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Re: Your TOTAL % return so far this year and last year.
Old 10-18-2006, 03:47 AM   #21
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Re: Your TOTAL % return so far this year and last year.

Not to highjack the thread back to beta, but.. FinanceDude, I wasn't talking about mutual funds...what about individual stock betas? I only have a few funds but lots of individual stocks.

Still curious about the aspects of "beta" noted in my previous post.. given the way it seems to be calculated:
1. are dividend-paying stocks processed differently since their yield can appear drastically different from one day to the next?
2. in the universe of beta, is a stock that performs better than the market, day in, day out, still deemed "more volatile"?

For the "total return" exercise I just used my Quicken ROI numbers for investment accounts (not my smallish checking account, or my house).. [House? How do you calculate total return ytd on your house?]

Spanky.. very curious about your 23+% return in bonds! My gov't. bond funds (TLT and TIPS bought about one year ago) are 0.32% and 1.7% respectively for that period! GIM 0.7% (bought only 5 months ago) and FAX 6.18% Hmph! The effects of de-worseifying! FAX I have had forever.. the others purchased on my own initiative after studying up on index investing and asset allocation! A consolation, at least, that they are not negative numbers...

Also, curious about a 17% yield for cash vs. a 3% yield for REITs.. seems like it would be the other way 'round, no? A 17% yield for cash over 22 months is truly a savvy investment strategy that I would like to learn!
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Re: Your TOTAL % return so far this year and last year.
Old 10-18-2006, 07:59 AM   #22
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Re: Your TOTAL % return so far this year and last year.

Just to let you know, I answered the poll with the amount of return I was getting each year, not 2 year combined.
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Re: Your TOTAL % return so far this year and last year.
Old 10-18-2006, 08:19 AM   #23
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Re: Your TOTAL % return so far this year and last year.

Quote:
Originally Posted by ladelfina
Spanky.. very curious about your 23+% return in bonds! My gov't. bond funds (TLT and TIPS bought about one year ago) are 0.32% and 1.7% respectively for that period! GIM 0.7% (bought only 5 months ago) and FAX 6.18% Hmph! The effects of de-worseifying! FAX I have had forever.. the others purchased on my own initiative after studying up on index investing and asset allocation! A consolation, at least, that they are not negative numbers...

Also, curious about a 17% yield for cash vs. a 3% yield for REITs.. seems like it would be the other way 'round, no? A 17% yield for cash over 22 months is truly a savvy investment strategy that I would like to learn!
Those are not returns; the percentage represents allocation. Sorry about the confusion.
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Re: Your TOTAL % return so far this year and last year.
Old 10-18-2006, 08:35 AM   #24
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Re: Your TOTAL % return so far this year and last year.

After reading this post again, I need to go get some aspirins and lay down. This is so fricken confusing, and I'm so jealous that you all understand what the heck you're talking about. My compliment to you saps.
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Re: Your TOTAL % return so far this year and last year.
Old 10-18-2006, 08:37 AM   #25
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Re: Your TOTAL % return so far this year and last year.

Quote:
Originally Posted by ladelfina
...House? How do you calculate total return ytd on your house?...
(YTD FMV - Beginning of year FMV) / Beginning of year FMV
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Re: Your TOTAL % return so far this year and last year.
Old 10-18-2006, 09:13 AM   #26
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Re: Your TOTAL % return so far this year and last year.

Did not include house. Did include cash and bonds.
5.37% YTD down from 10.59% YTD May

Last year 10.95%
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Re: Your TOTAL % return so far this year and last year.
Old 10-18-2006, 09:19 AM   #27
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Re: Your TOTAL % return so far this year and last year.

sorry Spanky.. I was confused too, and looked at your figures without realizing they made no sense with your bottom line..

retire@40.. uhmmm.. do you account for all your repair expenses in that figure? Do you count opportunity value of home equity vs. a MMF? Or do you use a monthly rental value for similar property as an inherent "dividend"?? Since people usually buy the homes they do for reasons other than the concrete investment growth/income that they get from stocks/bonds.. I'm not sure that it's a reasonable comparison in this context (performance vs. the market). If it's just for personal enlightenment, by all means, knock yourself out!

MyDream.. as you can see we DON't always know what one another is talking about! (but we try..). The original question was phrased in a bad way and asked for a number few people would bother to compute if they had to do it by hand: what percentage over your initial investments have you gained from a certain date (1/1/05) until now (10/17/06); most people, when and if they look at such a number, tend to think of it on a calendar year basis.

If I start on 1/1/05 with $100k and end on 12/31/05 with $108k, then my Total Return is 8% for the year. The trick is to make sure that any dividends, withdrawals, re-investments, etc. are duly accounted for. If your stock/fund/bond/whatever market value is $108k on New Year's Eve, but you have received $2k of interest or dividends over the course of the year and these have gone to your cash account, then your Total Return for that holding is not 8%, but 10%. Does that make sense?

Just take it one step at a time and you'll get there.. I know sometimes it seems like drinking from the proverbial fire hydrant... (for me, too).
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Re: Your TOTAL % return so far this year and last year.
Old 10-18-2006, 09:28 AM   #28
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Re: Your TOTAL % return so far this year and last year.

Quote:
Originally Posted by ladelfina
sorry Spanky.. I was confused too, and looked at your figures without realizing they made no sense with your bottom line..

retire@40.. uhmmm.. do you account for all your repair expenses in that figure? Do you count opportunity value of home equity vs. a MMF? Or do you use a monthly rental value for similar property as an inherent "dividend"?? Since people usually buy the homes they do for reasons other than the concrete investment growth/income that they get from stocks/bonds.. I'm not sure that it's a reasonable comparison in this context (performance vs. the market). If it's just for personal enlightenment, by all means, knock yourself out!

MyDream.. as you can see we DON't always know what one another is talking about! (but we try..). The original question was phrased in a bad way and asked for a number few people would bother to compute if they had to do it by hand: what percentage over your initial investments have you gained from a certain date (1/1/05) until now (10/17/06); most people, when and if they look at such a number, tend to think of it on a calendar year basis.

If I start on 1/1/05 with $100k and end on 12/31/05 with $108k, then my Total Return is 8% for the year. The trick is to make sure that any dividends, withdrawals, re-investments, etc. are duly accounted for. If your stock/fund/bond/whatever market value is $108k on New Year's Eve, but you have received $2k of interest or dividends over the course of the year and these have gone to your cash account, then your Total Return for that holding is not 8%, but 10%. Does that make sense?
Just take it one step at a time and you'll get there.. I know sometimes it seems like drinking from the proverbial fire hydrant... (for me, too).

That makes total sense, I understand numbers, but I'm finding that there are so many new words, terms I've never heard before, I believe I know the difference between stocks, mutual funds and to a certain point bonds, but there are so many other terms out there that when lumped together in a conversation go quickly over my head. I know it's going to take time, but earlier in the week, my DW picked up a new bottle of Aspirin which contains 500 pills. That should hopefully last me till the end of the year.

Thanks ladelfina.
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Re: Your TOTAL % return so far this year and last year.
Old 10-18-2006, 09:54 AM   #29
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Re: Your TOTAL % return so far this year and last year.

Quote:
Originally Posted by My Dream
After reading this post again, I need to go get some aspirins and lay down. This is so fricken confusing, and I'm so jealous that you all understand what the heck you're talking about. My compliment to you saps.
Hey, who are you calling a sap?

MD, put the bottle down and step away from the aspirin. I know you think you’re drinking from a fire hydrant, but take it from someone who knows… it doesn’t have to be that way.

Yes, there are endless of discussions of complex investing strategies on the forum. There are also a group of us (maybe even a majority?) who don’t care to know the finer points and esoteric details of shorting pork bellies or buying puts on beaver pelts. Most of us have no interest in all that complexity or risk. A handful of low expense mutual funds and a comfortable mattress are all I need to sleep soundly every night.

My advice is to relax a little regarding your currrent location on the investment learning curve, select a few conservative funds (psssst…Wellesley) and enjoy life a little….oh yeah, and don’t move to Texas.

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Re: Your TOTAL % return so far this year and last year.
Old 10-18-2006, 10:34 AM   #30
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Re: Your TOTAL % return so far this year and last year.

Quote:
Originally Posted by REWahoo!
A handful of low expense mutual funds and a comfortable mattress are all I need to sleep soundly every night.
Hey........where's the fun in that?

I'll take my ING Russia fund anyday...............
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Re: Your TOTAL % return so far this year and last year.
Old 10-18-2006, 10:37 AM   #31
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Re: Your TOTAL % return so far this year and last year.

total return 1/1/05 - 10/16/06: 18.5%

2005 ROR: 7.20%
2006 (to 10/16/06) ROR: 10.55%

Annualized return: 9.93%

Quarterly returns:
2005 Q1: -0.82%
2005 Q2: -1.98%
2005 Q3: 5.93%
2005 Q4: 4.10%
2006 Q1: 5.56%
2006 Q2: -1.42%
2006 Q3: 3.03%
2006 Q4 (through 10/16/06): 3.11%

These results include paying huge sales charges in 2005 on some load funds (before I wised up : )
Mostly (90-95%) stocks. Results are good enough for me.


[edit] I ran the results if I omit the sales charges - AMAZING!
total return 1/1/05 - 10/16/06: 22.5%

2005 ROR: 10.79%
2006 (to 10/16/06) ROR: 10.55%

Annualized return: 11.96%

If I had only gone with no load funds earlier I could have added a couple of % to my results.
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Re: Your TOTAL % return so far this year and last year.
Old 10-18-2006, 11:19 AM   #32
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Re: Your TOTAL % return so far this year and last year.

Forgive me for highjacking this thread, but if I may ask a question?

Does the 4% rule assume that you will be withdrawing 4% from you're investments each year and if you do average let's say 10% each year, you leave the 6% in each year to allow for inflation and just let your pile grow?
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Re: Your TOTAL % return so far this year and last year.
Old 10-18-2006, 11:27 AM   #33
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Re: Your TOTAL % return so far this year and last year.

Quote:
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Does the 4% rule assume that you will be withdrawing 4% from you're investments each year and if you do average let's say 10% each year, you leave the 6% in each year to allow for inflation and just let your pile grow?
Yes, because your investment returns will fluctuate and you will have negative growth in some years. Since you want to continue to withdraw 4% anually (inflation adjusted), you will need to "bank" the good years or face the possibility of exhausting your portfolio and living on cat food.

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Re: Your TOTAL % return so far this year and last year.
Old 10-18-2006, 12:52 PM   #34
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Re: Your TOTAL % return so far this year and last year.

Hey, Modhatter, I'd recommend going to the top of this thread, clicking the "Edit Poll" link, and adjusting the options for all the feedback you're getting.

Quote:
Originally Posted by LOL!
Even with measuring with genetalia size there are problems.
Well, that's why we have to do it so often.

Quote:
Originally Posted by My Dream
After reading this post again, I need to go get some aspirins and lay down. This is so fricken confusing, and I'm so jealous that you all understand what the heck you're talking about. My compliment to you saps.
This poll and many of the comments are a good example of overcomplification.

When the data stops flying around, someone will point out that overall returns are irrelevant unless they're compared to the individual investor's situation & risk tolerance. In other words it's not what you have, it's how you're using it. (See the above genitalia reference.)

Quote:
Originally Posted by My Dream
Forgive me for highjacking this thread, but if I may ask a question?
Does the 4% rule assume that you will be withdrawing 4% from you're investments each year and if you do average let's say 10% each year, you leave the 6% in each year to allow for inflation and just let your pile grow?
Yes.

If you start the year with a retirement portfolio of $100K and withdraw 4% on 1 January, you're off somewhere spending $4000 while your portfolio has shrunk to $96K. If it compounds by 10% then on 31 December it's worth $105,600. Of course inflation has also gone up that year, probably by about 3%, so technically your portfolio has only compounded 7% to $102,720 in terms of the 1 January dollars. (You now possess $105,600 "real dollars" that are only worth an inflation-adjusted $102,720.) Either way you're gonna take out 4% on the next day and let the rest ride, because some year that portfolio is going to "compound" in negative returns while inflation will keep chipping away at whatever's left over. And remember that we have to take out enough from that portfolio to pay our taxes, too...
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Re: Your TOTAL % return so far this year and last year.
Old 10-18-2006, 12:56 PM   #35
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Re: Your TOTAL % return so far this year and last year.

Quote:
Originally Posted by My Dream
Forgive me for highjacking this thread, but if I may ask a question?

Does the 4% rule assume that you will be withdrawing 4% from you're investments each year and if you do average let's say 10% each year, you leave the 6% in each year to allow for inflation and just let your pile grow?
Quote:
Originally Posted by REWahoo!
Yes, because your investment returns will fluctuate and you will have negative growth in some years. Since you want to continue to withdraw 4% anually (inflation adjusted), you will need to "bank" the good years or face the possibility of exhausting your portfolio and living on cat food.

My Dream: Because of the way you phrased your question I suspect you may be assuming that we are talking about 4% of each year's portfolio but that is not the most common approach. The standard is to withdraw 4% of the *starting* portfolio and adjust that amount up for inflation each year. So, if the starting portfolio was $100K and inflation was 3% you would take out $4k in year 1. In year two, $4K plus 3% of $4k, and so on. If your portfolio fell 20% the year after your ERd (dropping to $80k) you would still take out $4K+3% of $4K -- NOT $3.2K + inflation. Of course that is theoretically. If the market actually dropped 20% in year one most prudent ERs would stain their pants and then forego the inflation adjustment
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Re: Your TOTAL % return so far this year and last year.
Old 10-18-2006, 01:20 PM   #36
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Re: Your TOTAL % return so far this year and last year.

I am not ret retired so this is easier for me.

2006 to date +7.08%
2005 6.81


I am presently invested 75% fixed income 20% individual stocks (2 total which do change from time time) 5% S&P 500. Over the past 2 years my stock portion has not exceeded 30% nor fallen below 20%.
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Re: Your TOTAL % return so far this year and last year.
Old 10-18-2006, 01:32 PM   #37
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Re: Your TOTAL % return so far this year and last year.

OK, OK, I'm back. Wow. I knew this would not be easy. As I see it there are two ways to compute. #1 Simply add 2005 % increase to current 2006 % increase to date. Or...#2 Add both together and divide by two. I know this is not a full year, but it is the same for all. As far as reinvested dividends, like one poster said. It doesn't matter, if you reinvested them or not they should still be counted in your ending numbers for the year.

I know there is risk ratios, beta and all that good stuff, but I was trying to keep it simple. I was not counting your personal residence in the equation. Only that income that you have invested for some sort of yield. Where I did draw a distinction was in the percentage in stocks vers other such as bonds, reits, CD's etc. Someone, who still has a high yeild (comparitivly speaking) and has 60% in bonds, reits and CD's, we would like to hear from. Although Reits have had a wonderful run. That's why I asked for a breakdown of your investment catagories.

There are some impressive yields for these times I see, and I would like to hear more from these people. I will go back over the posts now and pick some of you out OK.
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Re: Your TOTAL % return so far this year and last year.
Old 10-18-2006, 02:48 PM   #38
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Re: Your TOTAL % return so far this year and last year.

Marthjak107: You seem to have the highest rate of return at this point. I noted in a previous post that you favor managed funds as opposed to index funds. Care to share how you make your selection of managed funds? Do you follow any particular guidlines or newsletters.

Spanky: You have done well also in a 60/40 split, and only one to give asked breakdown. You sure had faith in the international market. (24.72%) Good for you. Takes some courage. Do you do mostly individual stocks, indexes or managed funds?

Ladelfina: Your numbers are impressive too. You say mostly equities, but I don't know percentage. You also say you understand the idea of index investing...but maybe I'll just have to get hit by a Mack truck before making the switch. So what are you in? Individual stocks?

Anyway thanks all for posting: Hope to get some more information from above.
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Re: Your TOTAL % return so far this year and last year.
Old 10-18-2006, 03:43 PM   #39
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Re: Your TOTAL % return so far this year and last year.

Quote:
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And remember that we have to take out enough from that portfolio to pay our taxes, too...
Those taxes better come out of that 4%, otherwise your real withdrawal rate is quite a bit higher than 4% and your portfolio won't have as good chance to survive.

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Re: Your TOTAL % return so far this year and last year.
Old 10-18-2006, 03:57 PM   #40
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Re: Your TOTAL % return so far this year and last year.

A word of caution is called for here. It is dangerous to look at very good performance over a relatively short period of time in order to determine the optimum asset allocation. What works over a given period of time may not work so well in the future, and the best thing to do is invest in a broadly diversified portfolio consistent with your desired asset allocation.

Let me give an example: If you were to conduct this same poll at the end of 1999, someone who was fully invested in emerging markets might boast a one year return of 89 percent! (eg PBEFX) And, you might conclude that emerging markets is the way to go and put all of your money there, only to lose 34 percent of your nest egg in 2000. The point is that you certainly can get great short term performance by taking on a lot of risk which may not be a good idea in the long run.

By the way, I am aware that the same fund has returned 25 percent on average over the last 5 years, but I wouldn't want to be holding it right now due to the tremendous risk involved. Be careful and stay diversified.
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