Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Coffeehouse Portfolio 5 Yr Review
Old 07-16-2005, 11:46 AM   #1
Dryer sheet wannabe
 
Join Date: Jun 2005
Posts: 20
Coffeehouse Portfolio 5 Yr Review

I don't precisely do coffeehouse allocations since I'm stuck with a certain amount of company stock (4% matching funds go into company stock) and my home in lieu of REITS. I am also heavily weighted in S&P500 - but ready to reallocate in the next coming months.

I am surprised by coffeehouse's editorial comment:

Quote:
From a financial standpoint, it is gratifying to see the profound impact that our philosophy has had on investors’ lives. While Wall Street’s beloved blue chip stocks are still under water for the five year period ending June 30, 2005, our simple, seven-index fund Coffeehouse portfolio that includes a healthy 40 percent allocation to bonds, has generated an annualized return of 7.6 percent during the same period – and with significantly less volatility to boot.
It is almost is as if I didn't need to work the last 5 years since my large contributions overall along with my portfolio perfromance is about equal to this rate of return! But then again I'm not including my house which is probably the big gainer equivalent to REITS.

Wish I was more FIRE educated 5 years ago. Now I just gotta get my mind set to re-distruibute my heavily weight S&P 500 - maybe nows a good time at its 4 year high.





dimwit is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Coffeehouse Portfolio 5 Yr Review
Old 07-16-2005, 12:19 PM   #2
Thinks s/he gets paid by the post
wabmester's Avatar
 
Join Date: Dec 2003
Posts: 4,459
Re: Coffeehouse Portfolio 5 Yr Review

Be careful looking at past returns. Any portfolio heavily invested in bonds did well over the last 5 years, because bonds had great appreciation as rates fell. A 100% bond portfolio would have also given you around 8% annualized returns over the last 5 years, but that doesn't mean you should switch to 100% bonds.
wabmester is offline   Reply With Quote
Re: Coffeehouse Portfolio 5 Yr Review
Old 07-16-2005, 03:23 PM   #3
Thinks s/he gets paid by the post
 
Join Date: Mar 2004
Posts: 1,318
Re: Coffeehouse Portfolio 5 Yr Review

I'm not sure Coffehouse's big returns were from bonds, though. They invest in small and international stocks, which also did really well. Remains to see how international does in the next few years, since the dollar has been steadily strengthening. Still, that is the beauty of the CoffeeHouse approach -- there is always something going up, something going down and something going sideways. Overall, though, the numbers keep chugging ahead.

I almost like to look in my portfolio and see asset classes that are down, because they say, in effect, that the system is working. If everything went up together, then I know that everything can go down together, too. (It can, but if I have picked correctly, it is not too likely).

__________________
ER for 10 years; living off 4.3% of savings (and a few book royalties ;-)
ESRBob is offline   Reply With Quote
Re: Coffeehouse Portfolio 5 Yr Review
Old 07-16-2005, 03:34 PM   #4
Thinks s/he gets paid by the post
wabmester's Avatar
 
Join Date: Dec 2003
Posts: 4,459
Re: Coffeehouse Portfolio 5 Yr Review

Quote:
Originally Posted by ESRBob
If everything went up together, then I know that everything can go down together, too.
I'm still expecting that surprise result for the next few years: we'll see just about all asset classes correlated as inflation and interest rates rise (I suppose to be safe, I should say "if" they rise). In theory, that should kill bonds, both domestic and international stocks, and real estate. Cash and commodities might do well in that environment, though.
wabmester is offline   Reply With Quote
Re: Coffeehouse Portfolio 5 Yr Review
Old 07-17-2005, 08:37 PM   #5
Thinks s/he gets paid by the post
 
Join Date: Mar 2004
Posts: 1,318
Re: Coffeehouse Portfolio 5 Yr Review

Rising interest rates historically have trashed pretty much everything except commodities. Not even sure how well cash does in periods of rising interest rates if if real interest rates don't rise, but even if real interest rates are plumper, cash is never going to be the thing that powers my portfolio to the point of fully supporting the safe withdrawal rate.

Still, having predicted rising interest rates for the past few years, it may be time to admit that I have no clue (and I wonder if anybody actually does) about what exactly is going to happen to interest rates, or when, or why.

Thus I slice and index and allocate my assets, secure in the knowledge that I am ignorant.
__________________
ER for 10 years; living off 4.3% of savings (and a few book royalties ;-)
ESRBob is offline   Reply With Quote
Re: Coffeehouse Portfolio 5 Yr Review
Old 07-18-2005, 12:15 AM   #6
Thinks s/he gets paid by the post
Spanky's Avatar
 
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,455
Re: Coffeehouse Portfolio 5 Yr Review

During periods of rising interest rates, stocks of consumer staples, gold-mining, commodities as inflation hedge should hold up well. TIPS or Ibonds may do fine as well.
__________________
May we live in peace and harmony and be free from all human sufferings.
Spanky is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
SWR - Amortize your portfolio RgrGd FIRE and Money 5 03-28-2007 10:29 AM
Portfolio Review Request Sheryl FIRE and Money 14 01-31-2006 01:41 PM
Conservative distribution phase portfolio peteyperson FIRE and Money 13 03-22-2005 06:48 AM
Volatility in your Portfolio ESRBob FIRE and Money 5 03-03-2005 09:09 AM
Overseeing Coffeehouse Portfolio Rich FIRE and Money 8 01-11-2005 03:25 PM

» Quick Links

 
All times are GMT -6. The time now is 04:54 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.