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sschullo

2017 Quarter 1 Ytd Returns. What's Yours?

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It's that time of the year to report your returns.

As most of you know, I have a conservative portfolio because I will be 70 years old in July, and I need to make regular distributions to fund my retirement. My teacher's pension plan only covers 49% of my teacher's salary. I cannot afford the risk of an aggressive plan. But since 2004, I didn't need to.

 

I have saved a ton of money on fees. My current portfolio with Vanguard and TIAA costs .07%!

Below is a breakdown of my holdings, returns on each index or fund and the weight in my portfolio. Stock/bond split is 32% stock / 68% fixed or cash.

 

 

% Return % Allocated

 

Vanguard Total Intl Stock Index Admiral 8.47% 7.42

Vanguard Total Stock Market ETF 5.68% 14.82

Vanguard Extended Market Index Admiral 4.56% 5.19

Vanguard Wellesley® Income Admiral™ 2.21% 13.19

Vanguard Total Bond Market Index Adm 0.92% 33.82

Vanguard Prime Money Market Investor 0.20% 0.95

Vanguard Total Intl Bd Idx Admiral™ -0.03% 8.05

TIAA Stable Value 3.0% annual/4 quarters 0.75% 15.68

Treasury Direct iBond 0.60% 0.89

 

YTD Q1 Return 2.49% 32%/68%

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By the way, did you notice that my Total Bond Market Index is up by .92%. For years the media pundits have been warning about bond values crashing with interest rates go up. After three interest rate hikes, my largest bond holding fund is up .92%. My international bond is only down by .03%. Not the end of the world.

 

Just last fall I transferred about 20% of my fixed account money back to TIAA with its guaranteed 3.0% return in its traditional annuity, a fund I had over a decade ago when I was teaching.

 

The point is to construct a plan you understand, are comfortable and then stick to it no matter what anybody says, or what the market does. If your risk tolerance is low like mine, take precautions now and allocate the stock/bond split that accommodates your risk tolerance.

 

Steve

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I use Personal Capital to aggregate my accounts, but one of my accounts has not been updating for more than a month, so I don't have an exact figure. Portfolio is roughly 75/25, with a fair commitment to int'l and REITS. Up approximately 3% YTD.

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77% Stocks/19% Bonds/4% REITs. 5.42% YTD.

 

I also just opened a ROTH IRA with Vanguard, 100% stocks. Our accountant--who is very risk averse--told me to just sit on any extra money I had. I'm 60, retiring in two years and have been contributing the max (or close to it) to my 403b for a few years, and 20% of my income for several years before that. I had some savings, and figured, why not grow it while I still can? I plan to contribute the max to both my 403b and IRA until I retire.

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Steve--you might want to check your chart of returns: the TIAA stable value fund is 3% annually, not YTD, right?

 

Thanks whyme, I added the quarterly return of TIAA at .75%.

 

I have a question for you.

Did you finish updating your portfolio? So far, what you posted doesn't make sense.

My international index is up 8.47% with a small allocation of 8.42% of my total portfolio. You say you have fair commitment to internationals.

 

Also, overall you have 75% allocated to equities, which is aggressive.

My total stock market index is up almost 6.0% alone.

 

This may not be a 100% apples to apples comparison, but still it is equities, and for that alone your YTD return should have been twice as high or more. What do you think caused your return to be only 3.0%?

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Hi, Steve. My portfolio is over-complicated, spread around several vendors, partly due to old accounts hanging around and partly to the changing 403b and 457 provider availability with my employer. So it's hard to see the YTD performance details clearly. Personal Capital is a nice free service, but they don't always sync up accurately, as has been the case for my Calstrs Pension2 account for the past month. I'm slowly consolidating accounts at Vanguard—am in the middle of one of those moves right now—and I sold off some of my too-large Berkshire Hathaway position earlier this year (my only remaining individual stock) so that adds to the complication.

 

Basically, my 75% equity is in a small and value "tilted" portfolio, with about half as much international as US. I have REITS in there as well, which may have dragged performance down this year (I think the Vanguard REIT fund is up less than 1% YTD). If I look at my Vanguard accounts only (which constitute most of the portfolio, and in two out of three cases have received contributions this year), they show a first quarter profit of 4.35%, 3.79% and 3.48%. (I think the bonds I have—short and intermediate term— are down a bit YTD.) Like you, I have about 15% of my portfolio in a stable value fund, which also reduces the total growth. The overall value of my accounts has never been higher, so I'm not really motivated to dig deep and focus on whatever underperformed the past few months.

 

FWIW, Vanguard shows my accounts as up 14.3% over the last year (not YTD, but back to the end of Q1, 2016).

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Hi whyme,

 

Complicated its right! But you have to deal with what is available from your school district, and that you cannot do any rollovers until 59.5 or when you retire.

 

REIT is another sector along with Gold and precious metals that I avoid, they are just too narrow IMO, and besides the total stock market index has real estate related companies and precious metal mining companies anyway.

 

I sold off my last individual stock two years ago, Minnesota Minning and Man. at $166, and yesterday it is trading at $191.00. Of course, I wished that I hung on to it, but that's why I avoid individual stocks because MMM had gone up from about $60 to $166 in the last decade. I am too old for speculation and g ambling with individual stocks. I had already won the game. I learned during the tech bubble that when you win the game, stop playing. Heck, I paid nothing for the stock. What the heck do I want, more and more? Bill Bernstein wrote about winning the game, and getting out! Great advice. He is a smart man to which I read many of his books.

 

It was a stock with a lot of sentimental history, as you might remember that I learned from my assembly line working mom about 3M stock, and it was THE stock that I had inherited 50-60 years later! Mom bought it back in the 1950s and 60s!

 

When you retire, you can consolidate and construct a simple portfolio Vanguard and TIAA and lower your costs to as low as what I pay .07%. BTW Vanguard continues to lower costs!

 

Have a great day,

Steve

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Good advice, Steve. I'm looking forward to the time that the great bulk of my investments are in one place in a stable portfolio. But I'm happy to be making new contributions so long as I'm working, even given the complications and unavoidable fees for 403b and 457 accounts.

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5.88% YTD

 

54.4% US Stocks

21.53% CASH

9.59% INT Stocks

7.94% Real Estate

5.85% US Bonds

.38% Commodities

.32% INT Bonds

 

Bond allocation is low due to $275K sitting in two separate deferred fixed annuities (inherited) earning 3% that is not part of the calculations above.

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4.82% in Q1

 

I am thinking I might not see a quarter like that again for a while.

 

54.15 US Stocks

21.62 International Stocks

16.03 US Bonds

8.2 REITs

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4.82% in Q1

 

I am thinking I might not see a quarter like that again for a while.

 

54.15 US Stocks

21.62 International Stocks

16.03 US Bonds

8.2 REITs

 

Hi Saab,

Your thoughts about your comment.

Steve

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