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sschullo

2017 Return, costs and asset allocation

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My 33%/67% stock-bond balanced portfolio returned 9.0% 

Every end of the year I post my portfolio returns, costs, and asset allocation. My portfolio is appropriate for a 70-year-old retired teacher who needs to make distributions last for the rest of my life. If you are younger, leaving your money to your children, or you don't have to rely on your portfolio because your pension is big enough, then, by all means, you can increase your risk by increasing the stock allocation to 60%, 70% or higher percent. 

I hope that how I constructed my portfolio will assist anybody who is wondering about portfolio organization. My portfolio is extremely low cost, only .07% fee! I paid approximately $1102.00 last year! 

Happy New Year everybody,

Steve

End of Year 2017 RETURNS.JPG

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Pie Chart of my Asset Allocation

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I'm not up to typing in as detailed an account of my investments as Steve did, but my (roughly) 70/30 equity/fixed portfolio (to which I am still contributing) appreciated by 15% in 2017.  

My investments are index funds, tilted toward small and value, with above-market weightings of REITs (which did relatively poorly this year) and Emerging Markets (which did very well).  I still have one individual stock holding--Berkshire Hathaway--which is about 8% of the portfolio; that did well, a bit better than the S&P 500.  As retirement approaches for me (still 3 - 5 years away, most likely), I've begun to add to fixed investments (mostly, for now, a stable value fund)—last year, the allocation was closer to 75/25.

PS: Steve suggests we include costs: I'm not sure of the overall total, but my Vanguard account (roughly 3/4 of the total portfolio) averages .10% ER, according to Vanguard.  The Berkshire stock has a zero ER, the stable value has unknown costs baked in (+ a .25% admin fee). 

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I won't present as elegantly as you Steve . You make us all look like amateurs with your great graphic presentation which I 'm too lazy  to try and replicate.

Our 2017 return was  13.4%  Our cost averages 0.08%  according to Morningstar  . We are  invested in all Vanguard index funds :Total Stock, Total International, Total Bond, and significant stake in Vanguard Small  Cap Index. I also have some cash in prime Money market. My allocation last time I checked was 55 Stocks 40 Bonds 5 % cash or there about. With the run up in stocks that may have changed. We have money in Traditional IRAs, Roth IRAs, and taxable accounts .  Can't complain. 

Besides a significant retirement account, we also are receiving full pensions. I am not taking social security at the moment and the plan is to wait to 70.  WE have no money worries .  I am glad I planned in my youth .Even though I made plenty of mistakes early on, I consistently saved and I gained some wisdom as I got older through reading. That ultimately lead me to Vanguard index funds. I am glad we have no money tied up in 403bs!!

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