Total Portfolio ROI - January 2007

[retire@40]

January wasn't too strong, but at least I was still in positive territory.

I factor in ALL "liquid" investments including all cash, bonds, and equities using a weighted average formula I have set up in a spreadsheet, so updating it takes just a few minutes a month. I don't include my home.

My cash portion actually gave me a boost up last month since my equities performed at less than the average.

Total annualized return for January 2007 was only 3.54%

 

[2B]

January wasn't too strong, but at least I was still in positive territory.

Total return for January 2007 was only 3.54%

If you make 3.54% every month, you will certainly be retiring early. And you said January wasn't too strong?

I was up 1.43% in January and I thought I had a pretty good month.

 

[retire@40]

When I calculate my numbers, I always do them on an annualized basis. I made the correction to my original post to clarify that.

 

[Alan]

Annualized after January's numbers are in I am running 1.47%/year and am satisfied with that.

 

[2B]

When I calculate my numbers, I always do them on an annualized basis. I made the correction to my original post to clarify that.

I think you need to look into your asset allocation. January was a pretty good month for equities.

 

[retire@40]

I've got a 67/33 split. The S & P 500 only returned 1.50% (annualized) in January.

 

[SonnyJim]

I'm up 1.5% for january. Was talking to my old CFP and told him my return for jan and he said he had taught me too well. He was happy for me.

I was talking to him about my method using indexes and he told me I was not comparing them fairly with other managed mutual funds because of the weighted risk, then tried to explain the use of Sharpe's (sp?) score. My eyes glazed over at this point. Then he was talking to my mathematician DW about using the candle string method for trading equities. Very interesting conversation, anywho he picked up dinner and DW in energized about investing again.

 

[cute fuzzy bunny]

Stankin' 3.1%.

 

[2B]

Stankin' 3.1%.

Annualized?

I'm up 1.5% for january.  Was talking to my old CFP and told him my return for jan and he said he had taught me too well.  He was happy for me.  

I was talking to him about my method using indexes and he told me I was not comparing them fairly with other managed mutual funds because of the weighted risk, then tried to explain the use of Sharpe's (sp?) score.  My eyes glazed over at this point.  Then he was talking to my mathematician DW about using the candle string method for trading equities.  Very interesting conversation, anywho he picked up dinner and DW in energized about investing again.

You spelled it right.  It is computed by taking the actual return minus the "risk free" return and dividing it by the standard deviation of the portfolio during a certain time period.  It's been debated for decades whether it means much other than as a tool to discuss why your portfolio tanked after the fact.  "Past performance is no indication of future results."  Your CFP was doing a bit of a snow job.

I've heard of candles but I've never heard of candle string trading even though I'm a reformed technical trader.  All of the studies show that the more you trade the less your return.  Engineers, science and math majors are all very suseptible to technical analysis and it doesn't work.  That's by my experience and every study that ever looked at it. 

I do run across people that swear by it but none of them were making millions in the stock market.  Lots of brokers and investment advisors talk about how they use it to make their clients rich.  If it really worked, why would they waste their time dealing with clients.

If your former CFP picked up the check, he's either your father or plans on getting more business from you.  Take care.

 

[Animorph]

Quicken says my annualized rate of return for January was 8.34%. The actual January gain was 0.68%. That looks self consistent at least. Not that one month says anything worth paying attention to, but there were some weird sounding numbers being thrown out here.

Dan

 

[JustCurious]

I think many of you don't understand what "annualized" means.

If I start out with 100k on December 31, 2006, and I end up with 101k on January 31, 2007 (let's assume I made no contributions to keep the math simple), then my return was 1% for the month of January. But, my annualized return was 12%. In other words, if I extrapolate the same rate of return over the whole year, my annual return would be 12%.

 

[retire@40]

Quicken say my annualized rate of return for January was 8.34%.

What fund in your mix gave you an 8.34% (or greater) rate of return?

 

[JustCurious]

Retire@40, you don't understand. The 8.34% figure is an "annualized" figure, not a January return figure. Please read my previous post. The January return was .68%

 

[retire@40]

Retire@40, you don't understand. The 8.34% figure is an "annualized" figure, not a January return figure. Please read my previous post. The January return was .68%

Ok, then let me rephrase my question. What fund gave you the highest annualized rate of return and what was that annualized rate of return?

 

[Animorph]

As JustCurious stated, that would be 8.34% if the January gains continued throughout the year. I only made 0.68% for January. I'm about 50% foreign, and heavy on small cap, energy, health. I'm just switcing from stocks to funds, so my asset allocation is a bit fluid for the next year or so.

Dan

 

[2B]

Ok, then let me rephrase my question. What fund gave you the highest annualized rate of return and what was that annualized rate of return?

My Vanguard Small Cap was my big hero up 2.36% in January. Vanguard Total Stock Market was up 1.37% in January. Both returns are according to my Quicken.

 

[JustCurious]

Retire@40, please understand that an "annualized" rate of return is a fiction. It assumes that the return for the rest of the year will be at exactly the same rate as it was in January, and this will not happen. So asking someone for their annualized rate of return in January is really quite meaningless.

 

[cute fuzzy bunny]

Annualized?

No.

 

[Animorph]

retire@40:

This ought to stir things up! Below are the best and worst returns for the funds that I just held through January:

My best fund was Wasatch International Opportunities Fund up 53.45% annualized.
My worst was Prudent Bear (caught me market timing!) down 15.32% annualized.

One fund I had for only about a day in January reported a 400%+ annualized gain, which is why it is difficult to make much out of annualized numbers for periods of less than a year. I probably had a 1% gain in that fund in one day and the annualized gain assumed that would continue for a whole year.

Dan

Edited to insert another "annualized" after 400%+

 

[Cut-Throat]

Retire@40, please understand that an "annualized" rate of return is a fiction. It assumes that the return for the rest of the year will be at exactly the same rate as it was in January, and this will not happen. So asking someone for their annualized rate of return in January is really quite meaningless.

No! - A.P.R. is the benchmark! - Whether you are talking about 1 month, 6 months, 1 year or 10 years!

It's all fiction - It's an average - And that is what it is supposed to be!

 

[retire@40]

Retire@40, please understand that an "annualized" rate of return is a fiction. It assumes that the return for the rest of the year will be at exactly the same rate as it was in January, and this will not happen. So asking someone for their annualized rate of return in January is really quite meaningless.

I don't think it's meaningless, but I realize this early in the game it doesn't mean as much as it would in the 11th month.

 

[retire@40]

My best fund was Wasatch International Opportunities Fund up 53.45% annualized.

So is the YTD amount below an annualized rate or not? If it is, it's reporting much lower return than you are.

 

[Animorph]

The year to date from Yahoo is not annualized. It is just the simple return. My portfolio equivalent was the 0.68% number. I suspect that's what most of the numbers discussed here really are. In which case, I'm doing much worse than everyone else!

Dan

 

[TromboneAl]

I recommend that we always used annualized numbers when reporting returns on this forum, and also say that they are annualized.

My annualized return for Jan was 12.97% for a very boring 60/40 with much of the equities in the 500 index and total stock market index.

What a great market we've had this last year -- shouldn't take it for granted!

 

[mickeyd]

From my experience and from a number of articles that I have read on the subject, leads me to believe that doing calculations monthly can often be counterproductive to a long term portfolio as it may move you to make trades that try to adjust your stash, but only on a very short term window (1 month). I only calculate my returns annually so that I get to view it with a more time-adjusted span (12 months+). That said, if I were calculate my numbers on a monthly basis, I would probably not make any more trades than I do.