UnThreaded | Threaded | Whole Thread (124) | Ignore Thread Prev | Next
Author: Rayvt Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75838  
Subject: Re: Talk me out of a Financial Advisor Date: 6/2/2013 3:45 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 4
His 10 year return for a portfolio size I'm looking at was 9.79% ending in March with a lower dip in 2009. Again, after fees. By my calculations, that's over a percent better than the S&P with dividends.
As it so happens, I have some data and a handy analysis program. Without looking ahead of time, here's what it says about some various investment vehicles for Mar-1-2003 to Mar-31-2013. (Running these as I type, so I'm not peeking ahead of time.)

"rate" is CAGR.

SPX (S&P 500 index w/o dividends)
B&H: $1.0000 grows to $ 1.8931 in 10.07 years. rate: 6.54% stdev: 20.6%

SPY (w/div)
B&H: $1.0000 grows to $ 2.3000 in 10.07 years. rate: 8.62% stdev: 20.6%

SPY (w/o div)
B&H: $1.0000 grows to $ 1.8803 in 10.07 years. rate: 6.47% stdev: 20.5%


So that there's your S&P. Up a total of 8.9% w/o dividends or 13.0% w/dividends. If he's up total of 9.8%, he's indeed doing about 1% better than the S&P -- without dividends. But not WITH dividends.
Total return of 9.8% is a CAGR ("rate") of 7.1%

Some more (all include reinvested dividends):

VIVAX (Vanguard Value ETF (VTV))
B&H: $1.0000 grows to $ 2.4256 in 10.07 years. rate: 9.20% stdev: 21.9%

VIGRX (Vanguard Growth ETF (VUG))
B&H: $1.0000 grows to $ 2.3106 in 10.07 years. rate: 8.67% stdev: 20.1%

IJS - iShares S&P SmallCap 600 Value Index
B&H: $1.0000 grows to $ 3.0617 in 10.07 years. rate: 11.75% stdev: 26.4%

FCNTX - Fidelity Contrafund
B&H: $1.0000 grows to $ 3.0617 in 10.07 years. rate: 11.75% stdev: 26.4%

VTI - Vanguard Total Stock Market ETF
B&H: $1.0000 grows to $ 2.3906 in 10.07 years. rate: 9.04% stdev: 20.6%


Back to some detailed statistics on SPY:

SPY B&H:
CAGR: 8.62% stdev: 20.6% MxDD: -51% Sortino: 0.32 UI: 12.4 UPI: 0.7

SPY with 10-month Simple Moving Average timing:
CAGR: 8.98% stdev: 12.5% MxDD: -23% Sortino: 0.34 UI: 7.0 UPI: 1.3

See that? About the same return (CAGR) but half the risk (stdev and MaxDrawDown)

Summary:
He beat the S&P500 without dividends.
He didn't beat S&P500 including dividends. He didn't beat a whole lot of other ETFs, either.
In terms of volatility and dips, you can cut those in half with a simple mechanical timing rule.
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (124) | Ignore Thread Prev | Next

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Managing Your Wealth
Our own TMFHockeypop from Rule Your Retirement fame on the TV show Managing Your Wealth.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Macro Economics

Should You Be an Index Investor?
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement