So I spent all day yesterday making a portfolio of all index funds that would serve as a better benchmark of my own performance. Basically since I started investing the S&P500 has performed -35.16%, the DJI -31.63% and my portfolio has returned 3.04%. So it looks like I'm beating the market by 40%, and by classical evaluation that's true, however I actively manage my investments so I was wondering if I could beat myself with "safer" investments. The answer is that I can, but not by much. In a nod to a friend I also made a portfolio of Bond investments, since the assertion that they return more than stocks is theater best published in a down market.
Benchmark Fund: 1.55% return since 2007
Weight heavily for the emerging markets, with less than 10% in DIPSX, and any distribution you'd like in the indexes (mine are roughly equal) but I'd suggest less than 30% in the US funds and at least 50% in the emerging markets.
SPY, FXI, VWO, VFINX, DIPSX, IYY
in the future I'll add iShares South Africa to the benchmark, and there will be likely be no more purchases of American indexes.
Bond portfolio - Safe to the point of stupidity: 0.43% return since 2007
You shouldn't use this as a guide, but it might be a decent hedge if you find yourself with a few million you can't stand to lose.
BIV, TIP, BLV, BSV, TLT, DIPSX
My portfolio - I don't own all these stocks anymore, but I have owned all of them at one point (and I still own most) : 3.04% return since 2007
(AAPL), BAC, CCH, CFSG, (CGW), GOOG, HOOK, KO, (SAM), T, USB, (VFINX), VWO.
It's also worth noting that my biggest mistake ever was investing in indexes, my stocks dipped a max of 20% while VFINX (an index of the 500) dipped more than 40%. So I'll never invest in domestic indexes again. For your personal reference, had I never bought VFINX my portfolio would've returned a 24.72% gain (beating the S&P500 by 59.88 points).
Also, other than T and possibly KO it's not advisable to buy what I already own.... though I do have re-up price points . . . especially USB & BAC, I bought them for pennies their assests on negative sentiment, which is rapidly vanishing (returning 15% and 34% since April).
While I won't say that investing in indexes still isn't amoung my greatest mistakes, I've made others. So because of that, as of market close today, my bench mark index portfolio has provided almost identical returns to my actual portfolio-
Index: 9.50%
Actual: 10.1%
Bonds: 0.2%
Showing that even if you spend a bunch of time on stocks if you choose the right indexes and just buy and hold you can at least occasionally do just as well.
The losers in my actual portfolio were:
Fuqi International, Inc. FUQI,-13.75%
iShares FTSE/Xinhua... FXI, -2.06%
Under Armour, Inc. . . . UA -1.51%
Really this is due to my failure to realize that Fuqi was bound for the floor and that (approx) $1000 loss set me back a bit.
I've added some jpegs of my index & "play money" portfolios so you can see my percent holdings and performance to date based on that. The amount of the portfolio is it's current market value NOT it's value when I acquired it.
Benchmark Fund: 1.55% return since 2007
Weight heavily for the emerging markets, with less than 10% in DIPSX, and any distribution you'd like in the indexes (mine are roughly equal) but I'd suggest less than 30% in the US funds and at least 50% in the emerging markets.
SPY, FXI, VWO, VFINX, DIPSX, IYY
in the future I'll add iShares South Africa to the benchmark, and there will be likely be no more purchases of American indexes.
Bond portfolio - Safe to the point of stupidity: 0.43% return since 2007
You shouldn't use this as a guide, but it might be a decent hedge if you find yourself with a few million you can't stand to lose.
BIV, TIP, BLV, BSV, TLT, DIPSX
My portfolio - I don't own all these stocks anymore, but I have owned all of them at one point (and I still own most) : 3.04% return since 2007
(AAPL), BAC, CCH, CFSG, (CGW), GOOG, HOOK, KO, (SAM), T, USB, (VFINX), VWO.
It's also worth noting that my biggest mistake ever was investing in indexes, my stocks dipped a max of 20% while VFINX (an index of the 500) dipped more than 40%. So I'll never invest in domestic indexes again. For your personal reference, had I never bought VFINX my portfolio would've returned a 24.72% gain (beating the S&P500 by 59.88 points).
Also, other than T and possibly KO it's not advisable to buy what I already own.... though I do have re-up price points . . . especially USB & BAC, I bought them for pennies their assests on negative sentiment, which is rapidly vanishing (returning 15% and 34% since April).
While I won't say that investing in indexes still isn't amoung my greatest mistakes, I've made others. So because of that, as of market close today, my bench mark index portfolio has provided almost identical returns to my actual portfolio-
Index: 9.50%
Actual: 10.1%
Bonds: 0.2%
Showing that even if you spend a bunch of time on stocks if you choose the right indexes and just buy and hold you can at least occasionally do just as well.
The losers in my actual portfolio were:
Fuqi International, Inc. FUQI,-13.75%
iShares FTSE/Xinhua... FXI, -2.06%
Under Armour, Inc. . . . UA -1.51%
Really this is due to my failure to realize that Fuqi was bound for the floor and that (approx) $1000 loss set me back a bit.
I've added some jpegs of my index & "play money" portfolios so you can see my percent holdings and performance to date based on that. The amount of the portfolio is it's current market value NOT it's value when I acquired it.
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