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Author: yttire Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 418  
Subject: Winner! Date: 10/22/2006 1:03 PM
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Recommendations: 3
I had dreamed of perhaps 50 or 100 ports to examine. Imagine the difficulty in analyzing them, looking them over! So before any final verdict, lets look at the main contenders. I had hoped to go back and resurrect some of the other ports for comparison purposes, but sadly my initiative has been not high enough to accomplish such a feat. Here is a high level overview


Dusty's port- stock trading, some mutual funds and CD's $60,4521
Asset Mix - Mixed asset classes - up $69,778
The Lily Pad Port - High dividend stocks- down $12,000 cash production $31,780
Not Really Joking, dividends, covered calls, up $44,804
Vanguard Port 1- Treasury, wellesley, health care - up $22,864 (not including dividends)
XOM portfolio - Single stock- up $60,000

Overall- it was very interesting to see the different ports performing over time. Dusty's port reduced risk by using some short term instruments combined with active trading to generate income along with some ballast in the form of VFINX, VEXPX, and VPMCX. . (with yields of less than 8-12% each). The Asset Mix performed exceptionally strongly considering its bond holdings- but also was fairly volatile. The Lily Pad Port produced a steady stream of cash, at the expense of stock valuation. Not really joking created dividends and extra cash with covered calls while still generating capital gains. Vanugard port 1 was saved with its health care component, the mutual funds losing a bit of value, and XOM (Exxon Mobile) an energy play made a decent return.

Within the confines of the experimental choices, I would pick Dusty's port:

DUSTY's PORT is the 2005 RETIREMENT INVESTMENT CHALLENGE WINNER

It generated a good return with reduced risk of short term instruments (in case of absolutely demanded cash) and yet he played the marked adeptly and got an astounding return with a large chunk of ballast in the port. If he were my investment advisor, I would be very pleased with both the reduction in risk and the amount of return.

Here are some more comments on each strategy:
Dusty's port
http://boards.fool.com/Message.asp?mid=24436028

This port required relatively little tender love and care - but some to track the stocks. This port is highly dependent on the investment advisor (Dusty) to pick good stocks, but has performed exceptionally well.

Asset Mix
http://boards.fool.com/Message.asp?mid=24294298

This was my own port. Without a strong investment advisor for stocks, I would choose this port. Why does this port come in below dusties? Because his ballast was stronger than this one with the short term instruments, even though its yield was higher than Dusty's it was as "good a performer" in some senses (it dipped below the initial investment a number of times, which would be a bit unnerving to some). However, as a young couple, I would be pleased with this port, and I am going to be shifting my real port towards a strategy similar to this one.

The Lily Pad Port
http://boards.fool.com/Message.asp?mid=24293462

I am very grateful for the existence of this port- it represents a real possible strategy to generate a higher yield off an investment portfolio. My main contention with this is the concentration in specific industries, which seems like TOO high of a risk for someone actually hoping to retire. If some sort of legislation came through that hammered this group of stocks (specific to renting properties for example) this portfolio could be hammered and completely derail the retirement. However, a group like this would be invaluable as a portion of a real portfolio.

Not Really Joking
http://boards.fool.com/Message.asp?mid=24299752

The use of a low risk option strategy (covered calls) to generate income is genius for this port, and it performed exceptionally. The dividend stream was powerful and valuable to our imaginary couple. The dividend growth strategy is awesome. I think this dividend growth strategy is a strong one.

Vanguard Port
http://boards.fool.com/Message.asp?mid=24308547

I really liked the idea of overweighting health care as a sector for long term growth in today's environment of aging boomers. However, I look at this as so long a strategy that within a span of a year or two I would be uncomfortable with this large percentage. The conservative funds were a great addition, but they turned out to perform poorly due to the market conditions for this group. Thus, I think this was a strong port, but could have been stronger with more asset classes added in ;)

XOM portfolio
http://boards.fool.com/Message.asp?mid=24003861

This is more of a "roll the dice and hope for the best" unless of course you have unwavering confidence in the company. In the era of corporate scandals and misreporting, this would be too high of a risk for my tolerance for a whole port. Those of you who engage in such behaviors with your own money- best of luck to you!




Dusty, as your prize you can either accept cash, books, or charity. If you choose books, I will send you my two favorite investing books at this moment (shipped from amazon). Please send me an email with your choice (and your address, or the address of your charity). The two books will be:

How to Retire Early and Live Well With Less Than a Million Dollars
Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence

I will lean towards the books, because they have both influenced my thinking on money profoundly!!

I really appreciate the effort that everyone put in to keep up their portfolios, and found the mixture of strategies very illuminating.
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