Hello Yellowtail,

Your question, in various forms, has been asked many times lately, but it really is a question that should never be asked. The main reason is all portfolios are exclusively dependent on what they contain, so the question really becomes meaningless.  Who is down what depends on what they hold. Same goes for good returns. Comparing portfolios is never a good idea because it turns into mine-is-better-than-your's contest. All you want to be concerned about is if you have the right portfolio for you.

You are down 10% and don't find that too comfortable, so you may just want to cut back on risk exposure some. You are doing better than the total market, which is down 13% ytd. Vanguard's Global fund, which is 60% foreign, is down 22%. Vanguard balanced fund is down 5.5%.

But I do agree that struggling to get your assets up to 150k and losing 15k is not near as much fun as gaining 15k. If you have a long time-horizon and you have a diversified portfolio containing a reasonable dose of bonds, then you are very close to being where you should be.

 

Paul 

 

 

 

 

 

yellowsky:

I am curious and would like to know what % the Diehards are down in their portfolios since 12/31/07.   I just calulated mine and my portfolio is down 10%.    That is a major loss for ones in the less than 150K cateory.

We are up 12.5%. Earlier in the year we were up 16.6%. This does not matter to me. We continue to invest weekly, according to the AA set up early in 2007. I've simplified a bit, and we added in a Roth for my wife recently. What I've learned is to set an allocation I can live with. Then push as much money into it as possible, currently that is about 1/2 of our net pay.

For me, my total is up 12.5% YTD, and I believe I am positioned well for the next takeoff.

If you sell now, you will lock in your loss.

Though Taylor is certainly correct when he says that all bear markets end eventually, the near certainty that this one will as well does not take any of the sting out of the fact that the s&p is still in negative territory for this decade, even with all it's dividends reinvested. A more than eight and one-half year bear (that shows no sign of abating anytime soon) is a very sobering fact for those of us in retirement. I now fear that the credit crisis and housing debacle will prolong this one a good deal longer.

Mr. Ed:

yellowsky:

I am curious and would like to know what % the Diehards are down in their portfolios since 12/31/07.   I just calulated mine and my portfolio is down 10%.    That is a major loss for ones in the less than 150K cateory.

For me, my total is up 12.5% YTD.

Unless you've been selling stock short, I simply don't believe you.

One cautionary tale to remember:

The market peak of 1929 was not reached again until 1954, without even adjusting for inflation.

In other words, it took 25 years to get your capital back!

Christopher:

Mr. Ed:

yellowsky:

I am curious and would like to know what % the Diehards are down in their portfolios since 12/31/07.   I just calulated mine and my portfolio is down 10%.    That is a major loss for ones in the less than 150K cateory.

For me, my total is up 12.5% YTD.

Unless you've been selling stock short, I simply don't believe you.

Ever hear of these things called commodities? People who were heavily invested in them did quite well this year especially if they got out in July. Didn't have to sell any stocks short.

leelee:

Ever hear of these things called commodities? People who were heavily invested in them did quite well this year especially if they got out in July. Didn't have to sell any stocks short.

Well, let's ask Yellowsky: Have you invested in commodities this YTD?

look i'm new and useing the pc from thailand can you tell me on the portfilo they do not list the cost basies down how do you keep tract of your winings or losses , thank you hope this is ok till i find my way around..

Christopher:

Mr. Ed:

yellowsky:

I am curious and would like to know what % the Diehards are down in their portfolios since 12/31/07.   I just calulated mine and my portfolio is down 10%.    That is a major loss for ones in the less than 150K cateory.

For me, my total is up 12.5% YTD.

Unless you've been selling stock short, I simply don't believe you.

Our total, including 2008 contributions, is up 12.5% YTD. Maybe that was not so clear. The point is that you can overcome the Bear with more contributions.

BTW, we are in the accumulation phase, and I recognize that the Bear means different things to different investors. It's really hard on some fixed income folks.

Hi Chris,

1929 – 1953, the S&P 500 managed a 5.89% CAGR,  5 yr. T-bonds 3.02%, and a 60/40, 5.47%. Inflation was 1.82%. An individual drawing a reasonable 4% Safe Withdrawal Rate would have been fine, as long as they didn’t panic and sell, or jump out a window. ;0),

2000 – 2007, this higher risk 60/40 portfolio returned 4.26% CAGR, Taylor’s simple 4Fund portfolio 6.22%, and the Coffeehouse 7.23%.

To put this in perspective, the real return of the 2000 – 2007 was 2.78%. The real return for the S&P 500 1972 – 1981 was negative, - 4.46%. The return for the long term government bond for this period was also negative, -5.82%.  Where to run? – huh? The real return for 1929 - 1948 was actually 1.67%.

This is what makes asset allocation important, but even asset allocation is not perfect. For instance, the Coffeehouse would have done well lately, and 1972 – 1981, 7.64% real, but not without volatility. 1973 – 1974, the Coffeehouse lost 40% real for the total 2 years.

If you're interested, William Bernstein offers one of the best easy-to-read books that cover pretty much everything Asset Allocation in “The Four Pillars of Investing.”  Larry Swedroe takes this a bit further, and Rick Ferri with a more conservative Total Market (Efficient markets) approach. You can talk to them both over at the Bogleheads.

Thing is, don’t panic during downturns. It’s just a part of investing. As Taylor said, setting your asset allocation up for your personal risk tolerance is probably most important.

Using total markets, a 60/40 portfolio would have offered 10.17% return 1972 – 2007, with an 11.22% standard deviation. A 40/60, 9.55% return with an 8.54% SD. Just looking at this, I would say all but the Lionhearted or speculator would be better in a 40/60 portfolio in retirement.

Chin

 

That's one of the problems of relying upon cap apprec.  In years gone by people used the S&P 500 and bonds.  Then adding other assets classes became popular:  int'l, small caps, REIT's, now commodities.  What's next?  People are always looking for something to be "up" (to draw from in retirement) when other asset classes are down.

Dividend investing does not rely on such a premise.

Greg