2017 YTD investment performance thread

[athena53]

UBS up 4.7%, Fidelity 4.5%. Both heavy on stocks. I have a mostly-bond portfolio of $56k at Edward Jones that's barely moved but that's to be expected.

[OldShooter]

Quote:

Originally Posted by LOL! @OldShooter, that's a nice experiment. I predict your 100% equity ploys will create something like a Callan Periodic Table of Investment Returns. Just worry about skating to where the puck was.

Oh, it's not about that at all. All of the allocations are essentially the same. The test is whether the extra costs at Schwab or at a DFA advisor can beat the couch potato portfolio, which costs me nothing to own. I'm deliberately not even bothering to rebalance it.

I am also using the couch potato portfolio as a benchmark for evaluating Morgan Stanley's performance for a nonprofit I am associated with. Over 8 calendar quarters 2015/16 the couch potato portfolio is up 8.6% and the MS "Wealth Manager" is up 2.8%. She doesn't know it but she is about to get fired.

Quote:

Originally Posted by LOL! So instead of stock picking, what about asset class picking? Or at least predicting the future near-term performance of asset classes?

It's really just another form of stock picking. By picking classes you are diversifying away individual stock risk and choosing sector risk over total market risk. IMO, though, "near term performance" is so dominated by noise that you are simply spinning one of those "Wheel of Fortune" machines that you see in Vegas. You will never know whether your results are from luck or skill. Over the long term, not considering any costs, you will probably get the market average but that long term is longer (due to the smaller sample size) than the long term it takes to get the total market return by just buying a total market fund. So you get to the same place by a longer road with more potholes. My 2c anyway.

I'm not even sure that portfolio tilt makes much sense, for a number of reasons.

[LOL!]

I agree that one cannot predict which asset class is going to do well next.

But your 3 selections do NOT have "All of the allocations are essentially the same."

Quote:

Couch Potato; 2/3 total US market, 1/3 total Int'l: 6.4% Schwab "Intelligent Portfolios" 5.7% DFA 50/50 USA/Int'l with a slight emerging market tilt: 6.2% net of 1Q 12.5bp fee

I found this video series on "Managing Expectations" full of useful ideas when thinking about all these things:

https://www.youtube.com/watch?v=RA2HGKQJSIQ

[Happyras]

Quote:

Originally Posted by LOL! Also "efficient frontier" does not mean "best return." Personal Capital touts a small-cap value overweight, but SCV did great in Nov-Dec 2016 and has taken a breather so far in 2017. Bond funds have done relatively well: Despite FFR hikes in December and March, bond funds are up 1% for the quarter and on track for a very typical one-year return of 4%. Big question though: Is it time to rebalance out of foreign into US small-cap value?

I agree totally, best return is not the only factor, it is best return with lowest risk as measured against the equity/bond allocation. Being on the curve is about as close as you can get. Apparently you can not get higher return without more risk once you have a >20% allocation to stocks, but you can get higher risk with a lower return.

I see many are quoting returns on one portfolio, but not including all their accounts with bonds. Our return is showing the full spectrum blending all VG and Fido etc., weighted for risk for all "retirement" investments. If I included our small business it would be much higher. However our equity allocation to small cap is not disproportionate to the overall market unless we count that ownership. I believe we have some room to add to small cap, but mostly we are low on international, which means selling a bit more VWENX to buy more international equities some day soon.

[Fedup]

I have no bonds, mostly cash. I still don't understand bonds. So I'm like Warren Buffet, until I do, I won't invest in something I don't understand.
I just gave my returns on what Vanguard told me. Not sure how accurate that is. I wouldn't get too work up here.

[LOL!]

Quote:

Originally Posted by Happyras I believe we have some room to add to small cap, but mostly we are low on international, which means selling a bit more VWENX to buy more international equities some day soon.

And I am thinking of doing almost the opposite. Isn't investing fun?

[Happyras]

Quote:

Originally Posted by LOL! And I am thinking of doing almost the opposite. Isn't investing fun?

It is fun! Particularly if you do not have to rely on your investments to live well. I am only considering more small cap in light of the likely tax reform impact on small business (like ours or bigger) and since it is not quite enough for my model. International exposure is just light in our portfolio based on several so called investment models and advisers at VG, Personal Cap, and Fido.

I am carefully considering this tuning to get to a perfect efficient model for risk/return. Not trying to stock pick or sector forecast, per-say. Interestingly, our Fido account, which is all equities now is matching performance to the S&P or better, but these lagged earlier due to use of target date funds with bonds.

[OldShooter]

Quote:

Originally Posted by LOL! ... But your 3 selections do NOT have "All of the allocations are essentially the same." ...

I guess that's in the eye of the beholder. They are close enough for me/I can eyeball the effect of differences. For example, the couch potato (CP) portfolio over the last 9 quarters has slightly outperformed the ACWI and slightly underperformd the Russell 3000. That's to be expected given its allocation and the better performance of US stocks in the period. I don't need to have exactly identical allocations to also see that's also why the CP very slightly outperformed the DFA portfolio over the period.

How do you know that economists have a sense of humor? ..... (wait for it!) ..... They use decimal points.

Quote:

Originally Posted by LOL! I found this video series on "Managing Expectations" full of useful ideas when thinking about all these things ...

I'm not sure I get your point. If you're saying that it takes a long time to separate the signal from the noise in stock prices (have you read Nate Silver's book?) you are obviously right. But I am comparing very similar portfolios with each other, so I believe that I can tease out a performance difference signal more quickly than 20 years. For example, the CP portfolio performance has monotonically diverged from the disastrous Morgan Stanley portfolio even as quarterly performance numbers have ranged from -6 % to +9%. I can't back it up with statistics but I think the fact they they are 6% apart and continuing to diverge after 8 quarters is signal, not noise. YMMV, of course.

[robnplunder]

I am up 3.97%, trailing the market. My winners are DODFX, FSCHX, and FCNKX. The losers are my bond portfolio & short term trades. I am cautious with the trades given where the market is. If it corrects, I will be ready. Otherwise, I will end up the year with the usual 12% - 17% gain.

Moved my S&P 500 mutual fund to equivalent ETF to reduce capital gain tax. I've lost a fraction during the transaction - sold and bought at higher point.

[LOL!]

@OldShooter, I have read Silver's book.

I am sure you will be able to show the Morgan Stanley portfolio is the worst, but that is what you want to do. You won't be able to make a judgement about the others without a longer period, but no matter as you don't care about that.

[OldShooter]

Quote:

Originally Posted by LOL! ... You won't be able to make a judgement about the others without a longer period ...

Just to make sure I was clear: I agree with you as far as making an absolute judgment of performance, but I think a couple of years is long enough to make a judgment of relative performance. I have a couple of years cumulative performance with the MS vs CP but not yet with the others. Individual quarterly performance comparisons don't mean much.

[LOL!]

And just to make sure I was clear: I don't think a couple of years is long enough to make a judgment of relative performance of your non-MS selections. But, yes, individual quarterly performance comparisons don't mean much.

Here's why: I've been comparing my portfolio to benchmark funds for a longer number of years. The relative rankings change over time. Just because "A" has the best 3-year performance does not mean it will have the best 5-, 10-, whatever-year performance if the asset allocations are similar. One can readily see this by using morningstar.com to compare past performances over multiple date ranges.

[Happyras]

Quote:

Originally Posted by LOL! Here's why: I've been comparing my portfolio to benchmark funds for a longer number of years. The relative rankings change over time. Just because "A" has the best 3-year performance does not mean it will have the best 5-, 10-, whatever-year performance if the asset allocations are similar. One can readily see this by using morningstar.com to compare past performances over multiple date ranges.

Or you can use this free web site https://www.portfoliovisualizer.com/

[texcurtis]

Assets up 3.8% YTD.

[pb4uski]

Quote:

Originally Posted by Happyras .....I see many are quoting returns on one portfolio, but not including all their accounts with bonds. Our return is showing the full spectrum blending all VG and Fido etc., weighted for risk for all "retirement" investments. ...

What do you mean by weighted for risk?

The amounts reported should not include any explicit weighting, but is implicitly weighted because it takes beginning balance, additions and withdrawals and ending balance into account. Any risk weighting is implicit in that the balances are based on a portfolio of stocks and bonds.

So for example, in my case I look at the total of my taxable, tax-deferred and tax-free accounts (brokerage, tIRAs, 401ks if I had them, Roths, HSAs, etc) which are implicitly managed to a 60/35/5 target AA... and I know the beginning and ending market values and the withdrawals so far this year so I can easily calculate the YTD return.

In my case, withdrawals are cash flows that leave the portfolio as defined above so are my monthly transfers to our local bank account used to pay or bills and any cash dividends received.

[NW-Bound]

Some people do report higher returns from one of their favorite trading accounts. This does not mean much. I have many accounts, his and her 401k's, IRAs, Roths, after-tax accounts, etc... While I keep track of the overall AA, these accounts do not have the same positions. Some may have more EM, the others more material stocks, etc...

So, I always look at the overall return, computed over every liquid account that I have. And that includes Treasury accounts, and cash accounts like checking. Doing anything other than that means I were fooling myself by looking only at a single account that has a fortuitous high return at the moment.

[pb4uski]

+1 I don't even look at the AA of individual accounts... just the whole nestegg... anything other than that is just fooling yourself.

[gcgang]

I suppose I've been fooling myself. I'm up 4.66% 1st quarter, 70/28/2. But I've got almost another 20% not held in the above account, it's cash/cds earning about 1%. So overall I'm probably slightly less than 4%.

I just use the brokerage's reporting on returns. Too lazy to add in the cash not held there.

[pb4uski]

(80%*4.66%) + (20% *1%) = 3.93%. That isn't so hard is it?

[Happyras]

Quote:

Originally Posted by pb4uski +1 I don't even look at the AA of individual accounts... just the whole nestegg... anything other than that is just fooling yourself.

Agreed, my earlier comment only meant to state that the aggregate mix of accounts is weighted for my risk tolerance for retirement portfolios, some are pure stock portfolios with a very high std deviation >15%, others are more bond balanced with a std deviation <8%.

I just think it is just 1/2 as interesting to report YTD growth, without stating some presumed target risk. The allocation is an indicator, but even better is the historical std deviation of returns. In our case the historical measured risk on all portfolios is 7.8% as a historical std dev (per portfoliovisualizer site), but is estimated higher by personal capital. The perfect fit to the curve would be an historical return of 8.2% for a risk of 11.4% volitility for a moderate allocation. I have to assume that someone reporting a high return is doing so with a high risk tolerance.

I do not include our real estate investments or privately held corporation nor any cash flow accounts related, only retirement accounts are included. So to your point, we in fact are not including all accounts as you are. I have another 8 years before I am forced to make any RMD's, so the calc of return is simple since I am retired with no contributions or withdrawals.