2017 YTD investment performance thread

[OldShooter]

... 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]

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]

.....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]

+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.

 

[NW-Bound]

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

Perhaps they might have included your cash already.

I have always included everything in my investable accounts, and I use the bottom line in my Quicken screen, the number that says "Net Worth". And I entered in every account that we hold, even the ones that Quicken cannot download and I have to do manual entry, such as Treasury Direct.

This allows me to see my total AA at a glance. I have always have some spare cash sloshing around in each account, and I need to know my "buying power" if/when the market crash. Of course that cash drags down on my return during bull markets, and I would be wrong to not include the effects of that "insurance".

I also do not trust Quicken's calculated returns, and do my own. Quicken has shown some silly numbers that I caught.

PS. I do not have any RE entered into Quicken. It is not applicable to my tracking of investable asset performance.

 

[audreyh1]

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

Fooling yourself how? Why does the AA of the entire nest egg matter? I only really look at the AA of the portion of my investable assets that I rebalance. I don't rebalance my entire net worth (less real assets). I know some people do, but that's not how I choose to manage our investable assets.

 

[Fedup]

My cash is supposed to be spent. But actually, I don't have time nor interest to calculate every minute thing for accuracy. I'm focusing on other stuff. Frankly I don't have a clue what we have exactly.

 

[NW-Bound]

So, I closed the first trimester of 2017 with a gain of 5.49%, calculated over every account, including the last penny in the checking account.
...
It may just evaporate next week, but so far so good.

YTD (March 31, 2017) returns for a collection of 'close-to' 60/40 funds (from Morningstar.com):

4.35% VSMGX Vg LifeStrategy Moderate Growth (60/40)
4.10% VTWNX Vg Target Retirement 2020 (57/43)
3.82% VBIAX Vg Balanced Index (60/40)
3.84% DGSIX DFA Global 60/40 I
3.45% VWENX Vg Wellington (66/34)
4.59% VTTVX Vg Target Retirement 2025 (65/35)

I have kept an eye on Wellington, but not the other MFs. Neither Wellington or myself are indexers. Last year, they beat me. This year, I am doing better so far (knock on wood).

 

[pb4uski]

Fooling yourself how? Why does the AA of the entire nest egg matter? I only really look at the AA of the portion of my investable assets that I rebalance. I don't rebalance my entire net worth (less real assets). I know some people do, but that's not how I choose to manage our investable assets.

Let's say that you have $1 million in your IRA that is is $600k in stocks and $400k in bonds and that you also have $250k in CDs outside your IRA and that the IRA earns 5% and the CDs earn 1%.

The way I do it (and I think many others) would be that the AA of that person's total portfolio is 48/52 ($600/$1,250 and $650/$1,250) and the return is 4.2% ($1m@5% + $250k@1%... or $52.5k/$1,250k).

If that person thinks that their portfolio earns 5% because they look at their brokerage statement and it says 5% then IMO they are fooling themselves because they are conveniently ignoring that they have a substantial investment in lower performing assets.

So when it comes time to rebalance I would rebalance to a 48/52 AA across both accounts.

I don't include our homes or cars or anything like that in the portfolio... like you say... just investable assets.... but would include any financial assets that we have the we plan to or could be used in retirement so taxable accounts, tax-deferred accounts (tIRAs, 401ks 403bs, etc) and tax-free accounts (Roth IRAs, HSA's, etc.) but excludes our local bank accounts that we use to pay our bills that typically have de minimus balances so have no significant impact, homes, cars, boats, etc. In some situations I can see where college funds might be carved out and viewed separately, but I chose not to.

 

[Fedup]

If I count my taxable account I would be earning a lot more than 5%. But the things about stocks, it's all paper gain. Don't get too worked up about it.

 

[Fedup]

I have kept an eye on Wellington, but not the other MFs. Neither Wellington or myself are indexers. Last year, they beat me. This year, I am doing better so far (knock on wood).

I'm surprised that Wellington doesn't do as well as the Target fund with similar AA. How come target funds have such a bad rep.

 

[Tallman4123]

XIRR 4.25% thru 3/31/17

AA 64%/26%/10%

 

[RockyMtn]

As of 3/31 XIRR is 3.93.

AA of 67/23/10

 

[Freedom56]

Up 5.4% through the end of March 2017 including interest and dividends.

 

[Sittinginthesun]

XIRR 4.4% to April 1st. 70/20/10

 

[OldShooter]

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

Different tools for different measurements. Actually, dollar-weighted return rather than time-weighted return is probably the right measuring tool for a total portfolio. (Assuming your "whole nestegg" includes the fixed income stuff)

Re AA among the individual accounts I don't worry about that either. I measure my total equity portfolio separately from cash & fixed income. It's all passive investments so I look at the full ACWI and at the Russell 3000. If you don't look at the equities separately, how do you know if your investment performance is acceptable?

If I were a trader, I would measure my trading activity separately against an appropriate measuring stick. BTDT; passive is statistically better.

I also have some special tranches for experimentation. See post #139 & @LOL!'s views on that.

 

[pb4uski]

....If you don't look at the equities separately, how do you know if your investment performance is acceptable? ....

It doesn't matter since I am only interested in total portfolio return. I compare my actual portfolio return which has a 60/35/5 AA target (and that I keep close to target) to benchmark returns of similar 60/40 balanced funds and also to a calculation of the return for a portfolio of core funds that are consistent with my AA.

So for example, if my AA was a simple 60% domestic equities and 40% intermediate corporate bonds my custom benchmark would be 60% of the total return of Vanguard Total Stock (Admiral) and 40% of the total return of Vanguard Intermediate-Term Corporate Bond Index fund. In reality mine is more complex than that since I slice and dice and my AA has 8 different asset classes and a representative core fund for each asset class. Since most of my holdings are index funds, they don't usually vary much from the benchmark return for that asset class.

 

[OldShooter]

Got it. That probably works OK with passive investments. The issue I see is that someone with active management could easily have equity investments underperforming and the bond portfolio overperforming and, looking only at a total, he would not realize that.

Re your benchmark I prefer to measure against things like ACWI and Russell 3000 rather than against another fund. Again, much more important if the portfolio is actively managed and hence has risk of falling out of bed. Also, the type of benchmark you describe tests whether you are doing the thing right rather than whether you are doing the right thing. In other words, if you measure yourself only against your own AA then you will never know whether that is the right AA or not.

 

[NW-Bound]

I'm surprised that Wellington doesn't do as well as the Target fund with similar AA. How come target funds have such a bad rep.

I don't know about target funds, nor follow them. I know that Wellington and Wellesley always have a conservative stance and have more defensive stocks.. If and when the market turns south, they will beat me soundly.

Of course, if my crystal ball is good, I would bail to cash and keep my gain. Easier said than done, of course.