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I am well ahead but I don't think by 170% and I don't think most of us are even if we are knowledgable.. My reason for failing is that I decided my asset allocation was too aggressive and while I became sort of fully invested in May 2009 I became fully invested in an asset allocation that had 60% in stocks (40% US, 10% developed international and 10% in emerging markets instead of the 80% I had in Oct 2007. Another factor was that I relied in part on past performance and continued to maintain until recently a 10% position in emerging market stocks and bonds which was not a great decision. On the plus side I have more in High Yield than treasuries but that could prove wrong in the future and I am watching the high yield position closely Not to run away with the thread but perhaps others could talk about how they went right or wrong
I run an asset allocation model portfolio so I don’t have 100% of stock market risk. With this, I am not up the 170% of the market since 2009, but, I am ahead of where I was on the time line of 2008 before everything went to heck. In addition, I took some distributions form the portfolio to fund part of a college education for my son including paying towards the cost associated with getting his masters, maintaining the old home stead since my parents had recently passed ... and, to enjoy some other things with the wife and family.
So, by my measure, I am indeed ahead ... and, so is my principal value from its 2008 high water mark. My late father, told me I could only spend principal for health, education and welfare. If, I wanted the finer things in life I was free to spend what I earned off the principal that he left me. And, I have; but, I earned that sum in order to do it.
Just goes to show one ... that you don't have to beat Mr. Market to enjoy life.
The ~200% S&P 500 total return gain, I quoted, is derived from Yahoo's adjusted close price of VFINX.
Date,Open,High,Low,Close,Volume,Adj Close 2014-03-07,173.75,173.75,173.75,173.75,000,173.75 2009-03-09,62.65,62.65,62.65,62.65,000,56.61
173.75/56.61 = 306.92%
Just checked the Yahoo adjusted close price of SPY. Date,Open,High,Low,Close,Volume,Adj Close 2014-03-07,188.96,188.96,187.43,188.26,117460500,188.26 2009-03-09,67.95,70.00,67.73,68.11,379905300,61.32
188.26/61.32 = 307.01%
A slightly higher return of 0.09% for SPY over VFINX might be due to the ER difference (0.17% for VFINX, 0.09% for SPY).
While this number is a good promo for the Walk Street Casino as the lottery blurb "see what a dollar can get you" is to appeal to greed and wishful thinking, what is more relevant to an average investor with various strategies and risk tolerance is how is your portfolio doing since the top of 2007 (edited to correct)?
Total stock market with dividends is up about 47% and total bond market about 14%, so a 60/40 split should have gained about 34% total for about 6.5 years of investing. That is real life. (And this is without counting new capital put in unlike what Fidelity does to publish their misleading 401k aggregate increases)
Strategies that limited downside may have done as well or better as those that stayed in all the way through. People who panicked or didn't have a plan likely did much worse.
I'm happy I'm not. I know for sure I will not be down 50% again. I'm happy to be in situation where I am comfortable with what I own and keep adding to my least performing funds when I can.
Comments
Not to run away with the thread but perhaps others could talk about how they went right or wrong
So, by my measure, I am indeed ahead ... and, so is my principal value from its 2008 high water mark. My late father, told me I could only spend principal for health, education and welfare. If, I wanted the finer things in life I was free to spend what I earned off the principal that he left me. And, I have; but, I earned that sum in order to do it.
Just goes to show one ... that you don't have to beat Mr. Market to enjoy life.
I am indeed a happy camper.
Old_Skeet
Date,Open,High,Low,Close,Volume,Adj Close
2014-03-07,173.75,173.75,173.75,173.75,000,173.75
2009-03-09,62.65,62.65,62.65,62.65,000,56.61
173.75/56.61 = 306.92%
Just checked the Yahoo adjusted close price of SPY.
Date,Open,High,Low,Close,Volume,Adj Close
2014-03-07,188.96,188.96,187.43,188.26,117460500,188.26
2009-03-09,67.95,70.00,67.73,68.11,379905300,61.32
188.26/61.32 = 307.01%
A slightly higher return of 0.09% for SPY over VFINX might be due to the ER difference (0.17% for VFINX, 0.09% for SPY).
Total stock market with dividends is up about 47% and total bond market about 14%, so a 60/40 split should have gained about 34% total for about 6.5 years of investing. That is real life. (And this is without counting new capital put in unlike what Fidelity does to publish their misleading 401k aggregate increases)
Strategies that limited downside may have done as well or better as those that stayed in all the way through. People who panicked or didn't have a plan likely did much worse.