Portfolio Performance: Week of July 29

Portfolio Performance Data Table

Below is the portfolio performance data table for this past week.  While every portfolio lost ground on an absolute scale, nearly all gained on the two benchmarks.  Losses were expected in light of the market action this week.  Of the eight portfolio available to Platinum members, only the Einstein did not gain ground on the ITA Index benchmark.  That percentage difference remained the same.  All eleven portfolios gained on the VTSMX benchmark.  Almost all portfolios saw an increase in the Sortino ratio, while a few lost fractions to the Retirement ratio.  

Overall, the portfolios held up quite will in light of a miserable week due to the debt limit stalemate, something completely unnecessary.  We expect to see significant volatility next week.

Portfolio Performance - 07/29/2011

Portfolio Last Update Launch Date Tracking Tool Port. IRR ITA Index Diff Port. vs. ITA Index VTSMX IRR Diff. Port. vs. VTSMX Index IR SR RR
AA-Mosaic 06/30/2011 07/21/1999 Captool 2.86% NA NA 1.61% 1.25% 0.05 NA NA
Curie 07/29/2011 12/26/2007 TLH SS 5.3% 1.8% 3.5% 1.2% 4.2% NA 13.0 -0.7
Mosaic2 06/30/2011 07/19/1999 Captool 5.05% NA NA 1.43% 3.62% 0.16 NA NA
Newton 07/29/2011 06/02/2008 TLH SS 9.1% 7.0% 2.1% 6.8% 2.3% NA 1.6 1.1
Passive Port. 06/30/2011 12/01/2000 Captool 5.35% NA NA 3.1% 2.25% 0.70 NA NA
Schrodinger 07/29/2011 12/01/2000 TLH SS 5.2% 4.6% 0.6% 3.0% 2.2% NA 17.2 5.0
Jane 06/30/2011 02/14/1997 Captool 9.23% NA NA 4.91% 4.32% 0.54 NA NA
Einstein 7/29//2011 06/30/2008 TLH SS 13.6% 11.3% 2.3% 9.9% 3.7% NA 5.1 5.1
Gauss 06/30/2011 02/19/1997 Captool 9.4% NA NA 4.88% 4.52% 0.23 NA NA
Kepler 07/29/2011 11/01/2008 TLH SS 18.1% 18.2% -0.1% 17.4% 0.7% NA 0.4 0.4
Scrappy 06/30/2011 08/14/2008 Captool 12.88% NA NA 6.0% 6.88% NA NA NA
Bohr 07/29/2011 08/14/2008 TLH SS 12.0% 11.9% 0.1% 5.1% 6.9% NA 9.4 6.1
Kenilworth 07/29/2011 08/18/2010 TLH SS 10.7% 13.4% -2.7% 13.8% -3.1% NA -0.02 -0.02
Franklin 07/29/2011 05/6/2011 TLH SS -5.9% -7.4% 1.5% -13.2% 7.3% NA -0.04* -0.07*
Projects 06/30/2011 12/01/2000 Captool 5.67% NA NA 2.02% 3.65% 1.33 NA NA
Washington 06/30/2011 06/18/1999 Captool 3.28% NA NA 1.72% 1.56% 0.28 NA NA
Maxwell 07/29/2011 12/25/2000 TLH SS 1.1% 8.7% -7.6% 4.3% -3.2% NA -0.11 -0.19
Adams 06/30/2011 06/18/1999 Captool 3.64% NA NA 4.2% -0.56% 0.72 NA NA
Euclid 07/29/2011 06/30/1999 TLH SS 1.9% 10.1% -8.2% 4.4% -2.4% NA -0.11 -0.16
Jefferson 06/30/2011 06/13/2006 Captool 6.05% NA NA -0.82% 6.87% NA NA NA
Madison 07/29/2011 03/13/2008 TLH SS 5.9% 8.4% -2.5% 8.3% -2.4% NA -0.1 -0.1

The above table of information is unique to the blogging world.  I know of no other blog site that provides this kind of detailed information as that provided to Platinum members.  If anyone know where to find this information, please post the URL so we can all examine the results.

“Creme List” for 29 July 2011

Photograph:  Santiago, Spain (Represents current feelings in America)

This week the "Creme List" is a shorter group of stocks with only 18 companies surviving the weak market.  AGL, CL, TOT, and WFC were wiped from the list as none of these companies cracked the elite list for the last 13 weeks.

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TLH Spreadsheet Help With EFT Purchase

Do you need help entering a new ETF purchase into the TLH Spreadsheet?  A new video/audio clip is available to walk TLH users through the process.  There is also an explanation of how to enter a cash dividend into the spreadsheet. 

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Bohr Portfolio Review: 27 July 2011

Few changes occurred in the Bohr Portfolio since the last review.  The asset allocation remains the same, and as readers can see in the first screen shot, most of the asset classes are in balance.  Excluding cash, only Small-Cap Growth and Bonds/Income are out of balance.  Limit orders are in place to correct these imbalances, but as I wrote last weekend, I lowered the "Buy" limit orders significantly in anticipation of a major market drop.  That has yet to happen.  Those limit orders have not been struck and the market has yet to sink to low levels.  It could happen, but it has not at this point. 

Watching the market behavior so far indicates there will be some sort of debt limit settlement before the August 2nd deadline.  The debt limit has been raised something like 170 times since the 1950s, but for the last 60 years we never had such a high number of "crazies" in the House of Congress.

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Three Asset Class Portfolio

Suppose someone told you to build a portfolio, but the upper limit of investments was three.  You could pick three stocks, three mutual funds, three ETFs, or any combination of three investments.  What three investment vehicles would you select, and why would you pick these three?

None of us wants to be limited to only three investments, but that is the challenge of this assignment.  Allan S. Roth wrote an interesting book, "How a Second Grader Beats Wall Street" which is a description of how one can put together a successful portfolio using only three investments.  Roth helped his son put together a simple three index fund portfolio.  In the 'Second Grader' portfolio, the three investments are: 

  • Vanguard Total Stock Market Index Fund (VTSMX).  We use this fund as one of our benchmarks.
  • Vanguard Total International Stock Index Fund (VGTSX).  This is another fund we use as our international benchmark in the ITA Index.
  • Vanguard Total Bond Market Index Fund (VBMFX). 

This portfolio is set up to "Own The World."  If limited to three investment vehicles, one of the goals is to "own" as much of the world as possible.  The above three index funds do an excellent job.

Since my preference is to hold ETFs instead of index funds, I will alter the above three selections.  Here are my three investment choices.

  • Vanguard Total Stock Market ETF (VTI)  This ETF covers the total U.S. equities market.
  • Vanguard FTSE All-World ex-US ETF (VEU).  VEU covers the entire world minus the United States equities market.  With these two ETFs we have covered the world market.
  • iShares Barclays TIPS Bond (TIP).  This is an inflation protection bond ETF.  Instead of selecting a bond ETF such as BIV or BND, I choose to go with TIP, particularly at a time when inflation is on the rise and likely to increase.

Portfolio construction need not be complicated.  An investor who puts 33% in each of the above ETFs has a high probability of outperforming the majority of active mutual fund managers in a given year, and the probability only increases the longer such a portfolio is held.  If you are unsure what to do, keep it simple and go with these three ETFs.

Monthly Portfolio Review For Einstein Portfolio: 25 July 2011

Reviewing portfolios such as the Einstein can be considered a tedious task, or one might accept it as a challenge to see if one can improve the asset allocation plan.  A change is coming to this portfolio.  Platinum readers will note the change in the Dashboard worksheet as I am preparing to add international bonds to the Einstein.  Where will the percentage come from to populate this new asset class?  Reduction will come from the Blend asset classes.  Selling off Small-Cap Blend is the first move.  This change is not a Tactical Asset Allocation move.  Rather, it falls into the category of a Strategic Asset Allocation shift.

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Sarah Brightman: Two Music Recommendations

After failing to post some music recommendations for a few weeks, I am making two recommendations today.  Both are Sarah Brightman recordings.  Brightman is one of the stellar female voices of our generation.

The two recordings are:

"Love Changes Everything: The Andrew Lloyd Webber Collection"

"Diva: The Singles Collection"

Each of these CDs include memorable recordings such as, 'Tu Quieres Volver,' 'Music of the Night,' 'Just Show Me How To Love You,' and 'Love Changes Everything.'

Portfolio Performance Data: 22 July 2011

How did your portfolio perform this last week?  Did you gain in absolute terms but lose the relative race?  Well, that is what happened to most of the portfolios tracked using the TLH Spreadsheet.  We lost most of the ground gained last week when examining the VTSMX and ITA Index benchmarks.  Nearly all the portfolios showed a decline in both the Sortinio and Retirement ratios.

It is a useful exercise to look over the various portfolios and see if you can pick out the one that is performing best.  Which of the two difference columns would you select?  Is it the difference between the portfolio IRR and the ITA Index (column 7) or column 9?  Or do you pay more attention to one of the two ratios, SR or RR?

Why is the SR so high for the Schrodinger?  Consider the time (over ten years) this portfolio has been operating.  While the Kepler has the highest IRR, the SR and RR are nearly zero.  Note that this portfolio is not outperforming the VTSMX benchmark by much and that is the reason the two uncertainty ratios are so low.  There is a lot to interpret inside this data table.

While we prefer to pick up additional percentage points when measured against the benchmarks, this week only demonstrates how difficult it is to outperform the broad market when it has a good week.

Portfolio Performance - 07/22/2011

Portfolio Last Update Launch Date Tracking Tool Port. IRR ITA Index Diff Port. vs. ITA Index VTSMX IRR Diff. Port. vs. VTSMX Index IR SR RR
AA-Mosaic 06/30/2011 07/21/1999 Captool 2.86% NA NA 1.61% 1.25% 0.05 NA NA
Curie 07/22/2011 12/26/2007 TLH SS 6.1% 2.7% 3.4% 2.4% 3.7% NA 11.5 1.9
Mosaic2 06/30/2011 07/19/1999 Captool 5.05% NA NA 1.43% 3.62% 0.16 NA NA
Newton 07/22/2011 06/02/2008 TLH SS 9.8% 8.0% 1.8% 8.7% 1.4% NA 0.8 0.8
Passive Port. 06/30/2011 12/01/2000 Captool 5.35% NA NA 3.1% 2.25% 0.70 NA NA
Schrodinger 07/22/2011 12/01/2000 TLH SS 5.5% 5.1% 0.4% 3.5% 2.0% NA 15.8 7.3
Jane 06/30/2011 02/14/1997 Captool 9.23% NA NA 4.91% 4.32% 0.54 NA NA
Einstein 7/22//2011 06/30/2008 TLH SS 14.9% 12.6% 2.3% 11.6% 3.3% NA 5.1 5.1
Gauss 06/30/2011 02/19/1997 Captool 9.4% NA NA 4.88% 4.52% 0.23 NA NA
Kepler 07/22/2011 11/01/2008 TLH SS 19.5% 19.9% -0.4% 19.4% 0.1% NA 0.04 0.04
Scrappy 06/30/2011 08/14/2008 Captool 12.88% NA NA 6.0% 6.88% NA NA NA
Bohr 07/22/2011 08/14/2008 TLH SS 13.2% 13.1% 0.1% 6.8% 6.4% NA 8.7 7.7
Kenilworth 07/22/2011 08/18/2010 TLH SS 17.0% 20.3% -3.3% 23.0% -6.0% NA -0.04 -0.04
Franklin 07/22/2011 05/6/2011 TLH SS -2.0% 4.4% -2.4% 4.3% -2.3% NA -0.01* -0.03*
Projects 06/30/2011 12/01/2000 Captool 5.67% NA NA 2.02% 3.65% 1.33 NA NA
Washington 06/30/2011 06/18/1999 Captool 3.28% NA NA 1.72% 1.56% 0.28 NA NA
Maxwell 07/22/2011 12/25/2000 TLH SS 1.3% 9.8% -8.5% 4.9% -3.7% NA -0.13 -0.19
Adams 06/30/2011 06/18/1999 Captool 3.64% NA NA 4.2% -0.56% 0.72 NA NA
Euclid 07/22/2011 06/30/1999 TLH SS 2.1% 10.2% -8.1% 5.1% -2.9% NA -0.13 -0.15
Jefferson 06/30/2011 06/13/2006 Captool 6.05% NA NA -0.82% 6.87% NA NA NA
Madison 07/22/2011 03/13/2008 TLH SS 6.1% 11.1% -5.0% 10.4% -4.3% NA -0.17 -0.17

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“Creme List” for 22 July 2011

Photograph: Demolishing a house down the street

Twenty-one stocks made the elite list this week.  COH, CSCO, and HPQ were dropped as they did not score over the past thirteen weeks.  One new company moved on to the "Creme List" at number 13, quite a jump.  Only one stock is priced to buy and that stock is identified with the * symbol to the right of the ranking number.

Platinum membership is available for $5.00 per month.  See the "Creme List" with a membership.

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TLH Spreadsheet Overview

Special notice for Platinum users: An updated overview of the TLH Spreadsheet is now available.  It takes about 13 minutes. 

Platinum membership is available for $5.00 per month.

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