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Happy new year to everyone.. Any one finished in the + ytr for 2018?
We are approaching retirement, do not have pensions so will have to live on these accounts. We are mostly in cash, thankfully.
Via Personal Capital......
Until 11/30 I was +3.31 across all accounts.
As of 12/31 I was -2.29 across all accounts. Rough December!
Not that I care about benchmarking to an index, but as a data point, the S&P was -6.24 for 2018 so I'll not complain.
I reamain 90%+ in mostly US equities, but adding much more into value names/sectors for 2019 as I continue to deploy cash into quality dividend payers and growers.
2019 portfolio quite similar to 2018 portfolio. A few of the holdings have changed due to some year-end tax loss trades. A little more conservative overall for 2019 for both bond and stock holdings. Still about 50% in stocks. Portfolio updates almost complete.
I am down 8-9% but that includes yearlong cashflow and part of a wedding party, so I have not parsed it properly.
It is striking to me that CAPE (down <3%) did so much better than QUAL and all similar value-oriented SP500. <i>NOTE --- except for VIG, mentioned by DS today in his column, which beat CAPE by a hair.
PONAX and JABAX finished about the same, up a hair. I should not have been 2:1 (ratio growing over time) in DSEEX and PONAX.
Helping this year was a good slug of $$ that came out at the end of June and went towards a new car. For the remainder of the year I treated that $$ as “cash” for computation purposes. Had that major purchase not occurred, the year’s return would have been a bit lower.
Complicating things were two Roth IRA transfers. The money was in the mail for about 2 weeks winging its way from one custodian to another. Markets were very volatile during that period. The last chunk arrived at TRP Monday where it went into RPGAX. When the dust settled, my balanced funds sat at 38.2% - slightly above the point that would trigger a rebalance into that segment. Gave it some thought - but decided to put-off any rebalancing for at least 3 more months.
Worst: As usual, the “real assets” group (10%) fared worst, with the 4 funds all down more than 8%. The gold fund lost the most on a % basis - despite seeing a nice bounce late in the year. Terribly disappointing was OAKBX which I have now completely vacated. It fell around 8.5% - worst among the 5 (now 4) balanced funds I own.
Best: Best performers were mostly income funds (TRBUX, DODIX, DODLX, RPSIX).
In addition, Price’s PRWCX gained a half percent. Oppenheimer’s Fundamental Alternatives (QVOPX) lost only about 2%.
5, 4 different balanced funds? To my mind they serve roughly the same purpose. Their portfolios may differ by an individual stock or 2-3-4 and their bond holdings likewise but at the end of the day they just seem similar to me. What am I missing? Thanks.
- Investing directly with the fund houses instilled in me a discipline I might not have had over those years were everything under one brokerage (like Schwab) where I could just sit down at 12 AM some night and start moving everything around. Today I doubt that would happen anyhow - but 20-25 years ago might well have.
- Today, the main benefit to me is in spreading management risk around. D&C and TRP are both terrific houses. But, they are much different in corporate structure, types of offerings, fees, and overall approach. Since I count PRPFX among my “balanced” funds, there’s one more unique approach not offered by TRP or D&C.
- I’ve done a series of Roth conversions over the past 10 years. Easiest approach is to convert 100% of assets at one fund house. Since there’s a 5-year holding period for tax purposes (too complicated to explain) it’s better not to co-mingle those different Roth IRAs for the first 5 years.
- Don’t overlook the point that it is sometimes beneficial to have other options. If one manager starts to stink (ie Oakmark) they’re holding only a relatively small portion of your holdings. You have other (similar) funds you are already familiar with and can easily shift into.
- Besides DODBX and PRPFX, I have two balanced funds at TRP - RPGAX and PRWCX. In that case it’s more related to wanting to hold both a domestically and internationationally oriented fund. It’s worth noting that the balanced funds now constitute most of my equity exposure. I stopped investing in plain vanilla stock funds a year ago for age related reasons.
Edit - @Mark I’ve just noticed you specified 10 years. I doubt you gain much. I’m the “jittery investor” type. 10 years feels like an eternity (and may well be). I do think that over the very short term this type of diversification smooths out some of the bumps. But, hell, I’ve long said that very long term (read young) investors would do well to own 1 or 2 good growth funds and than do a lot of fishing.
Hope that satisfies inquiring minds. In no way is it intended to constitute advice or instruction to others.
Is the -2.29% you reference a TWR of your accounts (which is the only figure that would be suitable to comp vs an index return)? Or is that just the change in value of your accounts and there were additional contribution made throughout the year?
-2.29 is the return of the account )with all things reinvested) according to Pers Cap. I hold mostly US div stocks plus an uncomfortably large cash pile that I'm continuing to put to work ... my funds range from a suite of American Funds in my long-long term account coupled with a mishmash of 5-7 in my more active and/or deferred accounts. BTW funds are *not* the majority of my total holdings -- individual stocks are.
Do you find America funds useful for long term.... Thought their fees are high plus you gave to pay preload or postloads
Yes, I do. We ended up paying the load on them but have long since recouped those costs and they've performed quite well since '06 when we first got them. Capital Group is a very conservative firm with a sound consensus-based investment culture. Most of the AFs I hold are in my long-long term account that rarely gets touched ... and my university 403(b) at TIAA is 100% in RWMGX (AF Wa Mu R-6).
Their A-share fees are mid-range (mostly .50-80) but you pay the front load. Their F-1 share fees are fine, imho, and you can buy them w/o load at retail brokerages... though I hate they still charge a 12(b)-1 on them.
Intend to cost-average my way back to stocks in 2019 while enjoying the roller coaster ride. Gonna buy S L O W L Y. Further corrective market action would be beneficial.
The only bonds being purchased will be via VWELX.
Currently at an overall allocation of 62/38.
Did take $10k out for a new car though.
Best was Square/SQ +61%
BEst fund: CLMAX +7.6
Worst: MPACX -16.3 thankfully only about $3000 in there.
Brokerage (50% of assets): mostly dividend growth stocks, (2.90%)
Roth (45%): income CEF's and DG stocks, +1.09%
Mutual Funds (5%): (4.96%)
Yes and No.
If you view a new car, house or major home improvement project as an "asset", than converting an over-appreciated asset (i.e. an overvalued stock or fund) into one of those other assets might be viewed as a smart investment decision.
That new car might have cost tlmtlm about 80% as much as it would have had he waited to raise the necessary cash after his mutual fund holdings had dropped in value by 15- 25% from the year's highs. In effect, he "went to cash" with a portion of his over-appreciated fund holdings at an opportune time.
During a period of very low equity valuations (like 2008) the same process might have worked in reverse: Take out a big mortgage on a home at artificially low interest rates (near 3%) and convert that home equity into stocks or funds selling at a 25-35% discount.
You should think of your investment returns like it is its own fund. Mutual funds cannot consider any inflows or outflows as part of their return. They are TWR, easy as that. That's the way any investor should look at it, no questions asked. Any other way you aren't able to compare apples to apples.
Best was IHI,up 15.4% which I just added to today, down quite a bit last couple of days
Worst was FRBAX down 17.5% which is banking sector, but not a significant holding in portfolio
Brokerage account (19% of assets) up 1.9% (holds mostly bonds, muni bond 40% of total)
Traditional IRA (27%) down 5.9%, which is 70% equities
Roth IRA (54%) down 5.4% which is 80% equities.
Largest holdings are VOO and VDIGX in both iras, but small caps and intl, like most folks, was a big drag,
The iras are admittedly fairly aggressive for my age, but these will not be tapped for a while, and recently sold 1/3 of IWIRX, all of OSMAX,to raise some cash and T for a tax loss, probably rebuy T after 31 days. Today opened a position in ARTJX to replace OSMAX, but will add over time. Also opened a position in GQGPX which I sold 6 months ago, but decided it was time to add it back, its primarily emerging markets, and I like the manager, have his other fund GSIHX. Finally, sold GIBIX in brokerage account and proceeds went PONAX and PTIAX, better yield. but kept GIBIX in my ira.