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Re: YTD
Old 01-10-2007, 07:16 PM   #61
 
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Re: YTD

Quote:
Originally Posted by FIRE'd@51
Why? The Vanguard S&P 500 Index Fund had a total return of 15.6% and the Total Bond Market Index Fund 4.2%.

0.6 x 15.6% + 0.4 x 4.2% = 11%
Mostly because the majority here does not invest this way. The S&p 500 was the biggest dog on this forum for the last 3 years. Also if I was only seeing 11% returns, I might buy it. - but, we are getting much bigger numbers than this.
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Re: YTD
Old 01-10-2007, 07:18 PM   #62
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Re: YTD

Quote:
Originally Posted by Cut-Throat
Whenever I see threads like this I come to the conclusion that 90% of people have no idea how to compute annual return rates. I see a lot of double digit returns for a 60/40 stock portfolio
While the ability of everyone here to calculate an accurate annual return rate may vary, I don't think it was a real stretch to get double digit returns from a 60/40 mix. Case in point, my 48/35/17 mix returned 11.8% in 2006. 70% was invested in these three funds:

Wellesley +11.4%
D&C Balanced + 13.8%
D&C International + 28.0%

Nice and easy, like driving a Lexus!

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Re: YTD
Old 01-10-2007, 08:42 PM   #63
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Re: YTD

Quote:
Originally Posted by Cut-Throat
The S&p 500 was the biggest dog on this forum for the last 3 years.
If we have anything from the S&P500 in our portfolio it's a coincidence...
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Re: YTD
Old 01-11-2007, 05:57 AM   #64
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Re: YTD

OK, I admit I don't know if I'm calculating correctly. Could somebody please explain the proper method to me? I really do want the right figures, and have never been a math whiz. I was just going with my beginning number in 1st quarter, and using the total interest earned for the year based on my 4th quarter statement, then determining what % that interest rate was. In other words, beg. amt. X 14.58% equals the total year's interest. I used each quarter's interest increase (or loss) for the total interest amount. This does not include my contribution amounts. If this is wrong, I want to know how to do it correctly.
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Re: YTD
Old 01-11-2007, 07:34 AM   #65
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Re: YTD

The way to calculate it correctly is to enter all your transactions into a program like MSMoney, Intuit Quicken or Microsoft Excel (use the XIRR) function.
Then you got to run the right report in MSMoney or Quicken as well.

martyb, if you don't take into account contributions, withdrawals, distributions, interest, dividends, charity stock giving and the exact dates and amounts that involved all those, then your YTD is not as accurate as it can be.

Another issue with these YTD threads is that folks pick their 401(k) or their IRA or their best mutual fund or only their stock funds and report that. They ignore the $300,000 they have sitting in a 0.5% interest savings account.

After this post I expect to see all the same responses as last year. I welcome them!
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Re: YTD
Old 01-11-2007, 08:42 AM   #66
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Re: YTD

Quote:
Originally Posted by Cut-Throat
Whenever I see threads like this I come to the conclusion that 90% of people have no idea how to compute annual return rates. I see a lot of double digit returns for a 60/40 stock portfolio
It was certainly possible to get double digit returns on a 60% stock portfolio. I did (13% ROI on 57% equities). Classic Quicken ROI for 2006 that backs out any additions to the portfolio over the year but gives you credit for monies withdrawn. 57% equities included a healthy dose of REITs and international and small cap all of which had a banner year in 2006.

LOTs of my equity mutual funds did very well in 2006. REITS - > 30%, International - 20%, many US Stocks funds - 17-18%. Cash/bonds had a pretty good year too.

Gosh - even the balanced fund DODBX which nominally holds 60% equities did 13.9% in 2006.

Audrey
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Re: YTD
Old 01-11-2007, 08:48 AM   #67
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Re: YTD

If I had any money in a .5% savings account, i'd shoot myself.

I use vanguards "bank". Basically a checking account "shim" over the prime money market account in my portfolio, currently earning 5.11%. Works pretty well

I do have five bucks in a penfed savings account that I dont think earns interest. Sort of gnaws at me a little bit, but I get over it.
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Re: YTD
Old 01-11-2007, 08:50 AM   #68
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Re: YTD

Quote:
Originally Posted by LOL!
...if you don't take into account contributions, withdrawals, distributions, interest, dividends, charity stock giving and the exact dates and amounts that involved all those, then your YTD is not as accurate as it can be.

Another issue with these YTD threads is that folks pick their 401(k) or their IRA or their best mutual fund or only their stock funds and report that. They ignore the $300,000 they have sitting in a 0.5% interest savings account.
Exactly. In response to the YTD question, I've seen many people say "I made XX% in my 401(k)." That tells me they are not factoring in their checking account and other cash accounts that may have a significant impact on their overall ROI.

Also, I would venture to guess that most people do not factor in the time of their deposits and disbursements in their investment accounts which also skews the results. For example, just because one may invest money in a fund that earned 10% for the year does not necessarily mean he made 10% for the year if he invested his funds on a date other than the first date of the year. A friend told me he made 20% in a fund because that is what the fund reported for it's YTD return, but later told me he had less in that fund at the end of the year than he had started with because he had made his investment mid-year at the fund's peak.

That's why it's important to look at your personal ROI, not the fund's return.

And, it's also important to view your results with consideration to your weighted-average beta (WAB). The key would be to earn as much as possible while keeping your WAB as low as possible. And obviously, monitoring your weighted-average expense ratio and keeping that as low as possible is also important.
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Re: YTD
Old 01-11-2007, 08:52 AM   #69
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Re: YTD

Quote:
Originally Posted by El Guapo

I do have five bucks in a penfed savings account that I dont think earns interest. Sort of gnaws at me a little bit, but I get over it.
Getting mellow in your old age? Or just losing a step?

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Re: YTD
Old 01-11-2007, 09:00 AM   #70
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Re: YTD

Surely you jest...
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Re: YTD
Old 01-11-2007, 12:34 PM   #71
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Re: YTD

Picky, picky... :P

And don't call me Shirley!!
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Re: YTD
Old 01-11-2007, 01:06 PM   #72
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Re: YTD

Quote:
Originally Posted by audreyh1
LOTs of my equity mutual funds did very well in 2006. REITS - > 30%, International - 20%, many US Stocks funds - 17-18%. Cash/bonds had a pretty good year too.

Gosh - even the balanced fund DODBX which nominally holds 60% equities did 13.9% in 2006.

Audrey
I agree that a double digit return for 60/40 is doable. The coffeehouse portfolio (60/40) returns more than 15% for 2006.
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Re: YTD
Old 01-11-2007, 01:19 PM   #73
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Re: YTD

Quote:
Originally Posted by Spanky
I agree that a double digit return for 60/40 is doable. The coffeehouse portfolio (60/40) returns more than 15% for 2006.
That's pretty much my IRA. Only more international, less reits, and more like 65/35, but you ge the idea. It got me slightly over 14%. Yea coffeehouse!! I did not figure my whole port, because I sold "I" bonds, used money, added here and there. It WAS up over 20%, but of course that is not accurate so I did not say that. And it's too much like work to figure it all up just to post here. It does sound like everyone had a good year though, no matter how it was figured. Lets hope 07 does as well..........Shredder
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Re: YTD
Old 01-11-2007, 03:57 PM   #74
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Re: YTD

I was only trying to figure the return on my 401k, not all of my entire financial holdings, of which there aren't really any . My main retirement funds will be two cola'd pensions, and I'm not carrying anything significant in either checking or savings that I'd want to add to the mix. I'm only looking at the 401k. Therefore, what's wrong with the way I figured my ROI for ONLY the 401k? If it's not exact, isn't it pretty close? I mean, if it's in reality say.....14.24% instead of 14.58%, I'm not too worried about it since I'm pretty much a passive investor and what I REALLY wanted was a big number I could use to rag on some of my co-w**kers who I know for sure are keeping their money under their mattress or at best in the super-safe govt. TSP G fund where they might not even break 5%! I just wanted a little braggin material at the watering hole ! If I really earned 14% then I'm happy as a clam.
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Re: YTD
Old 01-11-2007, 06:18 PM   #75
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Re: YTD

Quote:
Originally Posted by martyb
... what I REALLY wanted was a big number I could use to rag on some of my co-w**kers who I know for sure are keeping their money under their mattress or at best in the super-safe govt. TSP G fund where they might not even break 5%! I just wanted a little braggin material at the watering hole ! If I really earned 14% then I'm happy as a clam.
How many folks would really say anything about their return at the water cooler? I certainly would not. Who wants to set up a new poll on that?
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Re: YTD
Old 01-11-2007, 06:41 PM   #76
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Re: YTD

I didn't mean it literally, but it's true that among the group of people I work with, and most of the people I associate with outside of work, I'm the only one who really seems to be taking retirement seriously. I do my best to talk to the ones who are receptive about how they should consider being more agressive with their 401 investments, IRA's etc. I know people who are in their 20's and are putting just 5%-10% into their accounts, and are then tying it up into funds earning ~5%. This includes my supervisor. He gave me a speech once about how I might earn more on my investments in an individual year or two, but overall, for the long haul the safe, steady good 'ol govt. G fund was the winner. What a boob! This guy is responsible for multiple millions of dollars in equipment, personnel & other resources and he's dumb as a rock in this dept. Similar situation with others too. I know several who are in their 50's and will be retiring within 2-5 years who, in spite of having the means to invest substantial income into their 401's & other places, are basically leaving their lives to fate after they retire. I suspect I'll be seeing most of them working at the local Home Depot or Wal Mart when I go into town looking for a new widget, gas grill or riding mower with umbrella and beer keg attachment. These are people who do not have the benefit of the same pension plan I'm under, they are under a different, newer system that is much less generous & relies heavily on employee participation in the TSP/401k program. I worry about them, but all I can really do is try to gently explain things to them without being pushy. With my boss, though , I really wanted to rag on him about the numbers today! Today's the first time I've ever mentioned my annual return rates to anybody at work, because it's the first time I've ever figured them up as an annualized return. Don't know why, I just never did.
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Re: YTD
Old 01-11-2007, 07:30 PM   #77
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Re: YTD

At a company meeting, I expressed that I had gotten very decent returns from the 401(k). Our CEO then asked me in an e-mail which funds I was invested in and why. A week later I was appointed to the 401(k) fund selection committee.
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Re: YTD
Old 01-12-2007, 01:40 AM   #78
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Re: YTD

Quote:
Originally Posted by Cut-Throat
Whenever I see threads like this I come to the conclusion that 90% of people have no idea how to compute annual return rates. I see a lot of double digit returns for a 60/40 stock portfolio
Okay, I don't know if I am figuring out my returns correctly either. What I did was add up all of my account balances at the beginning of the year (January 1) and add up all the balances of my accounts at the end of the year (December 31). I also subtracted all non-investment income such as pensions and rental income from the year-end total so that the return was not skewed upwards. When I subtracted the beginning year total from the year-end total and then figured what percentage that figure was of the beginning year amount, that's the return I came up with. (Example: January 1, $100,000. December 31, $120,000. 120,000 minus 100,000 = 20,000 divided by 100,000 equals 20%. ) I know this is not as accurate as possible, but close enough for me. Maybe those of you who use all those sophisticated financial software programs think this is "fuzzy math". I also used this same "fuzzy math" to come up with my -41 (yes, that's minus 41%) return for the year 2000 during the tech bust, as I had mentioned in a previous post.

The bulk (96%) of my portfolio is in my Schwab taxable account and Schwab IRA account. YTD return as of 12/31/06 shows 18.73% and 17.99% for the taxable and IRA account, respectively. So, my 17.85% return for my entire portfolio doesn't seem too far off the mark.

I have no reason to doubt other posters who had returns approaching 20%, especially if a large percentage of their portfolio was in favored large cap domestic and international equities, REITs and Energy, all of which had very good returns last year. Cut-Throat, I myself was quite surprised by my high returns this year. But, as I had mentioned in a prior post, when you are over 90% in equities with a good percentage in international/emerging markets, some good REITS, and no bonds, you have to expect a tremendous amount of volatility from year to year, even from day to day. Who knows what 2007 will bring. I'm not so optimistic but will be happy if I can stay in positive territory. If I get a negative return, I won't be ashamed to admit that either.
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Re: YTD
Old 01-12-2007, 09:56 AM   #79
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Re: YTD

I had 41.2% return in my stock portfolio for 2006 not including dividends. Sadly it is only 38% of total holdings. Those await statements from 5 brokerages and I expect it will be somewhat under 15%. Still a fabulous year (gotta love that rising tide) compared to our target of 7%.

I am expecting to give some of that back in 2007 (in fact I already have).
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Re: YTD
Old 01-12-2007, 01:37 PM   #80
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Re: YTD

OK, Vanguard tells me my total return for all my accounts, which includes all of my retirement funds and most of my kids' college funds says my 1 year return is 16.0%. I'm pretty sure that's an IRR-style calculation.

Vanguard says VTSMX was at 15.51% and VFINX was at 15.75%, so I somehow got an extra boost from the particular timing of my contributions and withdrawals.

I do have my emergency fund in a savings account earning 5.35% APY, but I thought the point of this kind of thread was to just look at investment portfolios, not total assets.

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