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Old 09-23-2008, 10:46 AM   #61
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My net worth has decreased 4% since 31 December 2007. However that includes all my additional contributions in 2008. So truthfully we have no idea how much we are down, not really bothered as we have examined what we are holding in our investments and we remain happy with our choices.

What helps us sleep is we have always held a large cash position, at the moment our allocation is 42/58. We have enough cash to last us at least 5 years.
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Old 09-23-2008, 11:08 AM   #62
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Quote:
Originally Posted by utrecht View Post
I dont understand how some peoples portfolios are still doing so well (relatively) even when they are diversified like this....

I calculate this 39/7/39/15 portfolio to be down about 7.2% as opposed to the -3.3% return posted here.

I used these assumptions:

39% VFINX (-16.5% YTD)
7% VWIGX (-22.5% YTD)
39% PTRAX (+1.1% YTD)
15% Money Market (paying 3.5%)

It seems to me that this guy should have a bigger loss than posted
Well, I look at the value of the TOTAL portfolio as of the end of the prior year, and each time I update values, my spreadsheet compares the value of the current total portfolio and calculates a percentage gain/loss from the 12/31 figure.

I also hold about 25 investments ranging from Money Markets, CD's, index funds, and individual stocks.

-- Rita, the "guy"
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Old 09-23-2008, 09:51 PM   #63
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Quote:
Originally Posted by Gotadimple View Post
Well, I look at the value of the TOTAL portfolio as of the end of the prior year, and each time I update values, my spreadsheet compares the value of the current total portfolio and calculates a percentage gain/loss from the 12/31 figure.

I also hold about 25 investments ranging from Money Markets, CD's, index funds, and individual stocks.

-- Rita, the "guy"
That works OK if you have made no "deposits" or "withdrawals", but otherwise you're not computing the true return. That would be similar to the Beardstown Ladies method.

Not to disparage any particular individuals on this board, but I'm always skeptical of people stating their investment returns because many don't really understand how to compute them and there are many ways to make mistakes (not to mention sometimes cherry picking the data). Not taking into account cash flow in/out of the portfolio is one of the biggest and easiest mistakes to make.

Quicken is not very helpful either because it will not compute a total portfolio return including non-investment type accounts like CDs, savings, MMs, etc. So I've gone to a lot of work tracking my portfolio return in a spreadsheet using the XIRR function in Excel. This requires the close tracking of cash flow in/out of the portfolio.

BTW, as of Sep 19 my total portfolio is down about 6.4% YTD, 7.5% from the market high in Oct '07.

I'm currently 67/33 stocks/FI. And I've poured $57K into stocks this year; 30K of new $, 27K moved from FI (actually more than that since I moved a bunch that was in TSP Lifecycle funds to all stocks in the 1st quarter, but it's too complicated to figure out), with 32K going in since the end of July. I'm optimistic that I'll look back at this as a great buying opporunity. Time will tell!
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Old 09-23-2008, 10:01 PM   #64
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Quote:
Originally Posted by Gardnr View Post
Quicken is not very helpful either because it will not compute a total portfolio return including non-investment type accounts like CDs, savings, MMs, etc. So I've gone to a lot of work tracking my portfolio return in a spreadsheet using the XIRR function in Excel. This requires the close tracking of cash flow in/out of the portfolio.
I solved that problem by moving all my money to Vanguard. My EF (Prime money market fund), CDs (through VG's bond desk) and investments are all included in the "investing center" section of Quicken. The only account not included is my checking account. So when Quicken calculates my return, its the real return on everything (cash savings included). Quicken also takes into account cash flow movements in its return calculation.
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