another account, and subtract about $70k in withdrawals.
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Old 10-15-2018, 01:43 PM   #17
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What brought down the financial system was bundling them with other mortgage-backed securities, getting them rated AA or AAA credit quality, and selling them off to unsuspecting investors.
Credit default swaps allowed the buyers to buy 'insurance' in case their bundled loans went bad. Buyers overbought. Buyers flipped houses. Buyers took large HELOCs. This was all allowed by the banking system, but to blame it all on the system is a bit disengenous.
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Old 10-15-2018, 01:48 PM   #18
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Now I remember. They packaged it so complicated that they did know how to untangle it.
PBS did a special on some big bank retreat and how these nasty packaged derivatives came to be. Was interesting hearing it from the computer engineers mouth who coded it up for the bank.

Past 5 yrs averaging ~26%
2013 - +21%
2014 - +33%
2015 - +40%
2016 - +12%
2017 - +26%
2018 ~+7%


AA has been 100% equities the whole time as I am in accumulation phase.

I didn't start tracking until 2012/13 so I can't do past 10yrs. Had a FIDO rollover to VG in 2012 and sort of lost track before that. Started investing in 2007 at 26. Before that didn't have a pot to pi$$ in but did have a little bit of equity. I didn't own a credit card until I was like 30 lol. I achieved these by owning a substantial amount of AAPL (10% of my total equities) and SmallCaps earlier on.
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Old 10-15-2018, 02:41 PM   #19
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Just hit my 10 year FIRE anniversary this month...

Vanguard portfolio Brokerage & IRA accounts (98% equities):

10 yr: 12.3%
5 yr: 11.5%
3 yr: 15.5%


Did a 401k to Vanguard IRA rollover in July 2009, so this timing likely helped my Vanguard performance numbers.

I've been withdrawing from the Brokerage account at around 4% annually over the past 10 yrs (~1.8% of total portfolio).

My IRA is slightly more aggressive ~ here is the performance breakdown:


Brokerage account performance:

10 yr: 10.1%
5 yr: 10.3%
3 yr: 14.2%


IRA account performance:

10 yr: 15.2%
5 yr: 12.5%
3 yr: 16.5%
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Old 10-15-2018, 02:42 PM   #20
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I thought 2013 was +30% and 2015 was barely zero, the whole US market that is.
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