2014 Investment Returns

[jon-nyc]

7.38% using XIRR

[audreyh1]

Quote:

Originally Posted by bingybear Wouldn't bonds be the asset "bonds", not cash. I don't think I bonds would be considered even short term assets... such as short term. or am I missing something?

I consider IBonds cash, similar to say 1 year or slighty longer CDs. They are short term in that you can pull your money out after a year with a 3 month interest penalty, no penalty after 5. And like cash there is no drop in value if interest rates rise. No credit risk.

We keep part of our portfolio cash in IBonds.

[blenhardt]

6.9% on conservative AA that includes 28% cash. We are retired and just trying to preserve what we have and gain a little above inflation.

[REWahoo]

8.6% on a 45/45/10 portfolio.

[imoldernu]

A little over 5%.... about the same as the past 10 years, and for the foreseeable future.
Not smart about money.

[bingybear]

Quote:

Originally Posted by audreyh1 I consider IBonds cash, similar to say 1 year or slighty longer CDs. They are short term in that you can pull your money out after a year with a 3 month interest penalty, no penalty after 5. And like cash there is no drop in value if interest rates rise. No credit risk. We keep part of our portfolio cash in IBonds.

we all can define things differently, and I'm not the one to decide right and wrong. I have I bonds with current rates of 4.91% and EE bonds at 4%. If I called this cash... I'd have to say my cash is performing quite well. These perform so much better than my checking, MM, or savings account that I have trouble seeing them as cash from my perspective.

I guess we just see things differently. Hopefully the above provides some insights to why I questioned it. I do agree that they have nice withdraw policies.

I still have way too much cash... even more so with EOY selling that I have not re-positioned yet (my def of cash).

sorry for the confusion.

[audreyh1]

Quote:

Originally Posted by bingybear we all can define things differently, and I'm not the one to decide right and wrong. I have I bonds with current rates of 4.91% and EE bonds at 4%. If I called this cash... I'd have to say my cash is performing quite well. These perform so much better than my checking, MM, or savings account that I have trouble seeing them as cash from my perspective. I guess we just see things differently. Hopefully the above provides some insights to why I questioned it. I do agree that they have nice withdraw policies. I still have way too much cash... even more so with EOY selling that I have not re-positioned yet (my def of cash). sorry for the confusion.

Sure - it's just that several of us have IBonds as part of our long-term cash allocation, which is what you questioned in the first place, and I was simply explaining how we see it, as you asked what you were missing.

They behave quite differently from Bond Funds which go up and down in value every day depending on daily interest rate changes and daily credit quality changes.

There are several vehicles available for cash, including short-term CDs. MM and checking may be paying virtually nothing, but you can park cash in high yield savings accounts yielding up to 1% these days. And that is not bad at all compared to CDs and much riskier short-term bond funds.

[eytonxav]

Only 5%, alas still holding too much dry powder at 30%+

[Klubbie]

Not quite sure of how my entire portfolio did for the year as there was a ton of moving around, simplifying and combining accounts that comes from changing jobs. So here is the breakdown:

My 401K:
Approximately 45% of total portfolio
Return: 8.52%

I rolled this 401k over from a prior employer in February 2014 and it has been in Vanguard Target Date 2045 all year. So the 8.52 may be off a little from prior employer allocation, but I'll go with it.

Her 401K:
Approximately 38% of portfolio
Return: 7.16%

This is based off of Vanguard's website 1 year return for VTIVX (Target Date 2045)

Roth IRA:
Approximately 17% of portfolio
Return: 0% (complete estimate)

My Roth was a dumpster fire this year of turnover. I rolled a tIRA into the Roth and realized I had not been properly allocated. I mainly use my Roth to tilt the portfolio to Small Cap Value, REIT, Emerging Market, and International Small Cap. This year I spent a large part of the year getting my tilts set up properly as I was way out of wack previously. Regardless, the way my tilts are set up the international returns dragged down the return on my Roth pretty substantially. My Return of 0% is an estimate since I have not had a good way to track that this year, but I think it's a fair one.

So overall that gives me an estimated return of 6.55%.

Not great, but I feel really good about where I am heading into 2015. Things are simplified. I have an actual AA, and the majority of my investments are parked in a target date fund. Re-balancing is easier. Life is good.

[Alan]

Quote:

Originally Posted by bingybear Wouldn't bonds be the asset "bonds", not cash. I don't think I bonds would be considered even short term assets... such as short term. or am I missing something?

I think Audrey explained it quite well above. Unlike regular bonds, once you have held an I-Bond for a year you are guaranteed to be able to sell it at the price you bought it, plus accrued interest. Even though one loses 3 months interest if sold within 5 years it is still often a better rate of return than a MM fund, bank savings account or short term CD, and every bit as safe (unless the US government defaults on its debt).

Cashing in I-Bonds also gives me a tax credit on my Louisiana tax return which effectively ups the interest rate a little.

ETA
If interest rates rise, I-Bonds don't lose value like bond funds

[Eagle43]

7.5% on 35/65 allocation.

Sent from my AT100 using Early Retirement Forum mobile app

[audreyh1]

Quote:

Originally Posted by Alan I think Audrey explained it quite well above. Unlike regular bonds, once you have held an I-Bond for a year you are guaranteed to be able to sell it at the price you bought it, plus accrued interest. Even though one loses 3 months interest if sold within 5 years it is still often a better rate of return than a MM fund, bank savings account or short term CD, and every bit as safe (unless the US government defaults on its debt). Cashing in I-Bonds also gives me a tax credit on my Louisiana tax return which effectively ups the interest rate a little. ETA If interest rates rise, I-Bonds don't lose value like bond funds

Also, the interest rate is adjusted for inflation (CPI). That is not the same as matching current short term interest rates, but it ought to more or less track short-term interest rates over the long run.

PLUS interest earned is tax-deferred until you withdraw the funds. Which is not an option on regular CDs. It's really nice being able to let the interest paid reinvest and accrue tax free (i.e. deferred).

[GenghisKhan]

UK based investor here. 5.6% for me from a balanced portfolio covering global equities (22% UK though), UK index linked gilts, EU/UK property and a bit of gold.

One of our main indices, the FTSE100, actually finished in negative territory for the year.

[clifp]

Quote:

Originally Posted by audreyh1 Sure - it's just that several of us have IBonds as part of our long-term cash allocation, which is what you questioned in the first place, and I was simply explaining how we see it, as you asked what you were missing. They behave quite differently from Bond Funds which go up and down in value every day depending on daily interest rate changes and daily credit quality changes. There are several vehicles available for cash, including short-term CDs. MM and checking may be paying virtually nothing, but you can park cash in high yield savings accounts yielding up to 1% these days. And that is not bad at all compared to CDs and much riskier short-term bond funds.

I've wrestled with the proper place for I-Bonds for many years. It is small (sadly love them 3.5% ibonds from 2000) portion of my portfolio.

I finally developed 3 categories of fixed incomes bonds, transactional cash (i.e. money markets, checking accounts) and long-term cash (i.e. CDs, Stable Value funds, and saving bonds).

[braumeister]

I was just going through my year end numbers, and I realized that I had taken credit for something I shouldn't have.

Earlier in this thread, I claimed 18.1% return for the year. Upon final review, I found that it was actually 13.7% for my 60/40 portfolio. What happened is that I forgot about receiving payment of a very old debt from a relative that we had long ago written off.

Pro: I'm still delighted with this return.
Con: Let's not forget that my 2013 return was rather poor (only about half the market's return), so it does even out.

[Ronstar]

8.16% in taxable, 7.85% in 401k, 8.50% in IRA. All 3 around 60/40

[big-papa]

Around 7.4% 64% stock, remainder in govt bonds, tips, and a smidgen of foreign bonds. Stocks are a mix of mid-cap value and small cap value. As noted elsewhere, last year was the year of the large cap.....


Sent from my iPad using Early Retirement Forum

[MRG]

Quote:

Originally Posted by Rustward 8.9% net across all our accounts most of which are wrap accounts holding mostly managed funds, two ETFs, and 50 individual stocks.

Any front end loads to add?

Sent from my SAMSUNG-SGH-I337 using Early Retirement Forum mobile app

[Gatordoc50]

Around 8% return in taxable and retirement accounts. Around 20% appreciation of real estate. So altogether about 14%.

[Rustward]

Quote:

Originally Posted by MRG Any front end loads to add? Sent from my SAMSUNG-SGH-I337 using Early Retirement Forum mobile app

Zero front end loads - Most of these are institutional share classes. Most have minimum purchases that are seven digits or more but the brokerages are allowed to aggregate their clients' holdings to meet those very large minimums. One fund has a 12B-1 fee which is reimbursed to my account every quarter. That's it.

I was using one A share at one point because that particular fund had no institutional share class. In that case after each buy the brokerage credited my account the amount of the front end load.

Just like there are bad funds, there are some bad advisors (ours is a CFP). But they are not all bad. Our portfolio gets results in the same range as the indexers year after year. I am not saying that active management is better than indexing. But I am not saying it is worse as long as it is done correctly.

Just for fun and comparison using real money and trying to remain objective, several years ago I did a 401K rollover to an IRA that is all at [pick your favorite online brokerage]. It is setup like a basic Bernstein portfolio as described in The Four Pillars of Investing (yes, I read the books) and that account and the actively managed ones perform about the same. Of course there are some fees associated with active management that are not present in the "indexed" account, but it is not about what you may have to pay in fees, but about overall returns after you have paid any fees. No?

This is a kind of take-your-pick thing.

If anybody wants to start an active management vs indexing war, please do it in a new thread. I might even participate.